It's not a question of whether it's within legal limits or not, it's a question of is it a smart business descision.
People don't like being spied on in our culture. It goes against our illusion (or dellusion if you prefer) of individuality. The person might be perfectly within their rights doing this sort of thing, but it doesn't mean it won't have a rather nasty negative impact on the performance of the employees they manage. Which reflects poorly on them come contract review time.
Not to mention it's quite probably a completely unnecessary expense. They could spend a few hundred dollars on some monitoring software, and then spend even more time monitoring people... Or they could do something a good manager should be doing in the first place, and trying to keep a dialogue going between employer and employee. Odds are real good that will resolve the problem, with only the small expense of a little lost productivity (which will probably be more than made up for if it improves morale) that would have been lost no matter which of the two options was chosen.
So, again, the question here isn't so much is monitoring of employees legal, because it is... It's a matter of my trying to help this person see that there are better alternatives. Alternatives that, at the very least, won't negatively impact the business, and could quite possibly even have a positive impact on things.
They seem counter-intuitive to contemporary managerial philosophies, because I go about things from the other direction. I look at humanity as an advantage, not a liability like is the current school of thought. Long, long ago I was a trainer at a McDonalds. I made my trainees think, I didn't just stand there telling them exactly what to do. They didn't like it, because they're not used to someone treating them as a human being that's capable of independent rational thought, but the people I trained were some of the best people we had on those jobs. And this is a McDonalds we're talking about, which usually isn't hiring the world's brain trust. So, if I can get results like that from what might be considered the bottom of the intellectual barrel, imagine what could be gotten from people capable of getting 4 year degrees or even graduate degrees.
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