Is Digital Monitoring" a Revolution for Employee's Mental Well-being? A Case on H.D.F.C Bank

Harsheen Kaur, Richa Raghuvanshi and Anita Singh

It was a typical hot and humid summer afternoon of Bahraich, Uttar Pradesh, India when Anurag Mishra, the branch manager of H.D.F.C Bank was relaxing in his cabin, his eyes stuck at the monitor when he received sudden resignation emails of few employees. Mishra was an M.B.A graduate with a keen interest in the banking industry, initially worked at another private bank. However, due to concerns about the work environment and culture, he transitioned to H.D.F.C Bank. He eventually rose to the position of branch manager in Bahraich, where he currently oversees a team of approximately 15 employees. The H.D.F.C bank had recently used the surveillance function to monitor the routine working of employees in efficient and effective manner.

On April 23, 2023, Mishra expressed deep concern over recent employee resignations, highlighting a growing issue within the branch of H.D.F.C Bank in Bahraiq district. He elaborated how constant monitoring has negatively impacted employees' mental health and fostered trust issues between management and staff. The privacy concerns related to monitoring and mental well-being of bank employees in the branch office through the involvement of monitoring tools at the workplace. He was conscious that in time, other banking competitors would potentially be able to replicate H.D.F.C's service offering and could attract the employees of the branch, he was perplexed and confronted with the dilemma first how to retain the employees' and second how to use the monitoring activities in such a way that it could not hamper the competitive advantage of H.D.F.C bank.

A Profile Study on H.D.F.C Bank

H.D.F.C Bank Limited (Housing Development Finance Corporation) was incorporated in August 1994 with its registered office in Mumbai, India. H.D.F.C Bank commenced operations as a scheduled commercial bank in January 1995. H.D.F.C was among the first to receive an “in principle ” approval from the Reserve Bank of India R.B.I to set up a bank in the private sector. The bank at present has an enviable network of over 4,805 branches spread over cities across India. H.D.F.C Bank, had grown to be a major player in India's private banking sector. With over 6,300 branches and around 18,000 A.T.M's in over 3,000 cities and towns, the bank had developed a vast presence. This extensive reach, combined with a strong digital platform – including net banking and mobile banking – had allowed H.D.F.C Bank to serve a wide variety of clients with an array of financial and banking services, both for individual consumers and businesses.

H.D.F.C Bank's strategy had been rooted in five core values: operational excellence, customer focus, product leadership, people and sustainability. These values had driven the bank's approach to delivering a comprehensive range of services. The bank's commitment to excellence and customer focus had ensured that it consistently prioritized client needs. This dedication had been a key to its long-term success, ensuring customer satisfaction and loyalty over the years.

Harsheen Kaur is based at Amity Business School, Amity University – Lucknow Campus, Lucknow, India. Richa Raghuvanshi is based at Amity Business School, Amity University, Noida, India. Anita Singh is based at the Department of Management, Sharda University, Greater Noida, India.

Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessful managerial decision-making. The authors may have disguised names; financial and other recognizable information to protect confidentiality.

In lining up with modern banking system

Banking services and operational procedures were changing rapidly as a result of modernization. Modern banking system (M.B.S) was a sort of banking that was partly or fully based on computers and technology. Technology was supposed to be the key driver of change in the banking business. It resulted in a fundamental transformation in how banks conducted business.

It not only assisted them in improving internal processes but also enabled them to give better customer services. Several studies had been conducted to examine the global evolution of mobile banking services and analyze various electronic delivery channels such as A.T.M's, telephone banking, mobile banking, S.M.S banking, computer-controlled banking through branches and online banking. Although these studies discovered that contemporary banking created new opportunities, they also revealed a number of important technological, psychological and behavioral challenges that hampered M.B.S's. These issues needed to be addressed in terms of processes, systems and human interfaces.

Since 2016, the Indian banking sector had undergone a major transformation in its appearance, landscape, interior furniture, equipment, staff uniforms, signs, communication systems and other visible features of its operations. Banking services expanded both physically and virtually, gaining recognition in recent years. A bank's efficiency was evaluated by how well it could supply services to its target clients using new technologies and modern practices.

Traditional banking models and practices had become confined to limited spaces in today's banking system. Unfortunately, conventional practices remained associated with the M.B.S in public sector banks, despite their importance for effective banking in today's economy.

Traditional practices persisted in processes, procedures, systems and human factors, often rendering service delivery an inferior experience compared to M.B.S. All components of employee-customer interaction in service delivery were referred to as the human factor, which played a significant role in shaping overall customer perception of banking services. Public sector bank branches were frequently designed as transaction centers rather than spaces that provided a positive and memorable customer experience, making it challenging to maintain existing customers and attract new ones.

According to Ginger's research, during the beginning of COVID-19 pandemic, approximately 60% of employees stated that workplace stress had pushed them to tears, which increased by 23% since 2019. Workers surveyed after the onset of COVID-19 reported significantly higher stress levels: 88% reported moderate to extreme stress, 69% claimed this was the most stressful time of their professional career, 91% of employees working from home reported moderate to extreme stress and 43% had become physically ill as a result of work-related stress.

Unexplored facets of electronic monitoring

The genesis of the word “electronic monitoring” or “supervision” dates back in the year 1966, when Ralph Schwitzgebel described a method for telemetric tracking of offenders in the community. A slight variation of this method was attempted in 1968 to track the movement of people wearing electronic gadgets across a facility and was tested on parolees, mental health patients and study participants. The strategy advanced to greater extent in the early 1980s, following the creation of the “electronic bracelet”.

Applications for information and communication technology in the workplace are numerous and have become more prevalent, particularly after the COVID-19 pandemic since 2019, in the area of employee electronic performance monitoring. Electronic monitoring has been playing a significant role in people's life, motivating them to enhance their productivity. As a result, it was helpful for individuals to complete their jobs on time; but continuous monitoring had a psychological impact on well-being of employees. Though, electronic monitoring has numerous advantages, but technology has its own ramifications.

Individuals faced cognitive health concerns as a result of technology; they found it difficult to resist technology. Electronic monitoring has been a critical feature in business organizations and had taken various forms over the years, including direct supervision by superiors, keeping records of work, documents about employees' work lives, and the use of schedules and work plans; recently, in modern organizations, information or computer technologies were used to monitor work performance.

Sharmila & Poornima (2011) pointed that employees belonging to the banking sector were facing substantial psychological problems. Psychological effects like stress, anxiety, depression and sleeping disorders were commonly found in employees working in the banking sector while they also revealed the effects of job stress on employee performance. The inability of the employee to meet the job demands causes psychological effects like stress, pressure and depression which in turn lead to decreased productivity, increased absenteeism and higher turnover rates.

They further emphasized that employees in the banking sector were especially vulnerable to stress and anxiety, noting that these psychological issues could be significantly alleviated through effective management measures. Moreover, monitoring information had the potential to assist managers in communicating the required performance standards, as well as the desired commitment, citizenship behaviors and organizational values. Ravid et al. (2022) noted that there was a shortfall in academic studies of new types of employee monitoring practices. They speculate that these transformations pose ethical challenges as well as changes to social relations in the workplace.

According to the employees, increased surveillance raises the psychosocial risks of increased privacy invasiveness, procedural unfairness, low trust and low transparency perceptions. Furthermore, if the purpose of monitoring is unclear and not governed by an effective policy, these types of surveillance risk being perceived as excessive. Recent press coverage and industry reports which concern workplace surveillance hint at the extension of workplace surveillance, and its consequences, in practice. For example, in 2019, a report by Gartner found that 50% of the 239 large corporations they surveyed were already using some type of “non-traditional employee tracking” technique, which was expected to rise in 2020. By “non-traditional”, Gartner means “analyzing the text of emails and social-media messages, scrutinizing who's meeting with whom, gathering biometric data and understanding how employees are utilizing their workspace”.

According to Pennington et al. (2022), workers, especially women, had experienced stress and conflict due to the increased use of texting, video conferencing and email. In light of these concerns about how the pandemic had impacted the future of work, it exacerbated power disparities and inequality while hampering employee privacy and well-being. Additionally, the normalization of technologically driven workplace monitoring not only affected employee privacy but also intensified power imbalances in the workplace. For instance, the effects of working from home were clearly different; in dual-income households, the pandemic disproportionately increased the amount of unpaid labor that women had to undertake.

Instances of mental issues

In recent era, the instances of mental health issues had been rising significantly, impacting all sectors. The mental health of individuals was considered an important aspect of employee productivity. Constant monitoring within organizations affected employees' well-being in various ways, such as decreased motivation, privacy concerns and disengagement from assigned tasks, which in turn reduced individual efficiency.

Employers had monitored employees to increase profitability and productivity, but overmonitoring had led to trust issues between employees and management. The surveillance tools used in the system had impacted employees' work-life balance, causing issues like anxiety, stress and difficulties in maintaining self-control over work-related activities.

Well-being: a positive approach for employees

Ruggeri et al. (2020) viewed well-being as having a positive outlook on life and feeling satisfied. It was a favorable outcome for individuals and many sectors of society demonstrated that people had a positive attitude towards their life. The broad focus of well-being included assessments of life satisfaction and feelings ranging from happiness to discontent. Researchers from different fields looked at a variety of topics, including expansion and training, social and economic well-being, physical well-being, emotional and psychological well-being, life satisfaction, domain-specific satisfaction, engaging activities and employment.

However, banking had come a long way in enhancing the customer experience, transitioning from the traditional culture of using pen and paper to introducing groundbreaking technology. While employees' skills had improved, their workload had increased. Bankers increasingly found themselves working long and often stressful hours, toggling between digital screens on one side of their workstations while simultaneously sitting across the table from clients who came into the branch for assistance.

Queries confronted

With the alarming technological advancement in the banking sector, there was a need to implement surveillance and monitoring to address the issue of employees' productivity in an efficient manner. Mishra, an M.B.A graduate, was keen towards building his career in the banking industry, erstwhile he was working with another private bank due to work environment and culture he switched to H.D.F.C bank and finally became the branch manager of H.D.F.C in Bahrain, currently managing around 15 employees under him.

He was concerned about the well-being of banking employees due to constant monitoring done in the banking sector. The major issues pertaining were related to unawareness of employees with the process related to the electronic monitoring and somewhere it was a matter of fear among employees that they might lose their job if they would not be able to be accustomed themselves with emerging concepts of electronic monitoring in the branch. H.D.F.C was first such bank that came up with the advance monitoring tools which includes e-mail tracking, audio/video surveillance, G.P.S tracking and other monitoring ways which affected the employees' privacy and mental well-being.

The relationship between the employer and employee was somewhere questioned due to monitoring tools prevailing in the branch. Moreover, the applications which were made installed in the smart phones of employees are affecting their privacy and well-being.

Employees' snippet regarding monitoring challenges

Sunil who works in Axis bank told movement sensors were installed in the bank. He added, G.P.S and mobile tracking is also been used with the I.P address tracking. At the same time, some applications had been installed in employees' mobile phones and tracking is done during the usage of application. He further stated, two levels of monitoring are done first at branch head level monitoring in which audio/video surveillance, biometrics and email tracking is done, and second, at cluster head level monitoring involves G.P.S tracking. surprise audit and wearable tracking is done. Durgesh who was working with H.D.F.C bank since past 8 years informed that there are some clauses in the bank which are not in favor of employees; one of them is they can terminate any time they want, if any financial or reputation loss occurs due to employees' negligence during the process of monitoring without confirming them.

Electronic monitoring in different private banks

Ravi, who had worked for both H.D.F.C and I.C.I.C.I banks, shared that email tracking is handled by the back-end team. H.D.F.C and I.C.I.C.I both are more active than other private banks. Employees at I.C.I.C.I Bank had given positive feedback on monitoring due to its flexible policies and tools.

The bank also offered employee training and wellness programs to ensure their well-being. I.C.I.C.I Bank provided flexible working hours with no extra work demands, while H.D.F.C Bank maintained rigid schedules and required employees to work additional hours. I.C.I.C.I also allowed for free working arrangements to cover more market space, and monitoring varied by department. This flexibility was a major reason for Ravi's decision to switch his job to I.C.I.C.I.

Turning Point: Initiatives by H.D.F.C Banks to Address the Employees' Well-being Issue

■ H.D.F.C Bank Cares was a carefully constructed framework that highlighted the bank's commitment to supporting their employees and family members financially, physically and emotionally. Employees were advised and motivated to embrace a healthy lifestyle connected with Apollo Healthcare as part of physical well-being activities. As financial security, the bank provided loans at attractive reduced rates to employees based on their performances. H.D.F.C provided a positive work atmosphere and opportunity for employees to participate in the organization's success. "In one of the industry's most innovative initiatives of 2019, the bank has designed training programs for employees nearing retirement as well as their spouses. The goal is to make the departing staff financially, physically, and emotionally secure."

■ Modernized technology equipped by H.D.F.C – Technology had always been an important focus for H.D.F.C, and it was the first company to computerize the home loan process. H.D.F.C Bank operated in a highly automated environment supported by information and communication systems. Customers were able to transfer funds promptly as all branches were online. Retail consumers could also access various branches through the branch network and A.T.M's. The corporate banking business was backed by FlexCube, while the retail banking business relied on Finware, both from I-Flex Solutions Ltd. The decision was made to adopt open, scalable and Web-enabled solutions. H.D.F.C Bank targeted its involvement in technology and the internet as one of its primaries aims and had already achieved substantial progress in Web-enabling its core businesses.

The employer's right to know

Courts and adjudicators had recognized employers' legitimate interest in workplace monitoring whether for productivity or security reasons, employers could protect their economic interests by monitoring various aspects of the workplace. They might also conduct monitoring to safeguard against potential legal liability. While the employer's right to be informed about workplace activities had been established, courts and administrative tribunals-imposed restrictions on this right.

The employee's right to privacy

Employees had limited privacy rights in the workplace. This right derived from various sources, including collective bargaining agreements and negotiations. Courts provided varying interpretations of the limitations on the scope of this privacy right based on the type of surveillance used by the employer and the circumstances surrounding it. Factors included the grounds on which the employer decided to implement surveillance and the employees' reasonable expectations in each case.

Why monitoring? The perspective of Mishra

Companies had valid reasons to monitor their employees on the job. Employers stated that it was their responsibility to provide a safe and secure workplace. They could ensure that e-mail could aid in the filtration of any harmful information through the use of monitoring. Furthermore, it protected firm's sensitive information and prevented business secrets from leaking.

Employees, on the other hand, believed that their employers' constant monitoring infringed their privacy rights. Due to the extensive usage of e-mail and the Internet in the office, employees commonly used e-mail to connect with co-workers. They may inadvertently send out inappropriate message to the entire company, making other employees felt uneasy or intimidated. Due to the legal requirements and criminal activities taking place on regular basis, employers monitored employees' e-mails to ensure that the workplace was free of any ideas that may disturb other employees.

Furthermore, companies were held accountable for their employees' activities in the workplace. It made no difference whether the action was done with or without the employer's knowledge or agreement. Employees, on the other hand, argued that technological surveillance in the workplace breached their right to privacy. They contended that surveillance breached their fundamental human dignity, resulting in a decrease in workplace protection. Although employees had the right to privacy while at work, companies still monitor employees to preserve the company's general welfare and to ensure a safe and neutral working environment.

Employers believed that the rights of the firm continued to erode the rights of employees.

Mishra raised a valid concern about the balance between monitoring for security and employee well-being. He noted that while different banks had varied policies on monitoring, there was a general belief among employees that there should be limitations to protect their privacy. The increased monitoring in the banking sector, driven by security needs, could unintentionally affect employees' well-being. Despite being required to adhere to these monitoring practices as directed by higher-ups, Mishra advocated for clearer guidelines to ensure that employees felt comfortable and that their privacy was respected.

Mishra, was of view that.

Many employees who worked from home used typical electronic monitoring tools. The I.O.T's (Internet of Things) had provided companies a cause to monitor their employees' behavior and actions at work. It also made it easier for businesses to monitor their staff by utilizing cutting-edge technologies and applications. Furthermore, management raised many ethical issues regarding electronic monitoring and intrusion into employees' legal privacy issues.

Employees' perspective towards monitoring

Close supervision had a substantial impact on the well-being of individuals, digital monitoring tools such as audio video surveillance, data entry, chat and phone recording effects the job quality of employee, according to previous researchers, electronic performance monitoring was more detrimental to job satisfaction when used for punishment. Prashant an employee of the branch stated; monitoring had stronger negative correlations when it was ongoing or assessed at the group level. Moreover, individual performance was harmed as a result of this computerized monitoring and evaluation. Another employee Junaid mentioned, “surveillance can also affect an individual's mental health and reduces the creative abilities of an individual.” Navneet added, “surveillance helps to increase the productivity of an individual but at the same time it also affects the privacy of an employee.” Manohar further added; “at the time of our official hours, we were asked to provide live location if any employee is on field work.”

The complexities

- Stress – Employees were of opinion that increased electronic monitoring tends to increase the stress; it often makes them feel anxious, depressed and annoyed. Moreover, they also revealed due to monitoring, they also feel exhausted.

- Productivity – Employers stated that their employees used devices for non-work-related activities and misused electronic gadgets in the workplace, which resulted in reduced productivity. Employers use monitoring systems to avoid a decline in productivity. Managers can provide vital feedback on employees' performance by monitoring individuals.

- Employees' attitude – Managers believed they could fairly evaluate employees' performance because monitoring provided employers with a complete picture of hardworking and non-productive employees, their efforts on the job directly reflected on performance appraisals and employees became more committed to their organization. Monitoring could create discomfort between management and employees.

- Privacy – Employee privacy may suffer if employers used electronic surveillance tools to control or manage employees. When it came to employee monitoring, there should be certain guidelines to be followed.

- Modern banking system with traditional practices – Bank's digital banking strategy, achieves enhanced efficiency, improve customer experience and attracted a new segment of digital-savvy customers. The emergence of digital banks was a natural byproduct of the world's digitalization. Smartphones had become an essential component of daily life. It was hardly surprising that many people had stopped visiting branch banks. Bank customers had transformed into mobile users accustomed to managing their money through screen taps. In a rapidly evolving digital environment, neo-banks were expanding quickly.

The conundrum

The digital shift at H.D.F.C had anticipated growth for the organization. However, the success of any enterprise depended on the satisfaction of its employees. The issues related to digital monitoring and surveillance posed significant hindrances to the mental well-being of employees. Mishra faced the challenge of deciding how to navigate this journey of perseverance while ensuring that everyone was included.

Notes

1. A district in state of Uttar Pradesh, India.

2. A metropolitan city in India.

3. The Reserve Bank of India (RBI) issues an in-principal approval for setting up a bank, payment aggregator, providing home loans, etc.

4. A type of electronic device that is fastened to keep track for the ones who have committed any crime.

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