What's the best way you have found to monitor telecommuting employees?

As someone who has managed multiple people (at the same time) remotely over the past four years I can say that it is not about "monitoring", it is about communication. There needs to be constant and quality communication. It helps to use Skype and other tools like GoToMeeting that allow virtual "face to face" conversations as body language and expressions can be important.

It is about staying aligned on expectations and making sure that employees feel comfortable "reaching out" if they have any questions, concerns or encounter any obstacles (real or perceived). Note that it does take a real commitment to define and manage the right amount and types of communication that each remote employee needs to maximize his or her productivity. Studies are showing that remote employees are the most productive, and the key to that is communication.

I agree with Ernie. Telecommuting is a great option for employees. Just be aware of some issues, that are the responsibility of the Manager to overcome --

Issue 1 – Employee Exclusion - “Employees in virtual environments may develop perceptions of exclusion or isolation due to their need to rely on technology to communicate with others; common forms of communication technology (e.g., email) do not provide a high level of information richness and can inhibit social exchange (Marshall, Michaels, & Mulki, 2007).” (Cornell University study Remote Work: An Examination of Current Trends and Emerging Issues Spring 2011)
Issue 2 – Remote Responsiveness - “Some remote employees struggle when attempting to coordinate their work with their managers and other employees or when attempting to receive timely feedback.” (Cornell University study Remote Work: An Examination of Current Trends and Emerging Issues Spring 2011)

I wrote a blog regarding this subject - "The Value Embedded in Telecommuting" (cfotips.com/?p=15) at www.cfotips.com.

Equally as important is training your managers how to manage employees who are remote. Is the manager able to make the employee feel included in the company. It involves even seemingly small issues such as announcing who is on a conference call, when people leave or enter the room during, whether in person or on the phone does the manager direct their full attention to the employee when the employee needs to meet with them.

Establishing regular times to hold meetings, making sure the you and the employee meet face to face monthly or quarterly helps establish that relationship.

Remember, office environments contain as many temptations for time wasters as the home office and mom's old advice to treat others as you want to be treated still holds.

All of the replies hit on the same key topic: Communication. My current employer is completely staffed by "remote" employees in 5 different states and 6 countries. All of us work from our homes and use cloud based software for our key systems. Communication that causes employees to feel connected to and valued by the company will generally result in responsible conduct. Naturally, employees need to be held accountable for results as well. Notice this is true whether you are managing a remote employee or an individual who sits in a cubicle outside your office.

Daniel makes a point that many employers miss when they build "telecommuting" policies.

What really is the difference between telecommuting and having small field offices spread throughout the [country]?

I've heard the argument that it's different (how?). While some employees need to be at certain collective meeting points (ie, warehouse etc), others don't. Look at what works best for the a) company, b) employee and c) bottom line.

Communication is the key, accountability and to use an old term MBO.