Electronic monitoring systems are becoming a prominent feature of the modern office. The aims of the present study were three-fold. First, to assess the effects electronic security monitoring systems (ESM) have on the user's physiological state. Second, the researches aimed to examine the effects explicit security challenges have on both user behaviour and physiological state when using an ESM system. Finally, the research aimed to examine the effects one form of electronic performance monitoring system may have on the user's physiological state. To this effect, the present study examined the physiological and performance effects of two simulated electronic monitoring systems (security/performance). The computer task required 32 subjects to enter mock clinical case notes under various conditions. In the first session subjects were only required to enter the case notes while keystroke data were collected. The second session was divided into three discrete stages. In the "security baseline" condition, subjects were informed that a keystroke security monitoring system had been instituted, but no security challenges occurred. In the "security challenge" condition, however, a number of explicit security challenges occurred. In the final "performance monitoring" condition, subjects were informed that their data entry speed was monitored and they were placed on a response-cost schedule for poor performance. Blood pressure and continuous inter-heartbeat latency were recorded for the security and performance conditions. Results indicated that monitoring systems have the potential to evoke altered arousal states in the form of increased heart rate and blood pressure. Contrary to expectations, the hypothesized improvement in task performance within the performance monitoring condition was not observed. The implications of these results for the design and implementation of electronically based behavioural-based security and performance monitoring systems are discussed. © 1998 Academic Press Limited.