For years insurers have endeavored to build up strong analytic capabilities to get a better sense of their customers. These efforts allowed them to augment their underwriting processes, marketing efforts and fraud detection. While a series of enterprise-class hardware and software advances are the primary catalysts of this effort, broad societal trends have also played a part.
Indeed, the age of too much information is a data-centric insurer's dream. With seemingly little compunction, people now publicly broadcast personal information that insurers once would have to spend considerable time and effort digging up, if they could access it at all. Newly robust social intelligence tools enable insurers to glean troves of actionable data directly from social networks. For example, that Facebook photo of an insured paragliding in paradise may be of keen interest to a workers' compensation case manager.
But what if insurers decided to train these formidable tools of discovery on another constituency-their own employees? No doubt, the technical challenge is minimal but the ethical question is profound. At first read, the thought of using advanced analytics on employees as a management tool strikes me as akin to using an elephant gun to hunt squirrels. It also comes across as more than a bit creepy, an atavistic practice worthy of an Eastern Bloc police state, not a modern capitalist enterprise.
Yet, one need not look far for ample evidence of employee misdeeds, even at the best-run companies. The private stock purchases made by departed Berkshire Hathaway Inc. executive David Sokol are just one example of when a company's inability or unwillingness to monitor private employee behavior led to a material business risk.
Diane Swanson, professor of management and chair of a business ethics education initiative at Kansas State University, says the practice of monitoring employees can be a double-edge sword. While companies have a duty to screen potential employees and monitor the social media activities of current employees to guard against improper disclosures of sensitive company data, where do companies set the boundary between what is germane and what is unnecessarily invasive and intrusive? Thus, the question is not whether to monitor employees, but to what degree. An insufficiently robust monitoring regime creates a bevy of risk management issues while an overbearing one creates a climate of fear and distrust ultimately detrimental to employee morale and productivity.
To help strike this balance, Swanson recommends that companies craft policies and provide expectations of employee's online conduct, and shift the emphasis from monitoring to creating a shared understanding between employers and employees.
"I understand the need of a business to protect its reputation," Swanson says. "But in terms of employees' rights, the practice coexists uneasily with the expectation of personal privacy."
