An OECD study surveying over 6,000 firms finds that while software adoption to monitor workers is widespread globally, US employers deploy such tools to sanction poor performance far more aggressively than their European counterparts, a gap primarily attributed to differences in legal and regulatory frameworks.
- 67% of US firms use software to sanction poor performance, versus 4% in Europe
- US companies monitor work speed and communication tone at much higher rates
- Regulatory frameworks strongly influence software deployment in workplaces
What happened
The OECD conducted a survey between June and August 2024 with 6,047 companies across six countries, focusing on software usage for monitoring, evaluating, and managing worker performance. Adoption levels of such tools are high globally, with 90% of US firms using them, compared to around 80% in several European countries and only 40% in Japan.
However, the key difference lies in the application: 67% of US companies use these tools to sanction poor performance, contrasted with just 4% in surveyed European nations. US firms also monitor the content and tone of conversations extensively (55%) compared to only 6% in Europe. Many firms employ multiple software functions, whereas European companies tend to implement fewer, and Japanese firms typically use even fewer features.
Why it matters
This stark contrast illustrates how legal and regulatory environments shape workplace management practices. Europe’s centralized rights-based protections and consultation mandates ensure that workers and their representatives have a formal role in discussions about automated management tools. In contrast, the US follows a patchwork approach of enforcement by multiple agencies and local rules, which results in broader, less regulated use of such technologies in decision-making and sanctions.
Because many software tools used are standard enterprise management applications such as SAP, Workday, or Jira, rather than explicitly AI-driven systems, current AI-specific regulations may not provide sufficient coverage. This creates potential gaps in safeguarding workers from opaque algorithmic management practices that are widespread but not always recognized as such.
What to watch next
Continued regulatory developments in Europe, such as enforcement of the Transparency Decree in Italy and Spain’s Riders’ Law, are likely to influence employer adoption and governance of algorithmic management software. These laws mandate audits and worker consultation, setting a precedent for stronger oversight on automated decision-making at work.
In the US, the absence of unified legislation and weaker consultation requirements may lead to increased use of monitoring and sanctioning tools until regulatory responses catch up. Policymakers and labor groups globally will be watching closely to see how governance, enforcement, and technological scope evolve to protect worker rights amid rising workplace automation.