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The High Cost of Cyberslacking

December 1, 2000
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If there’s one thing that’s clearin today’s emerging digital economy, it’s that many of the competitive gainsof the last few years can be directly attributed to Internet connectivity. Forthe vast majority of companies, the Internet has established itself with thetelephone and the photocopy machine as an item of essential technology. 

    Yet, the gain comeswith some pain. Despite the enormous payoff from e-business and online access toinformation, the Internet has quietly emerged as a playground for workers, whoincreasingly trade stocks, download music, gamble, play games, buy books, readsports news, send e-cards, and frequent online red-light districts -- all duringworking hours. Others tap out jokes or send chain letters across the enterpriseand beyond, devouring bandwidth and brainwidth. 

    A  January 2000study by the Saratoga Institute found that nearly two-thirds of U.S. firms havedisciplined employees for Internet abuse, and slightly less than a third haveactually terminated workers. Fifty-six percent admit they know of employees whouse the Internet to gamble, look at pornography, and engage in other activitiesthat are not work-related. Meanwhile, a 1999 study by the American ManagementAssociation found that more than 50 percent of all Internet activity takingplace within companies is not business-related. The total cost? Billions ofdollars a year in lost productivity. 

According to market research...80 percent of companies will monitor employees' online behavior by July 2001.

    While most workerskeep their extracurricular activities to a minimum -- and some organizationsprefer to leave the wild frontier of the Internet unregulated -- cyberloafersand cyberslackers are becoming a big enough problem in the corporate world thatmany companies are beginning to crack down. In some cases, they’re puttingsophisticated monitoring systems in place. In other instances, they’resuspending and firing workers for Internet abuse. Not surprisingly, almosteveryone is grappling with developing a policy to deal with the problem. 

    Complicating thingsfurther is the fact that personal use of the Internet might actually provide apositive benefit. An August study conducted by Xylo, Inc., a work/life programsprovider based in Bellevue, Washington, found that 56 percent of employees whouse the Internet for personal reasons report that it helps them do their jobsbetter or simply makes them happier or less stressed-out employees. About 43percent claim that the Internet has no real impact -- positive or negative -- ontheir performance. 

    Of course, sortingthrough all the issues is no simple matter. It’s quickly becoming clear thatthe primary issue isn’t whether or not to provide Internet access and letemployees conduct personal business online, it’s how to manage the environmenteffectively. Developing a focused strategy and a clear policy that backs it upcan go a long way toward keeping workers and management happy and productive.Ultimately, HR must establish a policy that’s based on the needs, culture, andvalues of the organization. 

    Some companies arebeginning to get serious. Although Xerox Corp. allows employees a good deal oflatitude when it comes to surfing the Net, the company is intent on crackingdown on blatant violators. In October 1999, Xerox made headlines when itannounced that it had fired at least 40 employees for accessing Web sites deemedinappropriate in the workplace. Some workers had engaged in online gambling,others had day-traded stocks and viewed pornography. In some instances, theworkers had spent as much as eight hours a day engaged in non-businessactivities on company time. 

    Since then, Xeroxhas fired additional employees, while companies such as the New York Times,Edward Jones Investments, First Union Bank, and Dow Chemical have joined theparade. At Dow, inappropriate use of computer resources resulted in 50terminations last summer, and another 200 employees found themselves facingdisciplinary measures, including suspensions. 

    Managementdiscovered that it had a very real problem when an employee approached aworkgroup supervisor and complained that colleagues were exchanginginappropriate materials. The company began closely monitoring its e-mail serversand learned that a group of workers were in fact passing the materials back andforth, in direct violation of the company’s e-mail policy and anti-harassmentcode. All the individuals that Dow Chemical disciplined were encouraged to usethe company’s Employee Assistance Program (EAP) and seek counseling. Today,the company conducts regular audits and has stepped up education andcommunication efforts. 

    Some organizationshave found that, left unchecked, the issue can explode in their faces. Forexample, two industry giants, Chevron and Microsoft, found themselves settlingsexual-harassment lawsuits for $2.2 million apiece as a result of internallycirculated e-mails that, according to the law, might have created hostile workenvironments. In fact, many companies, as a direct response to these kinds ofproblems, have turned to sophisticated Web-monitoring software from firms suchas Websense, Elron Software, eSniff.com, and JSB SurfControl. 

    These programs canrecord every keystroke an employee types, even capturing words that theindividual later erases. The same software tracks which Web sites a workervisits, and issues an alert when an employee begins surfing an X-rated corner ofcyberspace. According to market research firm IDC, 80 percent of companies willmonitor employees’ online behavior by July 2001, up from 40 percent lastspring. In the past, some companies used filtering software programs, whichcould block certain sites or keywords, but those have proved somewhatineffective. In many cases, employees find ways to circumvent the programs. 

    If all themonitoring sounds like an invasion of privacy, you’re not alone in thinkingthat. Civil libertarians and privacy advocates bristle at the thought ofever-expanding corporate monitoring, even if it is perfectly legal. They arguethat the answer doesn’t lie in draconian rules and limitations on what anindividual can view, but in establishing ways to measure each employee’soverall performance. In fact, some workers say that since their work livesconstantly invade their homes, and they put in hours in the evening and onweekends, the workplace should also accommodate their personal or home lives. 

An enterprise can establish and document official e-mail and Internet usage policies, educate workers on why they're important and what they mean, and enforce and reinforce policies.

    It’s no time foran HR department to idly stand by. Dr. Kimberly Young, executive director of theCenter for Online Addiction in Bradford, Pennsylvania, says that employersshould “be willing to acknowledge the legitimacy of Internet addiction” and“be prepared to implement fair and appropriate strategies” to deal with theissue. Instead of imposing a zero-tolerance policy, which can alienate employeesand leave a company susceptible to litigation, an organization should fashion areasonable policy, and then train and educate its employees, she says. 

    Young believes thatall employers and HR professionals should follow some basic guidelines whendeveloping a company-wide policy to deal with Internet usage. First, it’sessential to evaluate current IT and HR policies. “Does the company have anyexisting policies for employees? Does the company update the policies to keep upwith the rapid pace of change occurring on the Internet?” Once an enterprisehas an understanding of where it is and where it needs to be, it can establishand document official e-mail and Internet usage policies, educate workers on whythey’re important and what they mean, and enforce and reinforce policies. 

    The key, says Young,is to offer ongoing and continual communication. Providing regular electronic“pop up” reminders that appear on each employee’s computer, and requiringeach individual to read and agree to the terms, can ensure that the word getsout. In addition, “An effective education process should also includeinformation about Internet addiction and its warning signs,” she notes.Finally, the program should provide rehabilitation as well as “fair andequitable penalties for non-compliance.” In most cases, the goal should be toget valued employees back on track rather than casting them off. 

    The end result?Improved employee productivity, better morale, lower turnover costs, and greaterprotection from legal liability. “The Internet is an amazing communicationtool that has changed the way business is conducted,” Young observes. “Byrecognizing the potential problems and issues that may arise with an increase inthe use of the Internet, employers and HR professionals can...increase theproductivity and resourcefulness of the business.” 

    The growing use ofthe Internet, combined with new technologies such as wireless Web browsing onphones and personal digital assistants, ensures that new and more elusive typesof mind candy will soon appear. The key is to strike the right balance betweenmorale and productivity. 

Workforce,December 2000, Vol. 79, No. 12, pp. 22-24 Subscribenow!

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