From the January 2010 issue of Entrepreneur

Apparently, more and more companies do: Last year, security monitoring software sales hit $13.5 billion, almost 20 percent higher than the year before. But don't be concerned with e-mails and chats if your staff is small and doesn't handle confidential information, says Kevin Beaver, founder of the Atlanta security consulting firm Principle Logic. "That's micromanaging," he says. Better to handle productivity issues and other matters face to face.

What's less discussed--but much more useful--is monitoring Internet usage. Are your employees spending more time on Facebook than handling clients? Are they using your network to engage in questionable activities? "A lot of managers say they trust their employees to do the right thing," Beaver says. "But as an outside consultant, I've found many situations where people are abusing their privileges."

If you do install the monitoring software, don't be stealthy about it. Sit down with your lawyer and HR manager and figure out a policy to introduce to your staff. Although there have been precedent-setting rulings that employers may monitor anything that's on-screen at work, employees also have won cases where their bosses weren't transparent enough about it.

And, Beaver cautions, don't turn the entire operation over to your IT department. Most businesses put the software in place and let network administrators run it day to day. Not good. "IT should help maintain the system," he says, "but having them be the judge, jury and executioner is a really bad idea." In the end, employee monitoring should be handled by management or an HR specialist--and kept at the highest level.