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Opinions expressed by Entrepreneur contributors are their own.
Maximizing productivity should always be a top priority for business owners, but trying too hard to micromanage every inch of your operations can actually do the opposite.
Systems within a business have to exist to ensure it functions smoothly — from having a daily structure to setting meeting agendas, establishing company values and setting hiring criteria — without them, enterprises can implode.
Time tracking is a prime example of a system employers use to improve staff productivity by increasing self-awareness, encouraging accountability, minimizing time wastage and maximizing profit.
The growing demand for time-tracking software, resulting from the rise of remote work, could put the market for this technology at an estimated value of $31.88 billion by 2028.
But it's not all positive. While time tracking may seem like a smart business move, it certainly has its downsides if not used carefully.
Trust is everything
What separates good leaders from great leaders is their ability to offer guidance, resources and support to their team. At the same time, they need to allow employees the space to manage themselves.
A healthy working relationship between employer and employee relies heavily on having a strong sense of mutual trust and a relatively balanced power dynamic. Time tracking to monitor staff input and output can blur the lines if clear expectations aren't set.
Asking staff to record every minute of their working day can leave employees feeling unnecessary pressure and as if they aren't trusted to do their jobs. When employees don't feel trusted, trust has the potential to be broken both ways.
Chaining people to their desks
Over the past few years, the importance of having a healthy work-life balance has been stressed more than ever. The fact is, people work better when they have time for things that don't revolve entirely around work.
As a manager, being too nit-picky about the hours an employee logs in their time tracker each day can cause real problems.
Staff are humans, not machines — they need toilet breaks, coffee runs, time off for personal appointments and an early finish every now and then.
Time tracking often ignores these crucial elements of a working schedule. It can even cause employers to penalize staff for not spending a certain amount of "profitable" hours at their desks. The bottom line is this is completely unrealistic.
Related: The Importance of Striking the Right Work-Life Balance
Privacy concerns: Is it unethical?
Then, there are the big concerns around surveillance.
Not only can there be legal requirements for monitoring staff productivity, but the morality of following a person's every move must also be questioned.
People come to work to do their jobs, make money to live and reap the rewards of their efforts during their downtime. What they don't want is to feel like they are constantly being watched or waiting to be criticized for not working hard enough.
Excessive supervision can be a huge demotivator for employees. It can cause them to question what other activities are being monitored themselves, which can lead to serious conflict.
Tricking the system
When employers are too strict about how their staff uses time-tracking software, it leaves room for deception. This is even more true with the increase in people working from home.
If you are not sitting in the office and physically monitoring what employees are doing, there is no way to tell if they are actually doing the work. Your marketing manager could have their time tracker running on a client job while lounging on a beach in an entirely different country. You could be none the wiser.
This is where it comes back to the trust factor. If employees feel too constricted by the pressure to make every second of work count, they might be more inclined to cut corners.
Don't overcomplicate success
There is a common misconception that tracking your employees' every move will allow you to determine exactly how much value they add to your business.
However, the reality is that there is no way to 100% accurately measure a business's success with this software. The key thing to remember here is that there is a distinct difference between productive and profitable.
Take staff meetings, for example. They might not generate income directly, but they are necessary to keep your team up to date, moving in the right direction and on the same page. Without "non-billable" activities like these, a business can't function effectively. The same goes for client prospecting or networking – the success of these interactions is too complex for time-tracking software to measure.
Related: Defining Success: 4 Key Measurements That Go Beyond Revenue
Food for thought
While I am in no way suggesting business owners rule out time-tracking software completely, as you can see, there is a lot to consider.
If you choose to use these systems in your workplace, it's paramount that you find a way to use them that doesn't restrict your team's ability to do their job — or backfire.
Transparency is everything. Let your staff know exactly how time tracking will be implemented and monitored from the start, and allow them to raise any concerns they may have. It's also a must to regularly review what is and isn't working.
And if you think time tracking isn't the right fit for your business, there are plenty of other, more traditional ways to measure its success without it.
