Report — From the March 2015 issue

The Spy Who Fired Me

The human costs of workplace monitoring

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Last March, Jim Cramer, the host of CNBC’s Mad Money, devoted part of his show to a company called Cornerstone OnDemand. Cornerstone, Cramer shouted at the camera, is “a cloud-based-software-as-a-service play” in the “talent-management” field. Companies that use its platform can quickly assess an employee’s performance by analyzing his or her online interactions, including emails, instant messages, and Web use. “We’ve been managing people exactly the same way for the last hundred and fifty years,” Cornerstone’s CEO, Adam Miller, told Cramer. With the rise of the global workforce, the remote workforce, the smartphone and the tablet, it’s time to “manage people differently.” Clients include Virgin Media, Barclays, and Starwood Hotels.

Cornerstone, as Miller likes to tell investors, is positioning itself to be “on the vanguard of big data in the cloud” and a leader in the “gamification of performance management.” To be assessed by Cornerstone is to have your collaborative partnerships scored as assets and your brainstorms rewarded with electronic badges (genius idea!). It is to have scads of information swept up about what you do each day, whom you communicate with, and what you communicate about. Cornerstone converts that data into metrics to be factored in to your performance reviews and decisions about how much you’ll be paid.

Illustration by John Ritter

Illustration by John Ritter

Miller’s company is part of an $11 billion industry that also includes workforce-management systems such as Kronos and “enterprise social” platforms such as Microsoft’s Yammer, Salesforce’s Chatter, and, soon, Facebook at Work. Every aspect of an office worker’s life can now be measured, and an increasing number of corporations and institutions — from cosmetics companies to car-rental agencies — are using that information to make hiring and firing decisions. Cramer, for one, is bullish on the idea: investing in companies like Cornerstone, he said, “can make you boatloads of money literally year after year!”

A survey from the American Management Association found that 66 percent of employers monitor the Internet use of their employees, 45 percent track employee keystrokes, and 43 percent monitor employee email. Only two states, Delaware and Connecticut, require companies to inform their employees that such monitoring is taking place. According to Marc Smith, a sociologist with the Social Media Research Foundation, “Anything you do with a piece of hardware that’s provided to you by the employer, every keystroke, is the property of the employer. Personal calls, private photos — if you put it on the company laptop, your company owns it. They may analyze any electronic record at any time for any purpose. It’s not your data.”

With the advent of wireless connectivity, along with a steep drop in the price of computer processors, electronic sensors, GPS devices, and radio-frequency identification tags, monitoring has become commonplace. Many retail workers now clock in with a thumb scan. Nurses wear badges that track how often they wash their hands. Warehouse workers carry devices that assign them their next task and give them a time by which they must complete it. Some may soon be outfitted with augmented-reality devices to more efficiently locate products.

In industry after industry, this data collection is part of an expensive, high-tech effort to squeeze every last drop of productivity from corporate workforces, an effort that pushes employees to their mental, emotional, and physical limits; claims control over their working and nonworking hours; and compensates them as little as possible, even at the risk of violating labor laws. In some cases, these new systems produce impressive results for the bottom line: after Unified Grocers, a large wholesaler, implemented an electronic tasking system for its warehouse workers, the firm was able to cut payroll expenses by 25 percent while increasing sales by 36 percent. A 2013 study of five chain restaurants found that electronic monitoring decreased employee theft and increased hourly sales. In other cases, however, the return on investment isn’t so clear. As one Cornerstone report says of corporate social-networking tools, “There is no generally accepted model for their implementation or standard set of metrics for measuring R.O.I.” Yet this has hardly slowed adoption.

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is the editor of the Investigative Fund at the Nation Institute and was a 2013–2014 Alicia Patterson Fellow.

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