When news surfaced in December that Fidelity Investments had fired four employees for playing fantasy football on company computers, it fueled considerable discussion in the blogosphere and at water coolers across the country.

After all, most businesses find there are two real productivity-draining seasons. And just when your employees can put the distractions of NFL fantasy football behind them, here comes the second. The NCAA March Madness basketball tournament, a tremendous time suck that eats away at both productivity and bandwidth as employees access scores and live streaming games, is just weeks away.

The Internet might be an essential business tool, but there's little question access to an almost infinite stream of information, videos, shopping, and social networking hampers your employees' ability to do their jobs and your ability to do business efficiently. But should you monitor or control your employees' online time?

The case for employee monitoring

When SpectorSoft Corp. surveyed nearly 300 customers who use its Spector 360 monitoring software last year, 89 percent of the businesses said they discovered employees were wasting time or abusing Internet use. Half of the companies said employees were using too much bandwidth, and almost half found employees downloading illegal or inappropriate material such as pornography and pirated music.

Larry Lambeth, president of Employment Screening Services, Inc., in Spokane, Wash., says he learned a lot about employee behavior when his company installed monitoring software. Even though he gave his employees a 30-day notice before the monitoring began, Lambeth still discovered employees were spending up to half of their work days surfing the Web. "We sent them all a report on their usage, and it immediately went down to nothing," Lambeth says. "They were amazed at what we knew."

What monitoring can tell you

It's possible these days to build a detailed sketch of how your employees are spending their time, including every keystroke they make, every website they visit, every video they download, and just how they spend every minute online.

eTelemetry's Metron appliance starts at under $3,000 and takes less than an hour to install on your network, says eTelemetry CEO Ermis Sfakiyanudis. "For a business with over 20 or so people, that's not a huge expense,' he says.

eTelemetry enables a business to produce a report on an employee that includes, among other options:

• The top 10 sites visited from a time standpoint.
• The top 10 sites visited rated for bandwidth usage.
• A historic record of when and where an employee is surfing.

How to use information effectively

It makes sense to have an Internet usage policy in place and to decide how you'll monitor and enforce it. But be flexible enough to adjust to the information you receive from monitoring reports, advises Sfakiyanudis.

"Let everyone know you're going to do it, deploy the system, and monitor it for a few weeks,' he says. "If you're seeing a lot of abuse, maybe it's something you need to educate your employees on.

"One customer rewrote their entire Internet usage policy after monitoring for a month."

The customer found its policy prohibiting online shopping didn't make sense, given the long hours employees were working and their lack of time to fit in personal needs. However, the company also noted the number of employees leaving streaming radio and similar bandwidth hogs running overnight, so a strict policy about shutting down systems was instituted.

"Monitoring employee Internet use must be solved with both technology and policy,' says Dave Sobel, CEO of Evolve Technologies, which offers monitoring solutions to small businesses.

Among the actions you might take are:

• Restricting access to sites or limiting access to certain times of the day, such as lunch.
• Restricting access on an individual basis.
• Issuing regular reports, thus encouraging employees to curb usage on their own.
• Limiting access to bandwidth by either individual or by site. "We offer a technology which can still provide access to websites that employers may want to restrict, but the bandwidth is so badly limited that it becomes practically useless,' says Sobel.

How to maintain morale

Bob Venero, the CEO of Future Tech Enterprise Inc., calls the installation of monitoring software a couple of years ago "the caging of employees and their innovation and creativity."

Utilizing Websense monitoring software, the company stopped employees from visiting certain sites, limited surfing time, and tracked and monitored all usage. But, inspired by a speech from W.L. Gore and Associates CEO Terri Kelly, Venero decided monitoring was stifling his employees. He told employees the monitoring was ending and asked them to hold each other accountable for the benefit of their company and their peers.

"We kept some of the tracking without reporting and found personal Internet usage has dropped more than 20 percent,' he says. "We used to have dabble time, a half hour during lunch. When we monitored, 82 percent of all employees utilized dabble time. We're down to 61 percent using that time now."
Communication is critical when it comes to monitoring, say the experts. Let employees know what your expectations are and what the consequences are for violating a usage policy. When it comes to issues like bandwidth usage, educate them on the effect their usage might have on company business.

Generally, experts recommend giving fair warning before you install monitoring software. At Minnesota State University-Mankato, information security manager Kevin Thompson only installs software after a supervisor has referred an employee to Human Resources for wasting time online or misusing the Internet. The employee isn't notified before the software is installed but usually has received a letter of expectations from HR, says Thompson. "Usually by the time it gets to me, this employee has been told over and over and hasn't stopped the activity."

Finally, provide some leeway. Venero runs NCAA basketball tournament scores on his company intranet. "The reality is people use the Internet to help streamline things in their lives, and you have to give a little bit,' says Sfakiyanudis. "Most companies don't want to block all the time."