Human Resources: Executive Summary: Employee Privacy

To paraphrase an old song, technology is the word. It's the rapidly changing driver that has employers treading gingerly through a minefield of issues as they try to reconcile the need to protect personal and proprietary data with the privacy rights of employees and customers. And because it's changing so fast, many times there are no guidelines for employers who want to do the right thing.

On the plus side, technology allows companies to easily keep track of data that includes such diverse information as the number of widgets a distributor has ordered and customers' credit card numbers as well as sensitive employee data such as social security numbers and health information. It allows monitoring, both on and off the job site, to ensure that employees are actually performing the work they are paid to do. It also provides protections for that data ranging from firewalls to implanted chips that limit access to that information to a select few. And it allows companies and their employees to reach thousands, if not millions, of potential customers with advertising and blogs designed to extol the corporation.

On the minus side, the slew of computer-retained data is, unlike paper records, almost impossible to dispose of. Having all that information stored conveniently on a memory chip makes it easy to lose if a company's defenses are breached. The development of "thumb drives" and other minuscule devices makes it easy for insiders to breach a company's defenses and waltz away with scads of information, sometimes without the employer's ever suspecting the data has been compromised until it is too late. Steve Roop, vice president of marketing at San Francisco-based Vontu, which specializes in data-loss prevention, estimates that between 70% and 80% of the risk is from insiders.

Those breaches cost time, money, reputation, and consumer and employee confidence and can hurt the value of stock.

It's not just data that workers can steal. A 2006 survey of 2,694 U.S. workers by the Hudson Highland Group found that 23% say they have searched for a job while on company time. And a 2005 survey of 1,100 U.S. workers by New York-based Vault, Inc. found that a whopping 87% admitted to surfing non-work related Internet sites while on the job.

Once workers get home - and sometimes while still on the job - they still have access to computers and can create their own blogs that discuss what goes on at work. The threat is obvious: Company secrets can be imperiled. Company reputations can be harmed. Other employees can be defamed.

What's a company to do?

Looking to laws and courts helps some. But some technologies, such as blogging, have developed so fast, that no statutes or case law exists. And multistate employers face a hodgepodge of rules as state legislatures grapple with merging technologies and the threat to privacy.

Most employers have resorted to monitoring of some sort. A 2005 survey by the Alexander Hamilton Institute in New Jersey found that 78.5% of employers track workers' use of electronic communications, whether that is the Internet, telephone, e-mail or something else.

But that monitoring may come at a cost. Some studies show that closely monitored employees are unhappier. They tend to think that they are being monitored because their employer does not trust them and wants to check productivity, according to a 2005 survey of 526 corporations by the American Management Association/ePolicy Institute.

Some companies, however, have found ways to track employees without angering them. Roto-Rooter, for example, sold the employees on the benefits of location-tracking technology. The technology, the company showed, could increase employees' client base. David Linsalata, an IDC research analyst, concluded, "When employees see a clear benefit - a way to enhance their own productivity - they're much more accepting than when GPS is used as a way to keep track of the employee."

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The Institute for Corporate Productivity (i4cp, inc.) improves corporate productivity through a combination of research, community, tools and technology focused on the management of human capital. With more than 100 leading organizations as members, including many of the best-known companies in the world, i4cp draws upon one of the industry’s largest and most-experienced research teams and Executives-in-Residence to produce more than 10,000 pages annually of rapid, reliable and respected research and analysis surrounding all facets of the management of people in organizations. Additionally, i4cp identifies and analyzes the upcoming major issues and future trends that are expected to influence workforce productivity and provides member clients with tools and technology to execute leading-edge strategies and "next" practices on these issues and trends. i4cp is a for-profit company with offices in St. Petersburg, Florida.