Photo by Bernard Hermant on Unsplash

Worried your employees are slacking off? Browsing social media instead of calling clients? Leaving early on Friday afternoons? Not to worry – spying on employees is now cheaper and more prevalent than ever, as surveillance technology becomes increasingly sophisticated.  Employers can track which websites an employee visits and keep tabs on an employee’s keystrokes, personal blogs and social media. More extreme surveillance methods include tracking workers via GPS (thank you stalker apps) and assessing an employee’s emotional state by monitoring facial expressions and tone of voice. 

Employers advocate these techniques, claiming they prevent people from shirking on the job, which increases productivity. If they know they’ll be caught on camera, employees who handle cash are less likely to steal from the register. But a study of TSA and similar workplaces confirms that employees don’t like being watched. “Most TSA workers we observed do everything possible to stay under the radar, to essentially disappear…They try to never speak up, never stick out, do nothing that might get noticed by management. This leads to a vicious cycle, whereby management grows more suspicious and feels justified in ratcheting up the surveillance.”


While companies have an ever increasing number of options for how to spy on employees, the desire to do so isn’t so new. According to economists Armen Alchian and Harold Demsetz, companies are constantly trying to determine how to monitor employees, as noted in their 1972 paper, “Production, Information Costs, and Economic Organization.” In this paper, Alchian and Demsetz argue that when people work together as a team, they are often able to get more work done than they would if each person worked alone and their work were aggregated. However, because each person now receives credit for a portion of the team’s output whether they put in any effort or not, each worker has an incentive to slack off. According to this theory, the size of the company will be determined by just how expensive it is to keep an eye on their employees. 


If surveillance is cheap, then companies are more likely to increase the amount of spying they do on their employees. Whether or not this decision helps the company’s bottom line depends on how this choice impacts worker morale. In the restaurant case, installing additional surveillance cameras was correlated with reduced theft and increased server tips. As thieving became more costly, good customer service became relatively cheaper for waitstaff looking to bring home dough. Thus the company benefited from theft prevention and the ability to offer better quality service.

But in some cases, additional surveillance worsened worker morale. TSA staff felt the additional surveillance indicated a lack of trust they took as a reason to justify wasting even more time getting around the surveillance technology in place of avoiding work. While napping on the job became costly, the deteriorating work environment simultaneously reduced the non-monetary benefits of working the job.

Nearly all firms have some way to keep their employees working. In fact, Alchian and Demsetz point out in their paper that this is why managers exist! And just like with surveillance technology, it’s hard for managers to find that fine balance between adequately managing and supporting employees and micromanaging employees. I’m sure we can all think of bosses we’ve had who took their surveillance role to seriously annoying levels. How much surveillance do you think companies should employ? Let us know in the comments below!

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