More and more, our data is being used in ways that we don’t completely understand.  From Facebook to our credit score, it’s unclear who knows what and what we can actually do about it.  Now, companies are starting to use data to monitor employees throughout the employee lifecycle.

Vyopta, an Austin-based tech startup providing workplace communications monitoring and analytics, recently announced that it raised 7.5 million in series B funding from Elsewhere Partners. While Vyopta describes itself as “the leading developer of monitoring and analytics tools to optimize workplace collaboration,” the services it provides sound eerily similar to those of something akin to an employee monitoring solution.

For example, Vyopta’s website claims to provide visibility across video and voiced-based collaboration platforms with a variety of features including intelligent video monitoring, voice monitoring, and data collection on instant messaging, screen share sessions, and usage by user and system totals. The website also boast’s the software’s ability to collect data from phones, smart whiteboards, and video endpoints with cameras and microphones as well calendar systems like Google Calendar and Microsoft Exchange. While the website never goes so far as to say it listens to or watches employees, its data collection potential and tracking capabilities are a bit creepy for potential employees.

Vyopta is not alone, however. In today’s digital age, there are a variety of employee monitoring software solutions which are becoming increasingly popular especially with companies who are looking to improve employee engagement and productivity. These technologies bring into question the ethics/legal implications of tracking employees and whether certain monitoring practices violate employees’ privacy. Employers need to be aware of where employee monitoring crosses the line and goes from becoming a business asset to becoming a potential danger and burden to employees.

Benefits of Employee Monitoring

So, why are companies willing to risk employee backlash and lawsuits?  Well, just like Facebook has driven tremendous value from their flexible moral regarding privacy, there are massive potential rewards for employers.

Employee monitoring makes it possible to detect how often workers are distracted by non-work-related activities. By uncovering these distractions and helping employees develop better habits, you can significantly increase worker productivity. Employee tracking data can also reveal how long employees spend on certain tasks. This can give you insight into what tasks employees are struggling with so you can then provide them with more guidance for those tasks.

This data also allows you to reprioritize tasks if you want an employee to focus more attention on a certain project, which of course can drastically increase your productivity. Employee monitoring software also ensures data security by detecting hackers or preventing unauthorized access to private company data and information.

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Where Employee Tracking Can Go Wrong

On the other hand, an employee monitoring solution has the potential to greatly harm your business as a whole if it is not implemented carefully. One particular hazard is that tracking your employees may imply a lack of trust in them. This cause feelings of resentment among employees and can lead to decreased motivation and retention. It may also cause unfavorable public opinion of your company which can make it more difficult to recruit top talent.

If your employees find out they were being monitored without their knowledge, or if they discover you were collecting their data with an ulterior and hidden motive, it can do irreparable damage to your brand and business. For companies that collect data on employees as individuals rather than as aggregated data points, there is also potential for catastrophe if your system suffers a data breach. If private data about individuals at your company is leaked or falls into the wrong hands, it could lead to enormous legal issues for your company.

Let’s be honest here, a lot of this is very reminiscent of what’s happening with China’s mass surveillance program.  While it may be great for a benevolent central authority to have all of this information, the dangers seem to outweigh the upside.

Best Practices

Employee monitoring can be an asset to your company, but it must be implemented very carefully. You should consider who will have access to the data and how they will be held accountable for keeping with fair practices. It is also important to keep in mind that you shouldn’t be collecting data to “catch” employees, but rather to work to change problematic patterns of behavior to make your business more efficient overall.

Employees will feel more comfortable with being tracked if you make it clear that the purpose of the program is to improve as a business, not to micro-manage individuals. The most important thing to keep in mind is to be transparent about what you are doing and try as hard as possible to keep data on an aggregate level. You should tell your employees exactly what information you will be collecting and outline the specific business goals you hope to achieve with the program.

Ultimately, while the goal of employee tracking technology is to enable businesses to make data-driven decisions to improve the efficiency of their office, businesses need to tread carefully to ensure they are not imposing on their employees’ privacy.

Phil Strazzulla

Phil Strazzulla is the founder of SelectSoftware, a site dedicated to helping HR professionals buy the right software and tools through free online guides.  Phil started his career working in venture capital at Bessemer before attending Harvard Business School for his MBA.  He originally got into the People space by starting NextWave Hire, a recruitment marketing software company.  Follow Phil on Twitter @PhilStrazzulla or connect with him on LinkedIn