In Praise of Monitoring Employees

The real shock was how much overall performance improved. Weekly revenue increased on average by $2,975, or 7% of total revenue.

By Andrew McAfee
Massachusetts Institute of Technology

The companies we studied were restaurant chains. We got to observe what happened at 392 locations across five chains (all of them sit-down places like Applebee’s or Chili’s, although neither of these were part of the research) before and after they started monitoring employees.

The misbehavior was theft: servers, bartenders and managers stealing money. This is a big problem…..By one estimate, $200 billion each year is lost in the industry due to stealing.

What happened once (monitoring) was in place? The real shock was how much overall performance improved. Weekly revenue increased on average by $2,975, or 7% of total revenue. Almost $1,000 of this increase came from drinks, where margins are highest and theft is most common.

As far as we can tell, performance improved simply because people started doing their jobs better. To oversimplify a bit, once the bad actors saw that theft was closed off to them as an option they realized that their best way for them to take home more money was to hustle more, take better care of customers, and generally be a better restaurant employee. And I imagine that once some people started acting that way the rest of the staff joined in; good behavior is contagious, just as misbehavior is.

The strongest piece of evidence we have for this explanation is the fact that tip percentage went up significantly after monitoring employees was in place. It’s hard to see how this would happen if employees got surly or disgruntled about the increased monitoring. Instead, it looks like they started doing the right thing by their employers and their customers. Isn’t that a story we can all applaud?

From Harvard Business Review | Read the article