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By MIKE O'BRIEN, a staff writer for Human Resource Executive ®, a sister publication of Risk & Insurance®

If you ask Manuel Sauceda whether he thinks using video surveillance to monitor employees is a good idea for organizations, his response is simple: Seeing is believing.

"Before we had this software, we had a data-mining tool that indicated productivity [levels of cashiers] by showing their rates of voids, returns and other points of data as they were scanning items," he said. "It was a good tool for looking at transaction detail, but because we didn't have any video to corroborate it, the timing wasn't there and we couldn't tell what they might have been missing."

When the two monitoring systems were married last spring, Sauceda said, the experience was enlightening, to say the least. By synchronizing POS data with associated video provided by Camden, N.J.-based Agilence's Hawkeye system, the organization was better able to identify shrink activities that cut profit from a company's bottom line?such as theft or embezzlement?that the previous system may have overlooked. "Sweet-hearting," for example, is when a checker scans an item at a lower price for a friend.

A cashier scanning a product into an incorrect category during checkout can also be corrected with the help of video, he adds.

By the end of the year, the company's shrink numbers as a percentage of sales were at their all-time lowest levels.

"If you have the video, it does really open your eyes," Sauceda said.

It's no surprise that companies are exploring every opportunity to gain an edge in today's cut-throat business environment, including the use of technological advances such as video surveillance and e-mail monitoring of employees.

The use of such monitoring techniques has slowly been on the rise since the beginning of the millennium, when 12 percent of employers reported engaging in video recording of employee job performance, according to surveys done by the ePolicy Institute of Columbus, Ohio, and the New York-based American Management Association.

ePolicy Institute's most recent poll, done in 2007, shows 48 percent of responding companies use video monitoring to counter theft, violence and sabotage in the workplace, while 7 percent use it to track employees' on-the-job performance. ePolicy Institute Executive Director Nancy Flynn said she thinks both those figures will rise again when the next survey, planned for later this year, is completed.

"Just as smart phones and other mobile technology tools keep making it easier and less expensive for employees to communicate electronically, video surveillance and other forms of electronic monitoring keep getting less costly and more within the reach of employers, large and small," Flynn said, adding that industry acceptance of video surveillance will also play a big role.

"Within industries that have been early adopters of video surveillance, you're likely to see more widespread use of [such] tools," she said.

Also, increasing and justifiable concerns over security breaches, confidentiality breaches and stolen financial/customer/patient data will no doubt lead to increased video surveillance, she adds, "particularly among industries that are tightly regulated [such as financial services and healthcare] and legally obligated to protect [such] data from accidental exposure to third parties or intentional theft."

But with the increase in technology and its availability comes a host of legal and privacy issues related to employees?issues that must be effectively dealt with by HR leaders in order to prevent lawsuits and an ominous sense among employees that Big Brother is watching their every move.

Train, Not Fire

When asked if JONS Marketplace decided to institute the camera system in order to better document fireable offenses among the grocery chain's 1,250 employees, spread across stores in Orange, Ventura and Los Angeles counties, Saucedo gives an emphatic "no."

"We're not looking to fire people," Saucedo said. "It costs way too much money to hire people. We're looking to retain and train people and make sure they're doing the right thing."

Because the system works in nearly real-time, it allowed management to quickly retrain employees on proper procedures before their errors could even affect the company's bottom line.

Saucedo cites one particular training issue that the system helped rectify: when checkers incorrectly scan products that lack scan stickers.

"We [were] seeing checkers charge items to the wrong department [on the video]," he said. "They need to understand what items get scanned to what departments, and with the video, you can show them that they may have charged an item to the wrong department when it's clearly a produce item."

According to Saucedo, IT supports the system and his team members, in turn, "tell people how to use it," he said. "The HR and IT departments are really close. When [the loss-prevention department] encounters a situation on video, then HR is notified and [the former department] won't do anything unless HR agrees that the video" shows an employee caught doing something wrong, he adds.

In addition to being used as training tools, the cameras have also caught employees doing things for which they were eventually fired, including talking on cell phones while scanning items in the checkout lane and sweet-hearting friends, as described above.

Saucedo said the company also put bumper stickers on each of the cash registers' tills with a logo of the surveillance company to remind employees they're on camera and should act accordingly.

"We tell employees all the time, 'Hey, look, we are watching, we know what you're doing,' " Saucedo said.

Legal Liabilities

Currently, only two states?Delaware and Connecticut?require employers to notify workers when monitoring devices are being used in the workplace. That said, according to the results of the ePolicy/AMA survey in 2007, 78 percent of employers notify their workers when anti-theft video surveillance is being used and 89 percent notify them when performance-related video surveillance is being deployed.

State laws notwithstanding, organizations would do well to take heed of the legal cautionary tale that unfolded after St. Louis-based brewer Anheuser-Busch installed video cameras in an attempt to cut down on employee misconduct, said Chris Hoffman, an employment attorney and the managing partner of the San Diego office of employment law firm Fisher & Phillips. Hoffman, who was not directly involved in the case, said the story points to the fact that organizations need to know both the law in their states as well as any regulations regarding the use of video surveillance of unionized employees.

In 2005, the U.S. Court of Appeals for the District of Columbia Circuit upheld a finding that Anheuser-Busch Cos. Inc. committed an unfair labor practice when it installed hidden cameras in 1998 in one of its St. Louis sites before bargaining with the union, as required under federal labor laws.

For Hoffman, avoiding lawsuits begins with transparency.

"Don't make [video surveillance] a secret," Hoffman said. "The simple fact of publicizing ? that you're going to use video surveillance will deter employee impact. It goes [hand in hand] with thinking through the plan?to make sure it's legitimate and it's not viewed as something less than legit by employees."

According to the particulars of the case, the brewer fired five workers in 1998 after one of its secretly installed video cameras captured them smoking marijuana in an unofficial break area. The brewer argued that the cameras were a security issue and that employees should not have expected privacy in areas that were not officially sanctioned break areas.

In the past, the National Labor Relations Board has ruled that allowing video cameras in the workplace was a legal practice.

The board's only demand pertaining to the issue is that the company bargains with employee unions prior to installation.

Because the NLRB does not mandate disclosure of the location of the cameras, however, employees may not know exactly when they will be on camera. A spokesperson for the brewer declined to comment on the case or on whether Anheuser-Busch continues to monitor employees via video.

The Small Screen

Video-camera systems are often used to monitor organizations with thousands of employees, but Andy Abramson, CEO of Del Mar, Calif.-based communications company Comunicano, said he uses them at his 33-employee shop to remotely monitor the goings-on at the office while he's traveling for business or working from home.

"Companies need to be visually aware of what their people are doing and, in this day and age, the cameras help me to do that," he said.

Abramson also said he uses this type of system "to make sure people are at their desks, make sure their desks are clean so the next people coming in have a clean place to work, and I just want to make sure that things are being done and people are doing what they're supposed to be doing."

Rather than a surveillance system, Abramson views the technology more as a remote viewing tool.

"This way, if I have to reach someone and I don't see them [at their desk], I know to call them on their cell phone," he said.

"It's not so much an employee disciplinary process; it's my way of checking in and seeing who else is in," he adds.

While he acknowledges that some members of his team say they feel they are being watched, he also said that, in today's virtual business environment, you can't manage by simply walking around.

"This is a way of managing by walking around virtually," he said.

Regardless of the size of the organization, the ePolicy Institute's Flynn said employers can expect one result above all others when installing cameras.

"Employee resentment is No. 1," she said. "Employee training is the best way to alleviate resentment. Best practices call for HR to conduct formal training to explain to employees why the company is engaging in video surveillance, what departments are being monitored, exactly how monitoring works and how employees will benefit from monitoring."

Cliff Nelson, a partner with Atlanta-based employment and labor law firm Constangy, Brooks & Smith, said any video-monitoring system needs solid backing from its workers if it is to succeed.

"Without buy-in from the workforce, employees may soon resent having their activities monitored by an employer that begins to look more and more like Big Brother," he said.

Fisher & Phillips' Hoffman agrees, concluding that the Anheuser-Busch case highlights one simple truth.

"The worst-case employee reactions have been when it's hidden," he said. "[Employees] discover the blinking light [of the camera] and that's when they typically have the strongest reaction against the employer."

"The simple fact of providing open and notorious signing and acknowledgement [of the use of cameras]," he adds, "will greatly diminish their ability to cry foul later."

May 1, 2010

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