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Watching the workplace: How HR can strike a balance between productivity tracking and employee privacy

As flexible work becomes a standard offering across industries, many employers are leaning on digital productivity tools to better understand how, when and where work gets done. For human resources leaders and executives, this new visibility is appealing. However, it comes with a major responsibility. How do you ensure that the tools you implement enhance productivity without harming employee trust or violating privacy expectations?

The answer starts with intentionality. Monitoring can serve a legitimate business need when done with purpose and clarity. But without boundaries, surveillance technologies can quickly backfire, harming morale, increasing turnover and creating legal vulnerabilities.

Monitoring is on the rise in the modern workplace

Since the onset of the remote work revolution in 2020, organizations have rapidly adopted employee monitoring tools. Some track screen time, application usage or email activity. Others go further, recording keystrokes, capturing screenshots, logging video or audio feeds, and even using AI to assess facial expressions or tone of voice. This trend — often referred to as bossware — is reshaping how work is measured and managed.

This type of monitoring has grown substantially, especially in industries with sensitive data or compliance requirements. On the surface, these tools can help mitigate risks, improve accountability and support data-driven decisions. However, in practice, many systems collect more data than necessary.

Why monitoring can erode trust

When employees feel surveilled instead of supported, productivity suffers. Over-monitoring leads to decreased psychological safety, disengagement and ultimately more turnover — all outcomes that counter what most employers aim to achieve.

Employees who feel they are being watched too closely may feel demoralized or undervalued. The psychological impact of constant surveillance is real. In fact, more than half of workers who are monitored at work report feeling tense or stressed on the job. Employees under digital surveillance are also significantly more likely to rate their mental health as poor or fair, and nearly half say their workplace negatively affects their well-being.

These findings underscore a critical insight — when surveillance becomes the norm, it can chip away at mental health, emotional safety and overall engagement. For any organization focused on long-term performance, this risk can’t be ignored.

Retention also becomes a concern. High performers are not just chasing paychecks — they’re looking for roles that respect their time and mental health. More than 60 per cent of workers say they’d choose flexibility over a bigger salary if it meant avoiding rigid, in-person job requirements — a clear sign that autonomy and well-being are now expected.

When those expectations go unmet, employees are more likely to walk away. Replacing a single employee can cost around $5,000, not counting lost productivity and experience. Companies that don’t adapt may end up paying the price — both in talent and dollars.

The legal and ethical stakes are growing

Privacy law is evolving, and compliance matters. In Canada, the Personal Information Protection and Electronic Documents Act (PIPEDA) emphasizes necessity and transparency in any form of workplace surveillance. The European Union goes even further, with the General Data Protection Regulation requiring clear justification for any data collected from workers, along with strict limitations on use and retention.

For employers operating across jurisdictions or hiring remote workers globally, these legal frameworks demand careful attention. Ignoring them is risky and could lead to regulatory penalties or litigation.

A smarter approach to workplace monitoring

If you want to implement or refine your productivity tracking strategy, the first step is to clarify your goals. What exactly do you need to know, and what decisions will this data inform? If the answer is vague or overly broad, you may need to revisit the design of your monitoring system.

Transparency is non-negotiable. Employees should be informed about what is being tracked, how the information is used and who can access it. Offer clear documentation and engage in two-way conversations to answer questions and gather feedback.

Consent should not be treated as a checkbox. Even if the law allows monitoring without explicit approval, it is in your best interest to secure buy-in. Voluntary participation increases trust and promotes shared ownership of workplace success.

Proportionality also matters. Choose tools that capture the minimum data necessary to support your goals. Avoid intrusive features that gather unrelated personal information. And regularly evaluate whether your monitoring practices are still aligned with your workforce needs and values.

Investing in autonomy and flexibility

Instead of relying solely on surveillance, consider solutions that empower employees to manage their own time and results. Focus on outcome-based performance reviews, goal setting and real-time feedback loops that respect autonomy while maintaining accountability.

Employees want to be trusted. And when they feel that trust, they often deliver more value in return. Creating a culture of openness, fairness and mutual respect will outperform micromanagement every time.

Striking the balance for a sustainable future

Digital tools can provide invaluable insight into how work gets done, but they are not a substitute for human judgment and empathy. As an HR leader or executive, your role is to build systems that support both business goals and human dignity.

Balancing productivity tracking with employee privacy requires transparency, consent and a willingness to adapt. With clear policies, open communication, and respect for legal and ethical standards, you can foster a workplace that values trust as much as performance. And in today’s competitive talen