Effects of an Electronic Monitoring System on Employees’ Productivity in Telecommuting Arrangements

When employees work from home, organizations have traditionally placed a stronger reliance on output-based controls due to the inability to physically observe their employees. Due to recent advances in technology, however, many organizations now use input-based controls. One such input-based control is an electronic monitoring system, which records the number of hours spent working and leaves out any time in which an employee does not perform work activities. On the one hand, an electronic monitoring system may provide productivity-enhancing benefits by reducing the likelihood of employees engaging in opportunistic behavior, such as their self-control problems. On the other hand, an electronic monitoring system may motivate reduced effort by increasing employees’ stress and decreasing their autonomy and job satisfaction, all of which decrease productivity. We take advantage of a field-research setting in which the organization adopts an electronic monitoring system for its telecommuting employees. We find the electronic monitoring system leads to a productivity increase for telecommuting employees. We also find the electronic monitoring system reduces employees’ self-control problems. Our results suggest technology can play a significant role in expanding organizations’ management control choices when achieving controls in telecommuting arrangements.