Business Ethics

Go to the Electronic Journal of Business Ethics and Organization Studies and find at least one article, which deals with ethical issues that have strategic significance to companies. We know that you have been introduced to ethical issues in your prior MBA courses. The emphasis here is on strategic decisions that companies make and their ethical implications. You should briefly summarize and submit 

EJBO Electronic Journal of Business Ethics and Organization Studies Vol. 18, No. 1 (2013)
Electronic Performance Monitoring in
Call Centers: An Ethical Decision Model
David Perkins 
Abstract
Ever since it emerged on a
widespread basis in the 1990s,
electronic performance monitoring
of employees has received
significant scrutiny in the literature. 
Call centers have been the focus
of many of these studies.  This
particular study addresses the
issue of electronic performance
monitoring in call centers from an
ethical perspective.  The following
ethical dilemma is offered: "Is it
ethical for a call center manager to
evaluate the performance of a call
center employee using electronic
performance monitoring data
gathered on the employee?"  Using
utilitarian, Kantian, virtue, and
covenantal ethical theories, the
study proposes an ethical decision
model and subsequently applies the
model in an attempt to resolve the
ethical dilemma. Recommendations
for future research are then
provided.
Key words
Electronic Performance Monitoring,
Call Centers, Virtue Ethics,
Covenantal Ethics, Interpersonal
Trust
1. Introduction
The efficiency characteristics of classi-
cal management theory, which emerged
in the early twentieth century primarily
under the umbrella of “scientific management”,
addressed
quantitative
aspects
of

organizational

effectiveness. Although
Fredrick Taylor’s “scientific management”,
which
emphasized
the
importance

of
work
methods
to
enhance
worker
productivity

by breaking down work into
individual tasks, may seem archaic today,
it is often considered foundational to the
study of organizational efficiency (Wren,
2004). 
Indeed, managers in today’s twentyfirst

century call center seem to have
embraced the principles of Taylor’s “scientific

management” in order to achieve
optimal productivity in their call center
employees (Bain et al., 2002). A call center
consists
of
both
technological
and
human
resources

that provide the delivery
of services over the telephone (Koole and
Mandelbaum, 2002). Electronic performance
monitoring
(EPM)
is
one
approach

that
has
been
widely
used
in
call
centers

to
improve
employee
productivity
(Wells

et

al. 2007). In the late 1980s, the U.S.
Office of Technology Assessment studied

electronic performance monitoring
and surmised that it consisted of the electronic
collection,
storage,
analysis
and
reporting
of
information
about
employees’

productive
activities (OTA, 1987).  
Research suggests that although EPM
can improve organizational productivity
in call centers (Alder, 1998); however,
EPM can also have detrimental effects
on employee well-being (Holman, 2002). 
Studies have attempted to address the
contrasting perspectives of call center
managers and employees. Most call
center studies appear to have focused on
the unfavorable impacts upon monitored
employees (Milner et al. 2007; Barnes,
2004; Holman, 2003; Holman, 2002; 
Hawk, 1994). Alder (1998) approaches 
the issue from an ethical perspective,
providing practical recommendations for
call center managers. Ambrose and Alder
(2000) propose a framework for evaluating

EPM. Dorval (2004) addresses the
issue from a legal perspective. Other call
center research focuses on specific case 
studies (George, 2001; Westin, 1992). 
McNall and Roch (2009) investigate the
issue within the framework of a social exchange
model.
This
study
extends
the
work
of
Alder

(1998)

and addresses the issue from an
ethical perspective with specific application

of ethical theories to resolve the
contrasting perspectives of call center
managers and call center employees as
pertaining to EPM. Specifically by invoking
ethical
theories,
this
paper
defines

a
specific
ethical
dilemma
related
to
EPM

in

call centers, proposes an ethical decision
model,
and
then
applies
the
ethical

dilemma

to the ethical decision model. 
Recommendations for further research
are then offered.
It should be noted that since the use
of EPM in call centers is widespread in
the United States (Wells et al. 2007) and
U.S. legal precedent appears to cede to a
company’s right to improve profitability
by using EPM (U.S. Supreme Court,
2010; Rustad and Paulson, 2004-2005;
Corbett, 2003), this study is specifically
directed to call centers in the United
States.  
2. Electronic Performance
Monitoring
Electronic performance monitoring
(EPM) is prevalent in the United States. 
Research within the past twenty-five
years has shown a continual increase
in EPM. As of 1987, approximately six
million U.S. workers had all or part of
their work performance evaluated by
data derived from EPM (OTA, 1987). 
This number jumped to ten million in
1994 (Hawk, 1994) and rose to twentyseven
million
by
the
end
of
1999
(Miller,

2003).

A 2001 survey by the American
Management Association revealed that
at least two-thirds of major U.S. firms
engaged in EPM, a figure doubling from 
only five years prior (Corbett, 2003) and 
encompassing over a quarter of the U.S.
workforce (Moorman and Wells, 2003). 
Other recent studies have indicated that
76% of organizations monitor worker
web site activities, 50% review worker
computer files, and 36% track employee
keystroke activities (Wells et al. 2007).  
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EJBO Electronic Journal of Business Ethics and Organization Studies
Vol. 18, No. 1 (2013)
More recently, the U.S. Supreme Court ruled in favor of workplace
monitoring
practices
of
a
city
government
in
a
case
where

an
employee
was
using
a
government
issued
pager
for
sending

personal
use text messages (U.S. Supreme Court, 2010). 
3. Call Centers and Electronic Performance Monitoring
A typical call center has been in existence for approximately 
eight years and employs approximately forty-nine workers.  A
majority of call centers serve mass market customers.  Almost
half of all call centers provide customer service, most primarily
handling inbound calls (Holman et al. 2007).
A 2001 study revealed that EPM is prevalent in call centers
(ICMI,
2002).
Approximately
93%
of
the
call
centers
performed
some
form
of
EPM
on
their
employees
in
2001,
a
5%

increase

from two years prior. Twenty-five percent indicated
monitoring of individual employee phone calls ten or more
times per month. Other types of monitoring (email, faxes and
web text-chat sessions) were also surveyed. Email monitoring
was the most common in internet/telecom (52%), catalog/retail
(52%),
and
financial
services
(43%)
call
centers.
Call
centers

also
indicated
that
measuring
employee
performance
(77%)
and

identifying
additional
training
needs
(72%)
were
the
most
important
reasons
for
using
EPM
(ICMI,
2002).
Holman
et
al.’s

(2007) survey indicates that EPM is more prevalent in indus-
trialized countries. NAQC (2010) points out that call center
monitoring consists of a combination of qualitative and quantitative
measures.
4. Statement of the Ethical Dilemma
Call center management goals related to EPM are directed 
towards employee performance. EPM can allow managers to
track quantitative data such as an employee’s average call time,
the time spent taking calls, the type of calls taken (Holman,
2002), calls per hour, and time between calls (Bain et al. 2002). 
Secondly, managers can listen to employee conversations with
or without their knowledge to gather less quantifiable data
(Holman, 2002). Specific measures here can include a detailed
analysis of the call content and how successfully the employee
relates to customers (Bain et al. 2002).  Thus, management
goals of EPM help to ensure that employees meet prescribed
quantitative metrics along with being friendly and persuasive
towards their customers (Holman, 2002).
Despite the benefits EPM offers to call center managers,
research suggests that EPM can have detrimental effects on
employee well-being.  Factors regarding EPM’s impact on employee
well-being
include
how
the
monitoring
is
administered

(Moorman
and
Wells,
2003)
or
how
captured
data
is
used
for

performance
evaluations

(Hawk, 1994).  If EPM is perceived
to be excessive, employees may feel less satisfied (Alder, 1998;
Miller, 2003), feel more depressed, become less active, feel more
anxiety (Holman, 2002), and experience greater loss of personal
control (Stanton and Barnes-Farrell, 1996).  Furthermore, call
centers focused on mass consumer markets are likely to have
lower profit margins, and therefore take a cost-focused approach

to service. This suggests that they are likely to adopt
more standardized work practices and performance monitoring,
invest
less
in
skills
and
training,
and
offer
lower
pay
(Holman
et al. 2007).
Thus, EPM in call centers can give rise to tensions between 
management and employees.  The tensions center on manage-
ment goals of employee performance vs. employees’ sense of
personal well-being.  This brings up an interesting dichotomy.  
An EPM system that managers claim can increase employee
performance could be the same system that may be perceived
as unfair by the employee and thus actually contribute to reduced

employee performance. Therefore if an EPM system
contributes negatively to individual employee performance in
a call center, then there could be ethical implications in using
data from that same system to evaluate the performance of the
employee. Thus the following ethical dilemma is offered:
"Is it ethical for a call center manager to evaluate the performance
of a call center employee using electronic performance monitoring data
gathered on the employee?"
5. Ethical Decision Model to Resolve the Ethical
Dilemma
Given the offered ethical dilemma, several aspects of ethical theory,
i.e.,
utilitarian,
Kantian,
virtue,
and
covenantal,
are
invoked

to
provide
guidance
for
resolving
the
ethical
dilemma.
The
proposed
ethical decision model is shown in Figure 1.
5.1 Utilitarian and Kantian Considerations
The first steps in the ethical decision model include parallel
tracks of utilitarian and Kantian considerations related to the
ethical dilemma. From the manager’s perspective, the model ap-
plies “act” utilitarianism theory (steps 1 through 5 in Figure 1) 
in that an act is morally permissible if the consequences of the
act produce the greatest amount of benefit for the most persons
affected by the act (Tavani, 2007). Specifically, the ethical decision
model
addresses
the
following
from
the
perspective
of
the

manager:
benefits
vs.
costs,
(Velasquez,
2012),
harms
imposed,

rights
exercised,
and
rights
denied
(Hosmer,
2010).
Managerial

goals
of
achieving
the
best
possible
performance
levels
from
the

employee
form
the
basis
of
the
utilitarian
considerations
in
this

part
of the ethical decision model.
Kantian considerations follow the same process as the utilitarian

track, except the employee’s perspective is considered
(steps 6 through 10 in Figure 1). The second formulation of
Kant’s categorical imperative is applied in that individuals have
dignity and should not be treated merely as tools or machines  “
(Velasquez, 2012) and that employees are valued beyond tools
and (Arnold et al, 2012). Specifically, the ethical decision model
considers the duties to the individual, harms imposed on the
individual, rights exercised by the individual, and rights denied
to the individual (Hosmer, 2010). Respect for and dignity of
the employee form the basis of the Kantian considerations in 
this part of the ethical decision model.
5.2 Effectiveness vs. Acceptability of Electronic Performance
Monitoring
In the ethical decision model (Figure 1), utilitarian concerns
and Kantian concerns can be conflicting, since aspects of “act”
utilitarian theory are concerned with actions that bring the
greatest good to the greatest number of people, while the second
formulation of Kant’s categorical imperative is concerned with
duties owed to individuals (Hosmer, 2010). The quest for the
call center manager to gain more and more EPM information 
could potentially place increased burdens upon the call center 
employee (Alder, 1998).
Therefore, the model requires provisions to address this 
potential dichotomy by assessing the “act utilitarian” effectiveness
of

EPM (the manager perspective) vs. “Kantian (Second 
categorical imperative)” acceptability of the EPM actions (the 
employee perspective) (Godfrey, 2000), as shown in steps 10
through 12 in Figure 1. If both the manager and employee agree 
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EJBO Electronic Journal of Business Ethics and Organization Studies
Vol. 18, No. 1 (2013)
Figure 1 – Ethical Decision Model
that EPM is both effective and acceptable, respectively, then the
question of employee trust in the manager is addressed (step
15 in Figure 1). If either the manager or the employee does not
believe that EPM is effective or acceptable, respectively, then
virtue-based ethics from a managerial perspective is applied
(step 13 in Figure 1).
5.3 Managerial Virtue
Virtue theory suggests that the foundation of morality is based
on one’s character (Arjoon, 2000) and that one who is virtuous
acts
honorably
(Hosmer,
2010).
One
is
virtuous
if
he/she

practices

good moral habits (Cavanagh and Bandsuch, 2002)
and demonstrates empathy, integrity, and respect (Chun, 2005;
Shanahan and Hyman, 2003). Virtue ethics “takes the concept
of character … to be central to the idea of being a good person
in business (Solomon, 2003: 44). Moreover, an action is morally
right if the acting agent (e.g., a call center manager) personifies 
a morally virtuous character (Velasquez, 2012). It is within this 
context that the “act utilitarian” and “Kantian (2nd categorical
imperative)” contradictions related to the ethical dilemma start
to be addressed within the ethical decision model (step 13 in
Figure 1).
To attain the benefits of a mutually reciprocal relationship, 
someone must make the first move; managers are in the best position
to
initiate
(Whitener
et
al.
1998).
Thus
in
applying
virtue

ethics, the model places direct responsibility upon the protagonist

(the call center manager) in that if the manager practices
virtuous behavior in applying EPM, such behavior will encourage

monitored call center employees toward more favorable
performance behaviors (Herman, 1997).  Indeed, virtue is one
of the most admirable traits of a manager (Whetstone, 2003).
By applying virtue ethics, the call center manager could “con-
ceive new possibilities in an attempt to reframe the problem and
avoid an unbearable situation that calls for arbitrary decisions”
(Geva, 2000: 790). Thus, the ethical decision model addresses
the ethical dilemma from the virtue-based managerial perspective

in that call center management is called upon to identify
new options for moral action (Geva, 2000).  
5.4 Covenantal Ethics
In the manager-employee relationship, each side can encounter
contingencies (i.e., uncontrollable actions of the other party) 
that result in vulnerabilities to the other party (Herman, 1997).  
In the ethical decision model, unresolved harms and rights denied
take
the
form
of
contingencies
as
they
flow
out
of
the
“act

utilitarian”
and
“Kantian
(Second
categorical
imperative)”
portions
of
the
model.
These
contingencies
lead
to
vulnerabilities

on the other side. To resolve these contingencies, the ethical 
decision model requires the manager to take the first step and
attempt to address the issues from a virtue-based perspective.   
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EJBO Electronic Journal of Business Ethics and Organization Studies
Vol. 18, No. 1 (2013)
Virtuous management actions then flow into a more two-sided,
cooperative approach towards resolving the ethical dilemma
through covenantal ethics (Step 14 in Figure 1).
Virtue-based manager behaviors lead to management commitments
to
the
employee.
These
actions
can
be
followed
by
subsequent
employee
commitments
to
management
as
shown
in
Step

14
in
Figure
1.
This
may
result
in
a
specialized
manifestation
of

a
relational
contract,
i.e.,
a
covenantal
relationship
(Barnett
and

Schubert,
2002)
which
is
based
on
the
mutual
commitment
to

the
welfare
of
both
parties
and
a
shared
set
of
values
(Van
Dyne

et
al.
1994).
A
covenantal
relationship
is
meant
to
protect
the

uniqueness
of
respective
parties
(Pava,
2001),
show
respect
and

concern
for
each
other
(Childs,
1995),
provide
a
framework
for

collective
decision-making
(Stueart
and
Wilbanks,
1974),
and

strive
for
a
healthy
working
relationship
(Barnett
and
Schubert,

2002).
A
covenantal
relationship
can
also
provide
a
mediating

role
for
building
loyalty
(Van
Dyne
et
al.

1994).  In addition,
a covenantal relationship between a manager and an employee
can foster employee behaviors that will have lasting benefits to
the organization (Barnett and Schubert, 2002).
Thus in the ethical decision model, covenantal ethics attempts
to
subjugate
any
contingencies
and
vulnerabilities
in
the

manager-employee

relationship as pertaining to EPM. Covenantal
ethics
then
requires
accepting
rather
than
vanquishing

contingency elements in the relationship and shouldering the 
burdens of cooperation (Herman, 1997). In the ethical decision
model,
Herman’s
(1997)
conceptualization
of

covenantal
ethics is thus applied: (1) Commitments from the call center
manager to the employee are identified; (2) Commitments (i.e.,
responses) from the call center employee are identified.
Furthermore, an inherent quality of a covenantal relationship
is that “covenantal partners can disagree about the particulars
without threatening the existence of the relationship” (Van
Dyne et al. 1994: 768). This has direct implications for the
ethical decision model in that the manager and the employee
can disagree about the specifics of EPM and yet not adversely
threaten their working relationship.  The ethical decision model
proposes
that
covenantal
ethics
provides
the
best
means
for

the
manager
and
the
employee
to
cooperate
with
each
other
in

a
respectful
way
(Pava,
2001)
in
order
to
address
any
contingencies
and
vulnerabilities
arising
from
EPM.

In
addition,
from
an

organizational
perspective,
developing
a
covenantal
relationship

with
employees
can
benefit
the
overall
functioning
of
an
organization

(Barnett and Schubert, 2002), including a call-center
organization.
5.5 Employee Trust in Management
For the final step of this phase of the ethical decision model to
be fulfilled and flowing from the covenantal portion of the ethical
decision
model,
employee
trust
is
needed
when
EPM
is
used

in
the
performance
appraisal
process
(Childs,
1995)
(step
15
in

Figure
1).

The
ethical
decision
model
presumes
that
employee

trust
in
management
is

a key goal in the presence of an EPM
system, since it demonstrates a commitment to building relationships
of
trust
(Van
Dyne
et
al.
1994).

Employees
can
have

distinct

levels of trust in people at different levels of manage-
ment within the same organization (Perry and Mankin, 2007).  
As discussed by Burke et al (2007), factors related to trust in
organizational leaders include managerial competence (Mishra,
1996), support (Dirks and Ferrin, 2002); benevolence (Burke
et al. 2007), and reliability (Mishra, 1996). Another factor in-
cludes the ability to provide compelling organizational direc-
tion (Hackman, 2002).
Yet with respect to EPM, trust in one’s immediate manager 
is even more critical, since the direct manager will have personal
interaction with the employee as pertaining to EPM results.  
Historical studies have conceptualized trust in one’s immediate
manager as interpersonal trust, primarily in terms of the perceived
character
of
the
manager
(Wheeless
and
Grotz,
1977),

reliable

behavior of the manager (Rotter, 1980; Zaheer et al.
1998) as related to receiving rewards (Rempel et al. 1985), how
safe the employee feels with respect to the manager (Wheeless
and Grotz, 1977), and how dependable the manager is (Rempel
et al. 1985).
Interpersonal trust contextualized as a form of vulnerability
has
also
been
addressed
in
early
literature.


Specifically, interpersonal

trust involves expectations of behavior of another
person under conditions of vulnerability (e.g., within a manager-employee
relationship)

and risk (Currall and Judge, 1995). 
Zand (1972: 230) states that interpersonal trust is a “conscious
regulation of one’s dependence on another that will vary with
task, the situation, and the person.” Expanding upon this conceptualization,
Mayer
et

al (1995: 712) argued that trust is “a
willingness of a party to be vulnerable to the actions of another
party based on the expectation that the other will perform a
particular action important to the trustor, irrespective of the
ability to monitor or control that party.” This suggests that that
the trustor (i.e., the call center employee) takes some risk since 
he/she is willing to accept a certain degree of vulnerability, e.g., 
when the employee is the subject of EPM. Indeed, Colquitt et
al’s (2007) study indicates a moderately strong relationship between

trust and risk taking.   Thus, interpersonal trust is an
optimistic expectation (e.g., reliability and rewards) of the behavior
of
another
person
under
conditions
of
personal
vulnerability
and dependence (Hosmer, 2010).
Ultimately, management’s goal of an EPM system is to improve
employee
performance.
There
is
support
in
the
literature

that

employee trust in one’s manager can result in improved
employee performance. Dirks and Ferrin (2002) found that
trust in one’s immediate manager was most strongly associated
with work attitudes, organizational citizenship behaviors, and
employee performance. Mayer and Gavin (2005) reported that
when employees have high levels of trust in their managers,
they will focus more on work tasks, which suggests favorable
employee performance outcomes. Madjar and Ortiz-Walters
(2009) confirmed earlier research that an employee’s trust in
his/her manager was directly related to routine performance
behaviors. Ning et al (2007) reported that an employee’s trust
in his/her immediate manager has positive influences on em-
ployee performance.
Therefore, the ethical decision model presumes that if employee

trust in the manager is not achieved with respect to
EPM, then the employee will reject EPM and not necessarily
perform at his/her potential. Step 14 in Figure 1 is performed
again in order for the manager-employee to readdress the contingencies

and vulnerabilities arising from EPM in order for
employee trust to increase. Once employee trust in the manager
is achieved with respect to EPM, then the employee will accept
EPM and have greater opportunity to perform at his/her potential.
Overall, the organization will benefit.
6. Application of Ethical Decision Model to the Ethical
Dilemma
Based on available call center research, the ethical decision 
model will now be applied to EPM in call centers, specifically 
as pertaining to the call center manager and the call center employee.
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EJBO Electronic Journal of Business Ethics and Organization Studies
Vol. 18, No. 1 (2013)
6.1 “Act” Utilitarian Considerations – The Manager Perspective
Referring to Steps 1 through 5 in Figure 1, “act” utilitarian considerations
center
on
benefits
and
costs
to
the
manager
(Steps

1
and
2),
harms
imposed
upon
the
manager
(Step
3),
manager

rights
exercised (Step 4), and manager rights denied (Step 5). 
Regarding manager benefits and costs (Steps 1 and 2 in Figure
1),
research
literature
shows
that
from
the
“act”
utilitarian

perspective,
EPM
directly
benefits
business
organizations
(including

call centers), indirectly benefiting customers (reduced
prices and better customer service) and the society at large (a
more stable workforce) (Hawk, 1994). EPM can relieve managers
of
the
tedious
tasks
related
to
employee
oversight
(Dorval,

2004;
Stanton,
2000)
increasing
productivity
(Lee
and
Kleiner,

2003).
More specifically, EPM can also act as a tool for managing
resources,
be
used
to
develop
better
training
programs,
and

plan
workloads
(Aiello,
1993).

It
has
also
been
suggested
that

EPM
could
help
avoid
legal
liability
and
security
breaches
(Lee

and
Kleiner, 2003; Alder, 2001).
Call centers provide the organization with the opportunity to
reduce costs, improve customer service, and provide greater opportunities
for
revenue
generation
using
inside
sales
personnel

(Holman,
2003).
It
is
no
surprise
then
that
a
tool
such
as
EPM

has
been
applied
in
call
center
organizations
in
order
to
maximize
operational
efficiencies.


EPM can support increased call 
center performance through metrics tracking (Bain et al. 2002). 
Indeed at General Electric, customer satisfaction increased by
96% as a result of implementing an EPM system of employees
who
handled
customer
service
calls
(Alder,
2001).
Installation
of
a
call
accounting
system
at
a
California
firm
resulted
in

a

productivity increase equivalent to seven and one-half manweeks
per
month
(Hawk,
1994).
Call
center
managers
can
also

view
EPM-derived
performance
data
in
real-time,
thus
having

virtually

instant access to call center employee performance
throughout the workday (Richardson and Belt, 2000). One
EPM system has even been applied to evaluate employee voice
quality using speech recognition and pattern matching technology
(Zweig et al. 2006).
In terms of using EPM data for performance evaluations, the
“act” utilitarian perspective shows that benefits to management
primarily relate to providing more insight into employee performance
and
using
the
obtained
data
to
improve
productivity.


Feedback
from
EPM
data
can
increase
employee
productivity

since
call
center
management
can
determine
what
mistakes
an

employee

makes and provide advice to improve productivity
(Lee and Kleiner, 2003).  Call center management can also ben-
efit from the use of EPM-derived performance evaluation data 
as a basis for promotion criteria and the public display of metrics

as means of encouraging motivation in others (Bain et al.
2002). The result is that EPM can provide call center managers
with greater control (Aiello, 1993), since EPM data provides
more insight into employee performance.
Referring to Step 3 in Figure 1, harms to the manager in using
EPM
data
for
employee
performance
evaluation
primarily

center

on employee reactions to monitoring that result in reductions

in employee productivity.  Hawk (1994) found that
the more managers relied on EPM data to appraise employee 
performance, the less satisfied employees were with the fairness 
of the evaluation process. This could have direct implications in
employee productivity in a call center. Yet, the call center manager
may
be
relegated
to
the
fact
that
call
center
employee
turnover
is

a given and not exceedingly costly to the organization. 
Indeed, a recent study reported that U.S. call center annual em-
ployee turnover rate was 28%, and that annual employee turnover
costs
in
U.S.
call
centers
were
equal
to
or
comparably
lower

in industrial countries such as the United Kingdom, Ireland,
and Canada (Holman et al. 2007). Thus, harms to the company
might not be as pronounced since a call center manager may
assume that frustrated employees may leave the company and
eventually be replaced by employees whose productivity will
not be negatively impacted by EPM.
Referring to Step 4 in Figure 1, the primary right exercised
by management in using EPM data for employee performance
evaluation center on the right to improve productivity and ultimately

greater profitability. The monitoring of metrics can
lead to greater opportunities to motivate call center employees
to increased productivity. Some sample metrics include speed
of answer (Anton and Gustin, 2000), time spent taking calls
(Holman, 2002), average call time, time between calls (Bain et
al. 2002), after call work time (Anton and Gustin, 2000), and
number of calls processed per employee per day (Holman et al.
2007). Thus, the key right exercised by the call center manager
is increased overall call center employee performance through
metrics tracking (Bain et al. 2002).
Referring to Step 5 in Figure 1, there is little empirical data
regarding rights denied to management as a result of using EPM
data for employee performance evaluation. Moreover despite
the ethical issues of EPM monitoring, U.S. legal precedent appears
to

uphold a company’s right to improve profitability by 
using EPM (Rustad and Paulson, 2004-2005; Corbett, 2003).
6.2 Kantian (Second Categorical Imperative) Considerations – The
Employee Perspective
Referring to Steps 6 through 9 in Figure 1, Kantian (Second
categorical imperative) considerations center on benefits to the
employee (Step 6), harms imposed upon the employee (Step 7),
employee rights exercised (Step 8), and employee rights denied
(Step 9). 
Despite the potentially unfavorable implications of EPM
upon the call center employee, research does indicate that employees
can
also
benefit
from
EPM
(Step
6
in
Figure
1).

EPM

may
increase
employee
satisfaction
because
employees
perceive

that
EPM
results
contribute
to
more
objective
performance
appraisals

and improved performance feedback (Moorman and
Wells, 2003). Alder (2001) contends that employees electronically
monitored
in
bureaucratic
cultures
may
respond
more
favorably
to

EPM. Employees can also benefit from EPM as it
enables them to improve their performance and develop new
skills. In addition, well-being can be improved as employees
derive satisfaction from the knowledge of their improved per-
formance and from being better equipped to cope with work 
demands (Holman, 2002).
Pertaining to Step 7 in Figure 1, research indicates that the pri-
mary harms to the EPM-monitored call center employee relate
to employee health. Hawk (1994) found that health problems
occurred to a greater extent in electronically monitored employees
when
EPM
measured
a
large
quantity
of
behaviors.

Specifically,
opponents
of
EPM
claim
that
it
contributes
to
lowering

work-life
quality
by
making
work
less
interesting,
challenging,

satisfying
(Alder,
1998),
and
stressful
(Barnes,
2004).

Milner
et

al
(2007)
reported
that
the
intensity
of
performance
monitoring

was significantly related to emotional exhaustion of call center 
employees. Holman (2003) noted that the perceived intensity
of EPM was positively associated with anxiety, depression and
emotional exhaustion of call center employees. Moreover, high
levels of anxiety brought about by excessive monitoring in call 
centers may also cause people to devote their cognitive resources 
to dealing with their anxiety, rather than focusing on providing
quality service and thereby not performing to their full poten-
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EJBO Electronic Journal of Business Ethics and Organization Studies
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tials (Holman, 2002). 
Pertaining to Step 8 in Figure 1, a primary employee right 
exercised (i.e., right made more certain) associated with management
using
EPM
data
for
employee
performance
evaluation

center
on
more
objective
data
made
available
for
the
performance
evaluation
process
(Moorman
and
Wells,
2003).
The
data

could
be
perceived
as
less
ambiguous
and
thus
give
the
employee

a more impartial evaluation. Indeed, it is possible that call
center employees may view EPM as a performance improvement
opportunity.
Grant
et

al (1988) reported that customer
service employees who viewed performance standards as attainable

showed little concern about being monitored electronically;

Grant et al also suggested that monitoring should play
an increased role in productivity. Workers handling processed
magazine subscriptions over the telephone indicated that they
preferred the more objective feedback from an EPM system
rather than to feedback from their supervisors (Earley, 1988). 
It is also possible that EPM provides the opportunity for call
center employees to “develop and defend their own definitions
of professionalism and good performance” (Lankshear et al.
2001: 605). Moreover, employees in process-driven bureaucratic
cultures
may
be
more
accepting
of
EPM
in
the
performance

evaluation
process (Alder, 2001).
Pertaining to Step 9 in Figure 1, a primary employee right de-
nied (i.e., right made less certain) associated with the call center 
manager using EPM data for call center employee performance
evaluation relates to fairness. The U.S. Office of Technology
Assessment’s 1987 report (OTA, 1987) points out that EPM
would be opposed or resented by employees if the employees
perceived that the monitoring was unfair or if it was implemented
without
their
participation.
In
fact,
Hawk
(1994)
reported

that
increased
reliance
on
EPM
can
result
in
less
satisfied
employees
regarding
fairness
in
the
employee
performance
evaluation
process.
Furthermore
given
the
aforementioned
harms
to

the
call
center
employee,
using
EPM
to
measure
performance

could
be deemed as unfair by the call center employee.
6.3 Effectiveness vs. Acceptability
Steps 10 through 12 in Figure 1 pertain to the manager’s perceived

effectiveness of EPM vs. the employee’s acceptance of
EPM.  If both the call center manager deems EPM as effective
and,
concurrently,
the
employee
deems
EPM
as
acceptable,

then
the
question
of
employee
trust
in
the
manager
is
addressed

(step
15 in Figure 1).  
Yet as suggested in Steps 1 through 9 of the ethical decision 
model, there could be a myriad of conflicting perspectives with 
respect to EPM call centers. Areas of contradiction in terms of
effectiveness vs. acceptability center on management’s desire for
increased productivity from EPM-based performance appraisal
processes vs. the corresponding negative employee reactions to
EPM primarily due to health impacts and fairness. The key
issue here is that if increased monitoring by the manager, for
productivity reasons, results in the employee rejecting it as a basis
of
performance
appraisal,
due
to
health
issues
and
perceived

fairness.
Indeed,
call

center employees will use coping mechanisms
to
deal
with
a
perceived
unfavorable
EPM
environment.


Such

coping mechanisms may affect their motivation, hence
negatively impacting their performance (Stanton, 2000). As
Godfrey (2000: 2) states, EPM activities are not “intrinsically
acceptable or unacceptable. They become so because of employee
perceptions.”  
With respect to covenantal ethical theory (Herman, 1997) 
in the manager-employee relationship, each side can encounter
contingencies (i.e., uncontrollable actions of the other party) 
that result in vulnerabilities to the other party. In the ethical
decision model, unresolved harms and rights denied take the
form of contingencies as they flow out of the “act utilitarian”
and “Kantian (Second categorical imperative)” portions of the
model. These contingencies lead to vulnerabilities on the other
side.
Herman’s (1997) covenantal ethical theory can be applied to
call center manager-employee relationship in terms of EPM. 
For example, the call center manager may use undesirable EPM
performance appraisal processes. This is a managerial action
that is not directly controllable by the call center employee. 
Specifically, it represents a contingency encountered by the call
center employee. As a result, the call center employee becomes
vulnerable to this managerial action. In response to potential
health and fairness issues arising from the EPM process, the
call center employee may overtly and/or covertly reject EPM
in its current form. This is an employee action that is not completely
and/or
directly
controllable
by
the
call
center
manager.


Specifically,
it
represents
a
contingency
encountered
by
the
call

center
employee.
As
a
result,
the
call
center
manager
becomes

vulnerable
to this employee action.
Thus if either the manager or the employee does not believe
that EPM is effective or acceptable, respectively, then virtuebased
ethics
from
a
managerial
perspective
is

applied (step 13 
in Figure 1). The ethical decision model requires that the call 
center manager take the first step and attempt to address the
issues from a virtue-based perspective. Step 13 requires the call
center manager to understand the factors influencing the EPM
performance appraisal process and modify it to make the process
work
in
such
a
way
to
achieve
employee
acceptability,
while

still
retaining
the
managerial
benefits
that
EPM
provides
in
the

performance
appraisal

process. Virtuous management actions
then flow into a more two-sided, cooperative approach of resolving
the
ethical
dilemma
through
covenantal
ethics
(step
14

in
Figure 1).  
6.4 Virtue Based Commitments from the Call Center Manager
Pertaining to Step 13 in Figure 1 from a virtue-based managerial
approach,
the
call
center
manager
can
begin
to
demonstrate

more

concern for the monitored employees (Whitener et al.
1998) by striking the right balance between a rule-based EPM
process and a more open and trusting EPM process (Godfrey,
2000). Specifically, virtue-based managerial commitments to
the employee require the call center manager to identify new
options for moral action that attempt to mitigate the harms and 
rights denied to the call center employee. Three aspects of vir-
tue – empathy, integrity, and respect – (Chun, 2005; Shanahan
and Hyman, 2003) could be practiced by the call center manager
in
terms
of
EPM.
As
informed
by
call
center
literature,
these

virtue-based
managerial
characteristics
(empathy,
integrity,
and

respect)
can
take
the
form
of
the
following
commitments
to
the

call
center employee:
1. Empathy ? Managerial Commitment One ? The
call center manager could empathize with call center employees
in terms of being monitored and allow them to participate in
the implementation of the EPM system. The goal would be to
have an EPM system that is mutually satisfying to both parties.
2. Integrity ? Managerial Commitment Two ? The
call center manager could be supportive and not punitive towards
call

center employees when using an EPM system (Al-
der, 1998). This means the call center manager could act with 
integrity when applying the EPM system to measure employee
performance.
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3. Respect ? Managerial Commitment Three ? The
call center manager could respect the perspectives of the call
center employee and allow them to challenge EPM-derived
data when used for the purpose of performance evaluation.
In reality, the call center manager should be willing to cede
control in the EPM performance measurement process, even
though it may be difficult for the manager to give it up (Houlihan,

2000). Within the general framework of these virtuous
managerial actions, i.e., empathy, integrity, and respect, the call
center manager can begin the process of making commitments
to the employees in terms of EPM usage in the performance
evaluation process. The goal is to gain favorably responsive
commitments from the monitored call center employees. The
covenantal ethics portion of the ethical decision model picks up
from this point. 
6.5 Covenantal Ethical Considerations – The Call Center ManagerEmployee
Relationship
With the three call center manager commitments to the employee
identified,
responding
employee
commitments
to
management,
based
on
available

EPM call center research, can be
addressed.  
6.5.1 Employee Response to Managerial Commitment One
Managerial Commitment One recommends that the call center 
manager could empathize with call center employees in terms
of being monitored and allow them to participate in the implementation
of the EPM system.
It is generally understood from human resource management

literature that performance measurement practices that
encourage high employee involvement often lead to improved
employee performance (Batt, 2002). Employee involvement
in EPM implementation whenever possible is a key employee
commitment in his/her covenantal relationship with the call
center manager. Indeed, call center research shows that when
provided the opportunity to participate in the implementation
of EPM, call center employees are more satisfied with EPM
and ultimately employees performance better.
In a study of 200 telecommunications employees, Westin
(1992) reported favorable employee results when employees
were involved in the development of an EPM system. Alder
and Tompkins (1997) indicated that if employees participate
in the design and implementation of the EPM system, EPM
will lead to improved individual performance. Batt’s (2002) call
center study found that a direct use of employee-centric indi-
vidual discretion and learning lead to positive results in terms of 
sales.  In fact, based on a study of five call center organizations,
George (2001) suggested that managers can use EPM in ways
that employees can tolerate it and possibly even approve of it. 
Moreover, Chen and Ross (2005) argue that employees should
be afforded the opportunity to alter monitoring processes if
they are perceived as being unfair.
More narrowly focused studies shed light on how an employee’s
sense
of
personal
control
affects
overall
satisfaction
and

performance.
Smith
et
al
(1992)
reported
that
telecommunications
employees
felt
less
job
control
when
they
were
electronically
monitored,
as
compared
to
those
who
were
not
electronically

monitored. Indeed, giving call center managers complete
control over the design and implementation of an EPM system
may reduce subordinates' personal control, resulting in unfavorable
effects
on
worker
attitudes
and
performance
(Stanton
and

Barnes-Farrell, 1996).
In summary, the call center employee must become involved 
in EPM implementation when given the opportunity to do so. 
This represents an employee commitment to the call center
manager within their covenantal relationship and helps to provide
a
framework
for
collective
decision-making.
The
call
center

manager’s
willingness
to
cede
some
control
in
the
EPM
implementation
is
matched
by
increased
employee
involvement,
leading
to
higher
employee
satisfaction,
and
ultimately
greater
levels

of
employee performance.
6.5.2 Employee Response to Managerial Commitment Two
Managerial Commitment Two recommends that call center
manager be supportive and not punitive towards call center employees
when using an EPM system.
When EPM is applied as a development tool in a supportive

way, favorable call center employee responses can occur.
Ambrose and Alder (2000) propose that employees who receive

constructive feedback based on EPM data will perceive
the performance appraisal process as being more interpersonally

sensitive and thus procedurally fair. In study of 347 call
center employees, Holman (2003) reported that EPM can reduce
stress
in
monitored
employees
if

EPM is conducted in a
developmental manner. Miller (2003) also suggests that EPM
feedback combined with establishment of an employee development
plan
will
be
associated
with
greater
appraisal
satisfaction

than would delivery of EPM feedback alone.
Favorable call center employee reactions to EPM can also
occur if the call center manager acts as a supporting facilitator
with
respect
to
EPM,
as
opposed
to
using
EPM
punitively.

EPM-derived
data
should
be
used
to
facilitate
greater
levels
of

performance,

in place of being used punitively (Alder, 1998),
and thus micromanagement practices such as “insisting that
calls are handled within an exact time and excessive call scripting
should
be
resisted”
(Holman,
2002:
46).
Indeed,
more
employee
interaction
with
the
call
center
manager
can
help
alleviate

the
stress
one
may
experience
when
being
monitored
electronically
(Hawk, 1994). Based on a survey of call center employees,
Holman
(2002)
recommends
that
monitoring
practices
should

have
a
supportive
and
facilitative
style.
In
fact,
DeTienne
et
al

(1993)
suggests
that
employees
be
told
what
employee
actions

will
be
monitored,
when
employees
will
be
monitored,
and
how

the
performance data will be used.
Other supportive call center manager actions can result in
positive employee responses. In study based on ninety-one
interviews of employees who were involved in the handing of
phone calls, Chalykoff, and Kochan (1989) reported that use 
of constructive feedback and supervisor consideration behav-
iors was positively related to employee satisfaction of the EPM
system. Holman’s (2002) survey of call center employees found
that a low level of monitoring in conjunction with a supportive

team leader had favorable effects on employee well-being. 
EPM should measure fewer behaviors and evaluate only those
behaviors most germane to indicating employee productivity
and work quality (Hawk, 1994). Finally, EPM can facilitate
greater levels of performance by matching the right call center
employee to the right call center job (Houlihan, 2000).
In summary, there are a number of positive employee responses
when
the
call
center
manager
is
perceived
as
being
supportive.
These
employee
responses
are
manifested
as
employee

commitments
to
the
call
center
manager
within
their
covenantal
relationship.
The
call
center
manager’s
willingness
to
not
use

EPM
punitively,
but
rather
as
an
employee
development
tool,

is matched by increased call center employee satisfaction and, 
ultimately, greater levels of employee performance.
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6.5.3 Employee Response to Managerial Commitment Three
Managerial Commitment Three recommends that the call
center manager respect the perspectives of call center employees
and allow them to challenge EPM-derived data when used for
performance evaluation.
The call center manager’s respect for the employee’s assessment
of
EPM-generated
performance
data
can
help
to
perpetuate
their
covenantal
relationship.
A
sense
of
fairness
is
built
into

the
EPM
process,
helping
to
protect
the
uniqueness
of
the
employee
within
the
covenantal
relationship
(Pava,
2001).
Greenberg
(1986)
found
that
soliciting
input
prior
to
the
employee’s

evaluation
and
allowing
employees
to
challenge
the
evaluation

were
key
determinants
in

employee’s perception of fairness in
the performance appraisal process. In a study conducted with
251 call center employees, Moorman and Wells (2003) reported
if

workers perceive opportunities to challenge the interpretation
and
use
of
the
feedback
derived
from
the
EPM
system,

then
they
perceived
the
EPM
system
as
a
fair
method
of
monitoring
performance.
Several studies indicate other benefits when call center employees

are allowed to challenge the data. Hawk’s (1994) research
concluded
that
employees
whose
managers
allowed
them

to
challenge
EPM
performance
data
experienced
less
stress
and

had
fewer
health
problems.
Building
on
Hawk’s
(1994)
findings,

Ambrose and Alder (2000), in their conceptual study, suggest 
that formal mechanisms should be put in place to allow employees
to
challenge
EPM
data
as
it
becomes
available.

Specifically,

Ambrose
and
Alder
(2000:
206)
propose
that
“employees
will

perceive

opportunities to challenge the computer monitoring
system as more legitimate when performance feedback occurs
quickly after performance than when feedback is delayed.” Ball
(2001) also suggests that employees should be given the opportunity
to challenge EPM data.
Thus, another key employee commitment in his/her covenantal

relationship with the call center manager is that the
employee should recognize that he/she can challenge the performance

data. This process is dependent on the call center
manager’s virtue-centric respect for employee opinions (Murphy,
1999). Yet, the employee must not abuse the opportunity,
despite
that
fact
that
covenantal
partners
can
disagree
without

threatening
the
existence
of
their
relationship
(Van
Dyne
et
al.

1994).
A
key
employee
commitment
to
the
call
center
manager

within
their
covenantal
relationship
is
the
employees’
commitment
to challenge data in a responsible and realistic manner.
6.5.4 Summary of Covenantal Ethical Considerations
The ethical decision model suggests that EPM can thrive in
call center within the framework of a covenantal relationship
between the call center manager and the employee.  Empathy,
integrity, and respect, three aspects of virtue (Chun, 2005;
Shanahan and Hyman, 2003) lead to managerial commitments
to the employee which, in turn, lead to favorable performance
responses (i.e., commitments) from the employee. A call center
employee’s perception of fairness in respect to EPM is critical
in terms of the employee’s performance response (Ambrose and
Alder, 2000). In fact, Wells et al (2007) reported that when
employees perceived EPM as means to improve their performance,
they
viewed
EPM
as

fair. The employees also “reported
higher job satisfaction, organizational commitment, and a felt
obligation to reciprocate” Wells et al (2007: 133). Thus within a
call center, a covenantal relationship between a manager and an 
employee can foster employee behaviors that will have lasting 
benefits to the organization (Barnett and Schubert, 2002).
However as shown in Step 15 in Figure 1, achieving employee
trust
in
the
call
center
manager
with
respect
to
use
of
EPM

for
performance
appraisal
is
the
ultimate
goal
in
the
ethical
decision
model.


The final portion in the ethical decision model
picks up from this point.
6.5.5 Employee Trust in the Call Center Manager with respect to
EPM
A final key aspect of a covenantal relationship is that both parties
demonstrate
commitment
to
building
relationships
of
trust

(Childs,
1995;
Van
Dyne
et
al.
1994).
As
shown
in
Step
15
in

Figure
1,
if
employee
trust
in
the
call
center
manager
is
achieved

with

respect to using EPM for performance evaluation, then
EPM is being used effectively and both parties can benefit. If
employee trust is still not achieved, the call center manager and
the employee must continue to subjugate any other contingencies

and vulnerabilities in their relationship as pertaining to
EPM (Herman, 1997). This process continues until employee
trust in the manager is achieved.
The ethical decision model suggests that employee trust in
management with respect to EPM is the desired goal. As previously
discussed,
there
are
favorable
organizational
outcomes

when
employees
trust
their
managers
(Dirks
and
Ferrin,
2002;

Mayer
and
Gavin,
2005;
Ning
et

al. 2007; Madjar and Ortiz-
Walters, 2009). However, what does this mean with respect 
to EPM in call centers and associated employee performance
results? In other words, does high employee trust with respect
to EPM lead to the employee performance goals that call center
managers ultimately wish to achieve?
There appears to be minimal call-center-specific research
available on the role of employee trust with respect to EPM
and call center performance. Westin (1992) reported that if the
trust relationship between call center employees and management
is
jeopardized
as
a
result
of
electronic
monitoring,
EPM

can

be adapted to address the associated problems.  Yet ultimately,

an understanding of how increased employee trust in
management translates to greater performance in the electronically
monitored call center employee is needed.
One recent call center study sheds light on this subject.  In
a study of 257 call center representatives, McNall and Roch
(2009) investigated the role of employee trust and EPM within
a
framework
of
a
social
exchange
model.
Social
exchange
is

based
on
reciprocity
between
parties
(Blau,
1964),
similar
to
the

reciprocal
nature
of
covenantal
ethics
(Childs,
1995;
Herman,

1997;
Barnett
and
Schubert,
2002).

McNall
and
Roch
(2009)

reported that call center employee trust in the manager was di-
rectly related to both employee satisfaction and job performance.


Within the context of EPM, McNall and Roch (2009)
showed that if employee trust can be attained in terms of how
EPM is implemented, greater levels of employee job performance
is achievable within a call center.
Thus there are indications of the importance of call center
employee trust in management when EPM is used for the
measurement of employee performance.  More call center
studies as pertaining to trust and EPM are needed. Yet drawing

upon covenantal ethical theory if employee trust in management

is achieved, the covenantal relationship between call
center employees and call center management can help to subjugate
the
contingencies
and
vulnerabilities
in
their
relationship

as
pertaining
to
EPM.

The
result
would
be
a
more
cooperative

and

thus more mutually satisfying EPM-based performance 
appraisal process.
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7. Responding to the Ethical Dilemma
We come back to the ethical dilemma offered at the beginning 
of this study:
"Is it ethical for a call center manager to evaluate the performance 
of a call center employee using electronic performance monitoring data
gathered on the employee?"
When viewing this ethical dilemma through the lens of various

ethical theories as documented in this study, the answer
can be “yes.” The contrasting “act utilitarian” perspectives of
productivity from the call center manager versus the “Kantian
(Second categorical imperative)” perspectives of individual wellbeing
from
the
call
center
employee
setup
the
ethical
dilemma.


The
challenge
of
EPM
in
call
centers
is
resolving
the
divergent

management

and employee perspectives. As discussed in this
study, virtue-based managerial actions are the starting point.  A
covenantal relationship between call center management and
call center employees then provides the mechanism to achieve
an optimal EPM process that will ultimately be both effective
for management and acceptable to employees. Ultimately, the
goal of the covenantal relationship is that call center employees
trust the call center manager in terms of using EPM for performance
evaluation.
8. Recommendations for Future Research
The dichotomous “act utilitarian” manager and “Kantian (Sec-
ond categorical imperative)” employee positions as pertaining
to EPM in call centers have been well-documented in the litera-
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ture (Alder, 1998). Yet, there appears to be minimal research
available in terms of conceptualizing the issue from other ethical
theoretical
perspectives.

This
study
attempted
to
do
so.
Additional
research should be conducted to gain further insights. 
Specifically, empirically-based call center research is recommended

with respect to virtue-based managerial actions and
achievement of a covenantal relationship between call center
management and call center employees as related to EPM. 
Chun (2005) and Shanahan and Hyman (2003) provide two
related conceptualizations of virtue ethics.  These conceptualizations
can
be
adopted
to

gain greater insight into call center
employee responses to virtue-based managerial actions as pertaining
to EPM.
Furthermore, Van Dyne et al’s (1994) conceptualization of
covenantal ethics, later applied by Barnett and Schubert (2002),
could be used as way to gain more insight into a covenantal relationship
between
a
manager
and
an
employee
in
call
centers

where

EPM is used. Alignment with Herman’s (1997) conceptualization
of
covenantal
ethics
is
also
recommended.

Ultimately,
any
research
related
to
covenantal
ethics
should
attempt

to
focus
on
employee
trust
as
pertaining
to
EPM
in
call
centers.


McNall
and
Roch’s
(2009)
work
in
terms
of
trust
and
EPM
in

call
centers provides some key insight in this area.  
Regardless of the type of studies conducted, any future call 
center research should attempt to gain additional perspectives 
into making EPM-based performance evaluation a process that
is mutually satisfying to both the call center manager and the
call center employee.
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