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Ethical Employee Time Tracking: Balancing Productivity and Privacy

July 5, 2024

employee time tracking

Employee time tracking can be a double-edged sword.

While this technology provides undeniable benefits for productivity and operational efficiency, its misuse can lead to serious consequences such as low employee morale and privacy infringement.

So, how do you balance employee privacy with productivity through ethical time-tracking practices? Let’s find out.

The benefits of employee time tracking

The popularity of employee time tracking systems has been on the rise since remote working became the norm. With remote employees, companies needed to find a way to collect and calculate their work hours for payroll and ensure employees were using their time productively. 

Data collected with time-tracking tools is pivotal for many businesses’ operational efficiency and profitability. 

So, why is employee time tracking needed?

Using employee time tracking to optimize revenue generation

Employee time tracking has the highest impact on revenue. Businesses in the U.S. lose $650 billion per year due to a lack of productivity. 

Here are some ways in which employee time tracking impacts revenue and can positively impact a company’s bottom line: 

  • The first impact is for businesses that work on an hourly basis or bill the time worked on projects and services to their clients.
    This case often applies to agencies that must provide an accurate and transparent report to clients to get paid. So, unless they diligently monitor employees performing every task, they cannot capture and accurately invoice all billable time. This also indirectly leads to a better and more transparent client relationship and satisfaction.
  • Secondly, employee time tracking provides insights that indirectly drive financial growth.

    Workforce analytics gives you data-driven insights into driving sales, enhancing productivity, employee retention, or properly splitting the workload between employees. You may as well discover that you're paying for software tools that aren't used and are inefficient or time-consuming. All these insights contribute to your revenue.

Enhancing workforce productivity with employee time tracking

With fierce growing competition, the need for productivity and an equipped, fast workforce is pivotal. Monitoring software helps provide the vital element for such a workforce: data. For example, a software development company might use time tracking to identify that developers spend excessive time debugging due to outdated tools, prompting an investment in better software solutions.

Time tracking helps you answer the evergreen question of how to measure employee productivity. Your reasonable expectation to constantly enhance productivity is entirely feasible. Moreover, the data collected through the employee time tracking software is a good conversation starter about employee performance.

Time tracking software benefits not just the business but also your employees. These tools provide data on time spent on different projects or tasks, allowing employees to understand how they spend time and develop effective means to manage it better. Interestingly, without the employer's direct involvement in this process, each employee is equipped with data to understand their areas for efficiency improvement, plan tasks better, and inform their future decisions.

In the picture below, you can identify an example of time-tracking data that shows an employee's app usage and the times the employee is productive or unproductive. This way, each individual is equipped with data that can change productivity and employee behavior at work.

an example of time-tracking data that shows an employee's app usage and the times the employee is productive or not

Source: Timeular

Identifying operation gaps with employee time tracking 

A detailed report on how employees spend time on tasks and projects helps pinpoint inefficient processes, scope creep, inadequate planning, unnecessary steps, or bottlenecks that require optimization. 

Such an ongoing feedback loop provides you with information to implement incremental and constant process changes.

Enhancing accountability with employee time tracking 

An employee time tracking tool can encourage responsible work habits and hold employees accountable for their work.

This does not imply constant surveillance leading to a hostile work environment but means giving your team some external motivation or nudges to stay accountable, just as a deadline would sometimes do. 

Ultimately, it depends on the company's culture and values, but it is important to ensure that your employees perform their tasks. This applies particularly to remote employees, for whom the traditional supervision techniques no longer apply because they are in different locations or time zones.

Employee time tracking as a tool to detect potential security threats

While your organization strives for efficiency, it must also focus on mitigating security risks.

Data breaches are more common than you'd think, and larger organizations are often targets of hackers. They also face internal security threats like sensitive data leaks from previous employees. According to Cyberhaven’s 2022 Insider Risk Report, nearly one in ten employees (9.4%) will exfiltrate data over a six-month period, and they’re much more likely to take sensitive information in the two weeks before they resign.

Employee time-tracking software can also help prevent security threats that put your organization at risk. In this case, monitoring employee activity is one of the most legitimate business purposes. You'll understand what actions your employees took in the event of a data breach, and the data collected through monitoring employees will answer your questions.

Where time-tracking apps get it wrong with ethical data collection

There are many ways in which monitoring employees is done wrong, and it impacts employee morale, trust, and performance at work. Let's unpack some of them:

  • Tracking locations unnecessarily:  Workplace monitoring is unnecessary in particular cases. These could be relevant for employees who work on client sites and need to know how much time they spend in a location or for remote workers.
  • Tracking screen activity: Often, screenshots are not a way of gaining employee productivity and are highly invasive.

    This way, you'll end up monitoring employees' work habits and every break they may have, which creates a feeling of distrust and discomfort, such as Big Brother is watching. Moreover, this type of employee monitoring does not inform your decisions on metrics, it's just an invasion of privacy. 
  • Monitoring keystroke: This metric can't contribute to business goals in any way. Knowing the exact number of keystrokes is not a glimpse into how efficient an employee is. It does not inform operational activity. 

    For example, remote employees might need to communicate much more via Slack or other communication channels than hybrid or in-office workers. So, keystroke monitoring is just a measure that gives you information overload but not valuable workforce analytics.
  • Collecting and storing sensitive data: Sometimes, tracking systems monitor and store sensitive information about employees in the public cloud. Privacy concerns are massive in such a context, particularly if employers are storing information from personal devices with personal data.
  • Weaponizing or misusing time tracking data: All the above measures encourage misusing collected data, and either some employees are given more work, or they are micromanaged, reducing their sense of autonomy at work. At the same time, some systems can make people feel fear and that they are under constant surveillance, negatively impacting their well-being. 

Features to look for in employee time tracking tools to minimize intrusion

There's no better way to balance time tracking with productivity than choosing the right employee time tracking tool features.

Prioritize ethical concerns first

If you want to monitor employees ethically, choose a time-tracking tool committed to ethical practices. Make sure they abide by privacy laws and regulations and offer transparency on how and where they store monitored data from the get-go.

Check their policies on all possible ethical concerns, from respecting employee privacy rights to avoiding methods like keystroke monitoring.

Choose data privacy

As there are risks associated with capturing and collecting data in public clouds, try to look for time-tracking tools that store employees' data only locally, on their computers. If the data is, however, stored in public storage, ensure you're choosing a tool with robust data backup and storage policies.

Check for anti-surveillance features

Monitoring employees in real-time as a manager or employer is intrusive. Moreover, it can cause disparities between your desired outcome (gaining insights into when work will be done) and the actual result. You might discover that you're hindering employees' productivity and creating a dysfunctional culture of distrust instead.

So, choose time-tracking features that delay a manager's access to the tracked data within 12 or even 24 hours to secure a safe environment in your team.

Choose 100% employee privacy for certain data

Look for tools that encourage 100% privacy when it comes to specific data. For example, maintain the confidentiality of the websites that employees browse unless they choose to disclose this data. 

Employee time tracking best practices

In today's fast-paced work environment, it’s crucial to let your employees get the most out of their work day. Whether you manage a team or are an individual contributor, understanding how time is spent can be a game-changer.

Time-tracking tools and employee monitoring software have become increasingly popular for this reason.

But with any new system, it's important to implement it effectively. Here are some best practices to ensure time-tracking is positive and productive for everyone involved:

Create a transparent employee monitoring policy

Starting with the basis of explaining why you're making employee monitoring efforts and explaining how it is vital for employees to trust the tool, as well as use it efficiently. Clearly communicate what data is being collected, too. Otherwise, you might stumble upon low usage of a tool you've invested in, and your goals, such as boosting employee productivity, may not be fulfilled. 

Communicate clearly that your goals are to increase productivity or to protect company devices and sensitive information from threats. Inform employees that you're not trying to surveil them and weaponize the tracked data against them but to make informed decisions.

An example of workplace monitoring that was not clearly communicated from the beginning was Barclays installing sensors underneath employees' desks in their London office without properly explaining their purpose.

That resulted in employees taking the sensors off or throwing them away, even if they were told the sensors' purposes were targeting office space usage.

Obtain employee consent

Obtaining employee consent goes a long way when using such a tool, and it's the foundation of employee monitoring ethics. You can't expect employees to share such private information and employees' personal data unless you obtain their explicit consent.

Provide an opt-out option for employees unwilling to share the data you want to collect. Remember that your monitoring policies should be based on a legitimate business reason.

Measure the metrics that truly matter

Electronic monitoring clearly aids in understanding how to grow your business by surfacing some of its operational dysfunctionalities. However, as mentioned, monitoring how much time employees spend typing on their keyboards is not a metric that impacts process changes.

Here are some important metrics that can impact productivity and the business overall:

  • Customer satisfaction scores: There’s no better and more direct feedback than the one from customers for an employee with customer interaction. Some of the ones to check in this particular case are customer satisfaction score (CSAT), net promoter score (NPS), first call resolution (FCR), and average wait time (AWT). 
  • Task completion rates: Track the number of tasks completed on time versus the number of overdue tasks per week or month to inform an employee’s workflow efficiency.
  • Output volume: Measure the number of tasks completed in a timeframe, such as the number of projects, units produced, articles written, etc. 
  • Project management: Track and understand an employee’s progress on projects against milestones and how they’re solving bottlenecks to achieve the end goal. You can look at the percentage of milestones achieved on time, the number of times a project goes off track, and the average time to resolve project bottlenecks.
  • Teamwork: Assess whether an employee collaborates with other team members or has good interdepartmental collaboration on joint projects. 

    You can look at the frequency of participation in team meetings and discussions, the number of times an employee seeks or provides help to colleagues, and the feedback from colleagues on collaboration and communication skills through surveys or peer reviews.
  • Improvements and innovation: Track if an employee is keen on making progress. This can include looking at the number of suggestions submitted for process improvement, the number of times an employee identifies and solves problems with existing methods, and their participation in innovation workshops or training programs.
  • Employee engagement: If you monitor employees but they are no longer engaged or motivated by their work, it's redundant to monitor their activity.  It's rather important to get employee buy-in and foster a healthy workplace culture. 

    By starting to monitor employees who are not productive, you might get the opposite outcome at times, so start with understanding them, their motivations, and their needs. You can have regular employee satisfaction surveys, examine absenteeism and turnover rates, and measure employee net promoter scores (eNPS).

Minimize data collected

Make sure you're collecting only data that informs decisions that impact your business decisions. Avoid collecting personal data on personal devices or employee communications if these do not impact the metrics you want to enhance.

Avoid misuse of time-tracked data

Avoid micromanagement or weaponizing data for unrelated purposes. Once your policy promises specific goals, you should comply with them. Otherwise, your employees will lose trust and feel surveilled.

Enhance employee autonomy

Your employees should feel they're in control of their privacy and monitoring. Allow them a degree of autonomy. If your employees have specific requests, such as not monitoring free time or their breaks, respect this reasonable expectation of privacy.

Building employee trust with ethical time tracking

Time tracking provides invaluable data to a business and is highly beneficial. However, if misused or weaponized against your employees, it backfires and hinders productivity.

Ethical employee time tracking is vital. Balancing productivity with time tracking involves crucial elements like choosing non-intrusive features and implementing monitoring tools with clear employee guidelines. Businesses can foster a productive and trust-based work environment by prioritizing employee privacy, providing transparency, and using data responsibility.

Understand how workforce management boosts productivity by empowering your employees and streamlining HR processes.

Edited by Shanti S Nair

time tracking software Clock in better productivity!

Optimize your workforce with intuitive time tracking software that simplifies scheduling, timesheets, and attendance.

time tracking software Clock in better productivity!

Optimize your workforce with intuitive time tracking software that simplifies scheduling, timesheets, and attendance.

Ethical Employee Time Tracking: Balancing Productivity and Privacy Minimizing intrusion and allowing employees to feel safe tracking their work while achieving productivity should be normal. Read more to see how.
Madalina Roman Madalina Roman is a time management geek and content writer at Timeular. She meticulously tracks time and spreads the news about time management, work habits, and how AI can be leveraged for productivity.

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