Business spying on his colleagues through jalousie in office
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Six judges sent a frisson of fear through the workplaces of Europe last week when they said a company had been within its rights to snoop on an employee’s online chats with his fiancée.

As I wrote up the story on the day of the ruling, I was preoccupied with figuring out the legal implications of the case. After the fuss died down, though, I found myself wondering about the economic implications of a world where employers can monitor employees with relative ease.

One of the famous theories in labour market economics, put forward by Carl Shapiro and Joseph Stiglitz in 1984, is based on the idea that there is a fundamental “information asymmetry” between employers and employees. In other words, employers cannot easily tell how much effort their employees are putting in. Because of this asymmetry, companies pay their staff more than the “going wage” to dissuade them from shirking.

It is not 1984 any more. The sort of monitoring in last week’s European Court of Human Rights case is just the start. You only have to look at products such as Worksnaps to see how utterly technology has changed the game.

Worksnaps is a piece of software that takes regular screenshots of a worker’s computer screen (with their full knowledge), counts their mouse and keyboard clicks each minute, and even offers the option of capturing webcam images. The customer testimonials are worth reading. One small business owner enthuses that she was able to “find and weed out” workers who were chatting on Facebook even though she was in the US and they were in the Philippines.

It might not stop there. I once interviewed an executive from Kronos, a “workforce management” company, who waxed lyrical about the potential for wearable technology to measure workers’ tiredness levels in real time. She reasoned this would help employers not to overwork their staff.

To put it in economic terms, information in the workplace is becoming less asymmetric by the day. Many companies might welcome this as they struggle to boost productivity, co-operate with regulators and combat the threat of rogue employees.

Some economists see it the same way. Alex Tabarrok and Tyler Cowen argued in a recent essay that better workplace surveillance would allow employers to hire more people and take risks with outsiders who do not come with flawless pedigrees.

Still, it is hard to avoid one simple fact about workplace monitoring: people do not like it. Even when employers are open and clear about what they monitor and why, they risk giving the impression that they do not trust their own staff. If you act like you cannot trust them, you should not be surprised when they act like they cannot be trusted. That might be a parenting cliché, but it is also true. Workplace surveillance risks making mutinous teenagers of us all.

Perhaps this is a manageable risk in a world where you can easily identify and fire any rebellious workers, but employers would do well to remember they do not have a monopoly on the use of technology. Cyber-spying from employers is being met with guerrilla cyber-resistance from employees.

There are the drivers who plug cheap GPS jammers from China into the cigarette lighter slots in their vans to confuse their companies’ tracking systems. Or the workers who strap their employer-provided Fitbits on to their dogs to boost their “activity levels” for the day. Remember the business owner who used Worksnaps to monitor her workers in the Philippines? She found they were using programs to fool the software into thinking they were working. Worksnaps had to design a tool to identify the cheaters.

These cat-and-mouse games must waste a lot of time. It makes me wonder why more employers do not use technology to refine how they measure workers’ outputs rather than their inputs. Admittedly, it must be harder to do that in some industries, but surely every employer has an idea of what they expect employees to produce.

My employer, for example, can measure how many people are reading this article online, how far down they read before they lose interest, and whether it inspires anyone to buy an FT subscription. This is daunting but at least I feel I am being judged on the value of what I actually produce, and not the number of keyboard clicks and tea breaks it took for me to produce it.

Twitter: @sarahoconnor_

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