No matter where they sit, employees at DeskTime have a grand view. Full-length windows at the company’s headquarters give a panoramic vista of downtown Riga, Latvia, about 5 miles away.

The ability to see at a distance is a metaphor for DeskTime, whose time-tracking software gives companies a window into employee productivity. DeskTime represents a new twist on conventional time-and-attendance software used for administrative and pay purposes.

DeskTime’s automated software collects and updates information in real time, such as the number of employees at work, how many are absent or outside the office—even who appears to be slacking off.

More important, it offers a measurement of productivity by sorting a company’s commonly used applications into three broad categories—productive, distracting and neutral—and monitors which employees access them and for how long. The resulting data are presented in graphs and charts in a dashboard format that is visible to managers and every employee.

DeskTime’s software collects fine-grained data, too, such as the time an employee clocks in or out, the percentage of time spent on productive tasks, and the period of time during the workday when the employee is most productive.

The system eliminates manual entry of time-and-attendance data. “You set it up once and don’t have to touch it ever again,” says the company’s CEO, Julia Gifford.

Software to track employee hours, provided by big vendors such as Kronos Inc. and Oracle Corp., has been around for years. Closely related are vendors of keystroke-monitoring software, which typically includes a surveillance feature to ensure employees don’t break company rules on Internet use.

Crowded Field

But DeskTime is part of a new breed of human resources vendors whose applications focus more on productivity than compliance. Among DeskTime’s rivals in this category are New York-based Harvest; TSheets of Eagle, Idaho; Seattle-based RescueTime; and Toggl, a startup based in Estonia, in Eastern Europe.

The potential to monitor employees minute by minute conjures up Big Brother, but DeskTime wasn’t designed for snooping, Gifford says.

“We encourage clients to leverage the information in a way that motivates employees to boost their performance and productivity. They need to be transparent and let employees know why the software is being used and the type of data it is collecting,” Gifford says.

Some customers have asked about more invasive features, such as screen captures and keystrokes, “but we’re just not comfortable with that.”

Companies have reason for concern over how employees use their time. Between 60 percent and 80 percent of workers spend time “cyberloafing” on the job, despite company policies that forbid it. So says a study to be published in May in Computers in Human Behavior, an academic journal.

The goldbricking results in lost productivity and exposes companies to potential legal risks, according to the report by associate business professors Joseph Ugrin at Kansas State University and John Pearson at Southern Illinois University.

The professors’ findings echo a survey of 3,200 workers last year by Salary.com. It reported that nearly two-thirds of employees acknowledge visiting nonwork-related websites each workday.

On the flip side, measuring productivity is an inexact science, especially in the case of knowledge workers. Rather than spending time in a productivity application, an employee might reflect on improved product features or a clever marketing campaign—work that won’t be captured merely by reading a graph.

The trick is to use these tools in ways that benefit employees, says Mary Ann Masarech, a lead consultant with BlessingWhite Inc. “Time-tracking tools can support engagement if they actually help people in their jobs,” such as enabling a project manager to track margins or assess if the time spent on the project is worth it.

“If the tool is only used as a policing device, then it can become a business practice that undermines engagement,” Masarech says.

There are situations in which employers are limited in their ability to monitor employees or prohibited from doing so altogether. Union contracts, for example, may restrict an employer’s monitoring while public-sector employees may have limited exemptions under the Fourth Amendment, according to Privacy Rights Clearinghouse, a consumer advocacy group based in California.

Growth at DeskTime

None of that really came into play when the idea behind DeskTime was first conceived, Gifford says. Before it was marketed as DeskTime, the software was used internally to track employees’ time and attendance at Draugiem Group, a business incubator and creator of a Latvian social network. Draugiem has launched more than 15 startups in Latvia, including DeskTime in 2011.

Draugiem Group has expanded rapidly to more than 100 employees, making it difficult for its makeshift human resources function to keep pace. “We realized at Draugiem that if we were having trouble keeping track of employees’ time, then other companies probably were having the same problem,” Gifford says.

DeskTime developers later added functions to enable companies to do more than capture data on time and attendance, Gifford says. The company, headquartered in Riga with U.S. operations in Santa Monica, California, says its software has been licensed to about 90 companies globally, encompassing 12,000 users.

Among the customers is Fueled, a New York-based company that builds interactive mobile Web applications. It uses DeskTime’s reporting feature to generate a daily productivity report that gets emailed to employees.

The purpose is to get employees to compete to be the most productive, says Rameet Chawla Fueled’s founder and CEO. “It lets the entire team see who is working most productively. It’s more of a higher level thing to increase our overall production.”

About the Author:

Garry Kranz is a Workforce contributing editor. Reprinted from Workforce