The Effect of Computer Monitoring on Employees’ Productivity in Telecommuting Arrangements

Abstract

When employees work from home, organizations have traditionally placed a stronger reliance on output-based controls because of the inability to physically observe its employees. Because of recent advances in technology, however, many organizations now use input-based controls. One such input-based control is computer monitoring, which records the number of hours spent working and leaves out any time in which an employee does not perform work activities. On the one hand, computer monitoring may provide productivity-enhancing benefits by reducing the likelihood of employees experiencing self-control problems, such as procrastination. On the other hand, computer monitoring may motivate reduced effort by decreasing employees’ autonomy, which a prior study finds is an important mediator of the relation between telecommuting and productivity. We take advantage of a field-research setting in which the organization adopts computer monitoring for its telecommuting employees. We find that computer monitoring leads to a 7.1% productivity increase for telecommuting employees. We also find that computer monitoring reduces employees’ procrastination tendencies. In addition, we find that low performers’ productivity increases more following the introduction of computer monitoring. Finally, we find evidence that telecommuters’ departure rates increase significantly following computer monitoring. Our results suggest that technology can play a significant role in expanding organizations’ management control choices when achieving controls in telecommuting arrangements. This paper was accepted by Suraj Srinivasan, accounting. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.00588 .