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Is Employee Privacy Counterproductive?

In the interests of corporate profitability, should employees be forbidden a private life?

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BY Geoffrey James - 13 Feb 2019

employee privacy

PHOTO CREDIT: Getty Images

I'm being a bit of devil's advocate here, but maybe when it comes to employee privacy, we should just bow to the inevitable and kiss it goodbye... forever. Here's why: if 99% of the CEOs in the world are correct, employee privacy is bad business and thus should be eliminated by any means possible.

It wasn't always this way. In the mid-20th century:

  • Employees had the right to make private calls on their office phones and it was against the law for those calls to be monitored or recorded.
  • Private offices (sometimes shared with another co-worker) were common except for the lowest rung of clerical workers.
  • Intentional eavesdropping (like using a glass to listen through the wall) was a social taboo, even in the workplace.
  • There was a sharp divide between work life and private life. Seeking to know what employees did on their own time was considered, well..., un-American.

Since then, however, corporate culture has chipped away (more like jackhammered away) at the entire concept of employee privacy to the point where it's practically become an oxymoron. Consider:

  • Nearly 80 percent of companies monitor their employees' usage of phones, email and Internet access, up from 35% from the years before the advent of the personal computer. (From ABC News)
  • Fully 8 percent of employee wellness plans offer "voluntary" fitness trackers but, as every savvy employee knows, "your participation is voluntary" is corporate-speak for "your participation is mandatory." (From The Christian Science Monitor.)
  • According to a 2006 study, "84% of private employers conduct pre-employment drug testing, 39% conduct random screening of employees, 73% conduct for-cause testing, and 58% require drug tests after on-the-job accidents." (From The Society of Human Resource Management.)
  • Some companies are now asking employees to "voluntarily" (and we know what "voluntarily" means) have an RFID chip implanted under their skin so they can be tracked everywhere they go. (From the MIT Technology Review.)
  • Many big companies like IBM and Bank of America are eliminating or reducing their work-from-home programs and demanding that employees commute to a central location. (From NBC News.)
  • Some 80% of American companies have implemented an open plan office, a design that keeps every employee--and their workstations--visible at all times. (From Vice.)

Of course, the scientific consensus, based upon numerous peer-reviewed studies is that open plan offices don't increase productivity. There are also numerous scientific studies showing that when are happier when they have more privacy and, being happier, are more productive, innovative and creative.

Why, then, do so many companies continue to move in the opposite direction? There are only two possible reasons: 1) CEOs are fad-driven idiots, or 2) CEOs actually know exactly what they're doing.

Now, I have met some big company CEOs who, IMHO, were about as bright as a refrigerator bulb but--let's be honest here--most CEOs are smarter than the average bear. So it behooves us to ask whether they might actually be onto something. Maybe employee productivity and employee privacy are indeed mutually exclusive.

But... but... the science says otherwise! True dat, but every scientific study on the subject treats productivity as isolated metric as in "do this thing differently and employees will get more done in the same amount of time."

I'm not sure CEOs see it that way.

I strongly suspect that most CEOs care more about profitability than productivity. They see their job not as fulfilling the potential of every individual but instead as "getting the most amount of work accomplished for the least amount of money."

I hardly think I'm telling tales out of school by pointing this out.

From THAT perspective, it may be more productive (i.e. profitable) to take a hit--and perhaps even a big hit--in the amount of work each employee accomplishes per day, providing it's offset by a larger reduction in cost per employee.

With that in mind, what are the economic benefits--to the company--of eliminating employee privacy? Several come to mind:

  • Less liability for illegal online activity.
  • Less goldbricking and malingering.
  • Less likelihood of employee sabotage.

Those reasons, however, seem on the periphery of the real economic value which is that reducing employee privacy increases informational asymmetry. Or in layman's terms: them's as knows less gets screwed.

Nowhere is the power of informational asymettry clearer than in the gig economy, according to Professor Alexandrea J. Ravenelle, author of the forthcoming book Hustle and Gig: Struggling and Surviving in the Sharing Economy:

"Informational asymmetry arises when clients aren't always forthcoming about what exactly is involved with a task. For instance, one young woman was hired to clean an apartment only to discover it was a post-construction cleaning with contractor-grade chemicals. And the platforms contribute to this informational asymmetry. Drivers don't know a destination until they accept a ride, and the services aren't forthcoming with workers about any potential problems they may experience. The platforms also don't seem to want to know about dangers -- there's no easy way for workers to report questionable situations and to be protected from backlash, and clients are free to set up burner accounts."

In other words, keeping gig workers in the dark makes companies like Uber and TaskRabbit more profitable.

The same is true in more traditional work environments, where the elimination of employee privacy has been accompanied by even less top-down transparency on issues of obvious interest and use to employees, like salary data.

In short, the elimination of employee privacy is an attempt to remove power from the employee and place it in the hands of the employer, thereby putting the employee at vast disadvantage when it comes to negotiating compensation or benefits.

In short, from the perspective of an employer who believes that the sole purpose of a corporation is to generate shareholder value, employee privacy is indeed counterproductive and any remnants that remain should be immediately expunged.

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