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Should You Stoop to Snoop?
Software lets you track the staff, but it raises plenty of morale and privacy issues

Want to know what Web sites your employees visit while they're supposed to be working, or where they are during the day -- all by looking at your computer screen? Then you might consider two new software products that fit under the blunt rubric of "snoopware" -- programs or technology that monitor how and when employees use your computers and networks, and keep track of their whereabouts.

Unlike most snoopware, which is often designed and priced for larger companies, both of these new products are billed as suitable for small companies. RuleSpace Enterprise Suite, made by RuleSpace Inc. in Portland, Ore., monitors whether your employees are viewing offensive Web sites. It targets companies as small as 50 people. OfficeBoard, from Trexar Technologies Inc. in Atlanta, tracks the whereabouts of your employees. It's aimed at the 10- to 100-employee company.

RuleSpace is an artificial-intelligence-based system that its maker claims is harder to circumvent than many existing products, which compare sites a person calls up with a list of prohibited ones. The problem with those older products is that their lists can easily get out of date. How does OfficeBoard work? Think of the old bulletin board where people posted messages saying where they are if they leave the office. Trexar says it has computerized that venerable system -- and given it new smarts.

Such products have found some success with big business. The American Management Assn. says around 20% of 1,100 members surveyed -- all companies with $50 million in annual revenues and 100 or more employees -- spot-check computer files and E-mail. The AMA stresses that 93% of those who do so tell their staffs. Large companies -- always afraid of lawsuits -- use the products to make sure their employees don't send harassing or insulting messages as well as to track productivity. But snoopware makers say small companies should be just as vigilant.

Of course, productivity and lawsuits are concerns for all businesses. Nonetheless, entrepreneurs should think hard about whether they really need technology to know what their employees are up to: Will it cause more problems -- particularly in the area of morale -- than it prevents?

For one thing, the head of a 25-person company has a much better notion of who's doing what than does a boss of a company with thousands of employees. "It is a little different for small businesses," says Mark Peabody, senior analyst and Internet-privacy expert at Aberdeen Group, a consulting firm in Boston. "Presumably, everyone is very close and working to a common goal. The CEO sees all the employees every day."

The second issue is the tone you want to set in a small company, where staff tends to be relatively intimate. RuleSpace's $3,000 software runs on a neural network, a kind of artificial intelligence that analyzes page content and decides whether the site is offensive or not by comparing it against a large sample of known pornographic sites. It then blocks access to sites that don't pass muster.

That sounds reasonable enough. The problem is RuleSpace makes a log of everyone's electronic perambulations, regardless of whether they're offensive or not. Worst of all, the whole process is entirely invisible to employees, and it's up to the company to divulge that it's spying on them. Once employees venture into forbidden areas, RuleSpace's software does show a message that says access to a certain site has been blocked due to company policy. But if management doesn't come clean about the snooping, it risks demoralizing the rest of the staff when it confronts an employee, and the surveillance becomes public.

By comparison, OfficeBoard seems relatively benign. Employees report when they're in or out of the office, when they're due to return, how they can be reached, or other messages. The information pops up on any designated employee's computer. The program does have a coercive side, though. The boss can see at a glance how cooperative everyone is because employees have the option of recording the time of each update. On the other hand, OfficeBoard doesn't create a computer log of people's movements. The software costs a minimum of $95 for 10 employees and rises to $725 for 100 employees.

Moral issues aside, in today's era of backup systems, special software may be superfluous. That's what Cormac L. Kinney, CEO and founder of NeoVision Hypersystems Inc., a New York consultancy that makes software for professional traders, discovered. Recently, when a fired employee threatened a retaliatory lawsuit, Kinney went to his E-mail server's back-up system, where he found four notes that showed the man was starting his own business on the job. "It shut down the case," Kinney says. In comparison, he feels snooping software, which might have provided similar evidence, would ruin the environment of trust in his 25-person shop.

Currently, it's legal to monitor computers in your own company, and no federal law forces you to divulge the practice to employees, say privacy experts. But that doesn't mean the practice won't be legally restricted someday. "The few court cases that there have been have come down on the side of the employers, on the theory that anything crafted on the computer system is the property of the employer," says David Sobel, general counsel for Electronic Privacy Information Center in Washington, D.C., an Internet-privacy watchdog group. "The natural tendency is that you are given a workstation and an E-mail account, and you have the illusion of privacy, and that is not the case," says Sobel.

Just because case law backs surreptitious employer surveillance, is it a good idea? Adrian Russell-Falla, chairman and founder of RuleSpace, says that in today's litigious workplace climate, companies should adopt aggressive policies to prevent behavior that an employee can use as the basis for a sexual harassment suit. "If you have a whole bunch of people pulling up pornographic sites, other employees could feel they are looking at a hostile workplace," Russell-Falla says. He argues that his software helps executives prove to a court that they weren't oblivious to such problems.

That's why John Calhoun, president of CMC Research Inc. says he installed RuleSpace.
Two years ago, a male employee left pornographic material up on a computer screen overnight, offending a woman colleague when she walked in the next morning. Calhoun met with the two employees and resolved the problem without firing anyone or stirring up a harassment lawsuit. Still, the incident was a wake-up call, he says. Without his 15 employees' knowledge, he installed RuleSpace this week. "I have people working at different hours at different times of the day," says Calhoun . "This is a way, if they are abusing their privileges, I can find out without standing there and looking over their shoulders." He adds that he plans to tell his employees about the new monitoring practice at an upcoming staff meeting.

Ironically, when asked about privacy concerns and his products, one top executive at Trexar said he didn't want Business Week Online to name or quote him, citing a desire to protect his own privacy. Lance Deutsche, the company's marketing director, says the software isn't really about spying on anyone. "OfficeBoard is simply an up-to-date way to determine where your colleagues are. It is like a chessboard where all the pieces defend and support each other," he says.

Ronnie Franklin, president of Internet Texas, a Granbury (Tex.) Internet service provider with six employees and revenues under $2 million, says he uses OfficeBoard in place of a secretary. Since he's on the road a lot, he dials into the Internet to see where his employees are and find out who has called in. Franklin doesn't believe in snooping on his employees: "I am a Christian-based company. We don't just hire anybody, and I know what their beliefs are and what their capabilities are." That said, he adds: "A company should be able to know where its employees are."

You may not have such bedrock confidence in your employees' moral fiber. But one thing's for sure, an atmosphere of suspicion is rarely conducive to good work. If you must monitor employees' computer use, tell them why and how, in writing. And make sure it's justified. Or you may do your work environment more harm than good.

By Jeremy Quittner in New York
jeremy_quittner@businessweek.com


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