Behavioural Finance in Business - Essay Example

Behavioural Finance Introduction At the turn of the 20th century, traditional business practices underwent tremendous changes, and subsequently a new era of business emerged. Today, organisations are becoming increasingly competitive mainly due to the rush of new entrants. Hence, organisations consider employee productivity tactics as the key strategy to enhance the overall organisational performance. In order to promote this objective, today organisations widely use a new technique called employee surveillance. To define, employee surveillance or employee monitoring “is the act of recording or observing the actions of employees while on the job.” (Pinard & Romer 2011, p.220). Tapping telephone calls, monitoring computer and internet usage, and screening e-mails are some of the common employee surveillance practices. This paper will critically discuss the influence of workplace surveillance on managing people at work from the perspectives of both employers and employees. The paper will particularly focus on three relevant issues such as performance management, employee privacy, and use of information technology. Performance management Productive performance management is the ultimate goal of workplace surveillance programs. In order to effectively manage workplace or employee performance, it is necessary to measure employee performance levels frequently. Management professionals claim that surveys or other studies may not be an effective way to measure employees’ work performance and productivity. Furthermore, workplace surveillance is the only potential mechanism in today’s business environment as it is an impossible task for line managers and other executives to monitor each employee separately. Therefore, a vast majority of management experts strongly support the use of electronic surveillance techniques in workplace. According to the 2007 Electronic Monitoring & Surveillance Survey conducted by the American Management Association (AMA 2007), nearly 45% of business organisations monitor their employees’ computer, internet, and phone usage. The survey also indicates that a notable percent of employees were terminated for offensive language; excessive personal use of company properties; viewing, downloading, uploading offensive content; and breach of the firm’s confidential rules (ibid). These survey results support the top managements’ argument that workplace surveillance must be in operation to improve value chain efficiency and overall organisational productivity. From an employer’s perspective, the workplace surveillance system would put a moral check on employees and hence they may become more productive. In addition, if there is a workplace system in operation, employees would be conscious about future consequences in case of any workplace misconduct. Undoubtedly, every worker will be concerned about their long term employment and therefore they are less likely to involve in any fraudulent or unethical activity that would negatively affect their employment interests. Employers point out efficient time management as one of the potential benefits of workplace surveillance. By using improved electronic surveillance techniques, employers can save time that employees spend on non-work browsing and e-mailing activities. The AMA survey also reveals that 65% of businesses employ filtering software to track employees’ computer usage and thereby reduce non-work time (ibid). Finally, the workplace surveillance system would persuade employees to interact with business clients politely and patiently. Evidently, better employee-customer interaction would increase the business volume and net profitability. From many employees’ perspective, workplace surveillance would not improve performance management. Many of the employees argue that they cannot freely wok if there is a workplace surveillance system in operation. O’Rourke, Teicher, and Pyman (2011) assert that the surveillance system adds to workplace stress because employees hesitate to have fun time under a workplace surveillance environment. In other words, the idea of workplace surveillance often prevents employees from enjoying the job. Evidently, tough working conditions and increased workplace stress would lead to poor employee performance. Some employees claim that they can be more productive if they get some non-work time to spend on social networking sites or inter-employee relations. Hence, organisations can outweigh the loss of non-work time by the increase experienced in employee productivity. Employees argue that the process of workplace surveillance is ethically wrong as it hurts fundamental employee rights. They point out the fact that many of the organisations do not inform their employees that they are being monitored. Employee privacy According to Mujtaba (n. d.), admittedly, the idea of workplace surveillance severely affects employee privacy. Many organisations put strict restrictions on even personal life practices of their employees. To illustrate, some television channels restrict their employees from having a facebook ID by arguing that employees’ postings and comments may be misperceived as the channel’s opinion. Such acts must be considered as employers’ interference in employees’ personal life. From the perspective of an employee, he/she has some constitutional rights to privacy. In the opinion of Moore and Pack (2011), while a company using workplace surveillance system to promote workplace morality, it has the obligation to disclose the details of surveillance activities to employees and obtain the written acknowledgement from them. As response to different surveys, many employees have told that workplace surveillance policies often lead to feelings of resentment. Evidently, this situation weakens employees’ commitment to their firms and sometimes they may try to harm the management in many ways. It is evident that an organisation cannot grow well under an environment of high level employee resistance. As Ball (2010) identifies, employees think about new means of resistances and use technological advancements to limit the scope of workplace surveillance system. The author adds that “workplace surveillance has consequences for employees, affecting employee well-being, work culture, productivity, creativity, and motivation” (Ball 2010). Under a worksite environment where employee privacy is extremely limited by surveillance activities, it is less likely for organisations to maintain a healthy worksite culture because there is less chance for good employer-employee relationship. Employees point out that a worksite environment which is being monitored would not foster employee creativity. Under such a restrictive worksite environment, employees may not apply their creativity due to the fear that they may be fired by boss if an experiment goes wrong. As Richard (2012) says, job freedom is an important factor influencing employee motivation. When employees get the feeling that their boss/leaders trust them, they would be motivated to contribute more to organisational objectives; and therefore, the practice of workplace surveillance would negatively affect employee motivation (ibid). From the view point of many employers, employees do not require any kind of privacy in workplace. In other words, employers must have the right to know what all employees practice in the worksite. Hence, when employees have the right to privacy, employers have the right to know. Employers, who support workplace surveillance system, argue that employees do not need to worry about surveillance activities as long as employees’ acts are lawful and ethical. In order to justify the need of workplace surveillance system, employers point out excessive personal use and inappropriate internet usage practices by employees (SANS institute 2011). Employers claim that such practices would cause working time loss and hence reduce the overall organisational productivity (ibid). They also point that top executives can spend more time in other productive purposes such as marketing and selling if there is an effective workplace surveillance system in operation. Usually, organisations try to protect their employees’ privacy by keeping their personal information and medical reports undisclosed. Referring to this, some management experts hold the view that workplace activities are not related to an employee’s personal life. Therefore, the practice of workplace surveillance would not constitute the breach of right to privacy. Use of information technology Today, information technology is widely used for supporting workplace surveillance activities. Management experts who stand in favour of workplace surveillance practice argue that information technology can be better applied for promoting workplace surveillance because it is far efficient than traditional techniques. They add that the use of information technology would assist employers to enhance loss prevention in addition to identifying unethical employee practices. One of the important benefits of IT is workplace surveillance is that it is very effective in preventing theft (Guerin, n. d.). In addition, it may aid employers to prevent an employee or any other management official from selling proprietary company information to the firm’s competitors. Using latest IT applications, it is possible for the employer to recover incriminating records or emails that employee has removed from the company database. Hence, IT enables organisations to recover deleted items from the office computer and use them as evidence of employees’ wrong doing. Some management professionals are of the view that IT based workplace surveillance would inspire employees to be more productive without the need of unpleasant interventions. Lack of widespread federal and state regulations regarding workplace surveillance simplifies legal consequences for wrongdoing employees. Therefore, employees may take advantages of this favourable situation and continue their unethical workplace practices. This weak statute necessitates the need of IT powered workplace surveillance system. From an employer perspective, evidence documentation is one of the most potential advantages of workplace surveillance (Cripps 2004). If an employee steals something from company showroom but tries to blame customers for the issue, or if a customer is abusive on the phone but tries to blame the customer care executive, the IT powered workplace surveillance systems would reveal the truth. Hence, employers argue that this system helps to support or punish staff members based on well documented surveillance evidences. In addition, IT based workplace surveillance is beneficial for companies to cut down their training costs. To illustrate, companies can use mechanisms such as video surveillance to assist their new employees to get a clear view of their job duties. However, IT powered workplace surveillance system has some drawbacks too. Mainly, an organisation needs to spend huge initial costs for the installation of workplace surveillance systems. In addition, the firm has to employ additional staff members to continuously monitor surveillance systems and note significant events. Cost of frequent system maintenance and software updation reduces the scope of IT powered workplace surveillance. It is identified that workplace surveillance practices often lead employers to a false sense of security. Once an employer activates workplace surveillance, he assumes that everything is safe and there is no scope for unlawful or unethical business practices. However, reports indicate that devious employees may use anti-security technologies to defeat their organisation’s monitoring system. Conclusion From the above discussion, it is clear that the practice of workplace surveillance has positive and negative effects on workplace performance. From an employers’ perspective, the knowledge that there is a surveillance system in operation would persuade employees to carry out their duties and responsibilities efficiently and this situation may assist top executives to make their employee more productive. From the view point of an employee, the practice of workplace surveillance would hurt employee privacy and the condition is likely to result in feelings of resentment. Evidence documentation is the most potential benefits of IT powered workplace surveillance. However, this system is very expensive to get installed initially. In addition, devious employees’ acts can reduce the scope of workplace surveillance to some extent. References American Management Association. 2007 Electronic Monitoring & Surveillance Survey. “Over Half of All Employers Combined Fire Workers for E-Mail & Internet Abuse”. [Online] available at http://press.amanet.org/press-releases/177/2007-electronic-monitoring-surveillance-survey/ [Accessed 27 Sept 2012]. Ball, K. (2010). “Workplace surveillance: an overview”. Labor History, 51 (1), pp. 87-106. Cripps, A. 2004. Workplace surveillance. Intern at NSW Council for Civil Liberties. [Online] Available at http://www.nswccl.org.au/docs/pdf/workplace%20surveillance.pdf [Accessed 27 Sept 2012]. Guerin, L. (n. d.). ‘Workplace Cameras and Surveillance: Rules for Employers. Filming employees at work may violate their right to privacy’. NOLO. [Online] Available at http://www.nolo.com/legal-encyclopedia/workplace-cameras-surveillance-employer-rules-35730.html [Accessed 27 Sept 2012]. O’Rourke, A., Teicher, J & Pyman, A. 2011. “Internet and Email Monitoring in the Workplace: Time for an Alternate Approach”. The Journal of Industrial Relations. 53 (4):  pp. 4522-533. Moore, B & Pack, A. 2011. “Workplace Surveillance: Balancing the Employee’s Right to Privacy With the Employer’s Right to Know”. Dinsmore. [Online] Available at http://www.dinsmore.com/workplace_surveillance/ [Accessed 27 Sept 2012]. Mujtaba, B. G. (n. d.). “Ethical Implications of Employee Monitoring: What Leaders Should Consider”. Journal of Applied Management and Entrepreneurship. [Online] Available at http://www.huizenga.nova.edu/Jame/articles/employee-monitoring.cfm [Accessed 27 Sept 2012]. Pinard, K. T & Romer, R. M. 2011. CMPTR (with Bind-in Printed Access Card). US: Cengage Learning. Richard, J. 2012. "What has the internet ever done for employees? A review, map and research agenda", Employee Relations, 34 (1), pp.22 – 43. SANS institute. 2011. Managing Internet Use: Big Brother or Due Diligence? SANS Institute InfoSec Reading Room. [Online] Available at http://www.sans.org/reading_room/whitepapers/policyissues/managing-internet-use-big-brother-due-diligence_487 [Accessed 27 Sept 2012]. Read More