The Internet has become an extremely valuable business tool, but it’s also a huge distraction for workers on the job. Employees are wasting valuable company time by surfing inappropriate websites (Facebook, shopping, sports, etc.), sending and receiving personal email, talking to friends via online chat, and downloading videos and music. According to IT research firm Gartner Inc., non-work-related Internet surfing results in an estimated 40 percent productivity loss each year for American businesses. A recent Gallup Poll found that the average employee spends over 75 minutes per day using office computers for non-business-related activity. That translates into an annual loss of $6,250 per year, per employee. An average mid-size company of 500 employees could be expected to lose $3.25 million in lost productivity due to Internet misuse.

Many companies have begun monitoring employee use of email and the Internet, sometimes without employees’ knowledge. Many tools are now available for this purpose, including SONAR, Spector CNE Investigator, iSafe, OsMonitor, IMonitor, Work Examiner, Activity Monitor, Mobistealth, and Spytech. These products enable companies to record online searches, monitor file downloads and uploads, record keystrokes, keep tabs on emails, create transcripts of chats, or take certain screen shots of images displayed on computer screens. Instant messaging, text messaging, and social media monitoring are also increasing. Although U.S. companies have the legal right to monitor employee Internet and email activity while employees are at work, is such monitoring unethical, or is it simply good business?Managers worry about the loss of time and employee productivity when employees are focusing on personal rather than company business. Too much time on personal business translates into lost revenue. Some employees may even be billing time they spend pursuing personal interests online to clients, thus overcharging them.
If personal traffic on company networks is too high, it can also clog the company’s network so that legitimate business work cannot be performed. Procter & Gamble (P&G) found that on an average day, employees were listening to 4,000 hours of music on Pandora and viewing 50,000 five-minute YouTube videos. These activities involved streaming huge quantities of data, which slowed down P&G’s Internet connection.

When employees use email or the web (including social networks) at employer facilities or with employer equipment, anything they do, including anything illegal, carries the company’s name. Therefore, the employer can be traced and held liable. Management in many firms fear that racist, sexually explicit, or other potentially offensive material accessed or traded by their employees could result in adverse publicity and even lawsuits for the firm. An estimated 27 percent of Fortune 500 organizations have had to defend themselves against claims of sexual harassment stemming from inappropriate email. Even if the company is not found liable, responding to lawsuits could run up huge legal bills. Companies also fear leakage of confidential information and trade secrets through email or social networks. Another survey conducted by the American Management Association and the ePolicy Institute found that 14 percent of the employees polled admitted they had sent confidential or potentially embarrassing company emails to outsiders.

U.S. companies have the legal right to monitor what employees are doing with company equipment during business hours. The question is whether electronic surveillance is an appropriate tool for maintaining an efficient and positive workplace. Some companies try to ban all personal activities on corporate networks—zero tolerance. Others block employee access to specific websites or social sites, closely monitor email messages, or limit personal time on the web.

For example, P&G blocks Netflix and has asked employees to limit their use of Pandora. It still allows some YouTube viewing, and is not blocking access to social networking sites because staff uses them for digital marketing campaigns. Ajax Boiler in Santa Ana, California, uses software from SpectorSoft Corporation that records all the websites employees visit, time spent at each site, and all emails sent. Financial services and investment firm Wedbush Securities monitors the daily emails, instant messaging, and social networking activity of its 1,000-plus employees. The firm’s email monitoring software flags certain types of messages and keywords within messages for further investigation.

A number of firms have fired employees who have stepped out of bounds. A Proofpoint survey found that one in five large U.S. companies had fired an employee for violating email policies. Among managers who fired employees for Internet misuse, the majority did so because the employees’ email contained sensitive, confidential, or embarrassing information.

No solution is problem-free, but many consultants believe companies should write corporate policies on employee email, social media, and web use. The policies should include explicit ground rules that state, by position or level, under what circumstances employees can use company facilities for email, blogging, or web surfing. The policies should also inform employees whether these activities are monitored and explain why.

IBM now has social computing guidelines that cover employee activity on sites such as Facebook and Twitter. The guidelines urge employees not to conceal their identities, to remember that they are personally responsible for what they publish, and to refrain from discussing controversial topics that are not related to their IBM role.

The rules should be tailored to specific business needs and organizational cultures. For example, investment firms will need to allow many of their employees access to other investment sites. A company dependent on widespread information sharing, innovation, and independence could very well find that monitoring creates more problems than it solves.

1.Should managers monitor employee email and Internet usage? Why or why not?

2.Describe an effective email and web use policy for a company.

3.Should managers inform employees that their web behavior is being monitored? Or should managers monitor secretly? Why or why not?