Keep an Eye on Your Employees, But Not Two: An Experimental Study of Online Monitoring, Performance, and Effort

Abstract

Since the onset of the COVID-19 pandemic, the world has seen a dramatic increase in the prevalence of remote work, with far-reaching financial, economic, social, and environmental consequences. This has also resulted in an unprecedented expansion of the use of digital monitoring tools by employers who wish to make sure that their remotely employed workers remain productive. In this study, we create an experimental setting resembling a remote work environment, and randomly assign participants to four groups, simulating different levels of digital monitoring. We find that while the presence of monitoring both increases participants’ effort and improves their performance, a higher level of monitoring beyond the bare minimum does not. These findings have broad ramifications for both policymakers and employers looking for optimal incentives for remote workers.