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Abstract: Electronic monitoring is a rapidly growing phenomenon in Sri Lankan software industry. It allows employers to observe what employees do on the job and review employee communications, including e-mail and internet activity that employees consider private. Often, employers use electronic monitoring to ensure organizational confidentiality, limiting employer liability for employee misconduct. From the perspective of employees, electronic monitoring by employers involves several privacy and confidentiality concerns. Most of the time, employee performance and productivity aspects captured via electronic monitoring are effectively used by the Human Resources Departments, for decision making associated with the employees. Majority of the software development organizations in Sri Lanka today use some means of electronic technology to monitor their employee activities. Most of the time, employee perception towards electronic monitoring at work, contradicts with the need for law enforcement within the organization intended by the top management. Employers justify electronic monitoring at work place in terms of protecting the company’s confidential information, preventing the misuse of the organizational resources while uplifting the quality of work and productivity. On the other hand, the mutual trust that should be there between the employer and the employee is in question. Therefore, this study empirically investigated the relationship that might exist between the software professionals’ perception towards electronic monitoring at work place and its impact on their job satisfaction. Based on disproportionate stratified random sampling, data were collected from 380 software professionals in Sri Lanka, by administrating a structured questionnaire in which items were of 5 point Lickert scale. The data analysis included the univariate, bivariate and multivariate analyses. In this study, Perceived Relevance to Work and Personal Judgment of Effectiveness which were two variables used to measure perception of electronic monitoring were positively correlated with Job Satisfaction. This means that the software professionals, who view electronic monitoring as something which is relevant to their work as well as which uplifts the quality of their work, are satisfied in their jobs. Perceived Invasion of Privacy was negatively correlated to Job Satisfaction, which sheds some light in organizational electronic monitoring policy making. Also, Perceived Task Satisfaction was negatively correlated to Job Satisfaction. This means that the software professionals, who thought that working in an electronically monitored environment makes their tasks more complex, are rather dissatisfied in the job. Also, it appeared that the impact of electronic monitoring at work place on the job satisfaction of software professionals becomes less significant along with higher professional experience. The findings of this research can be incorporated in IT security policy making in the software development organizations in Sri Lanka and in similar economics, with a special emphasis on the job satisfaction of their employees, which is the most valuable asset of the organization. [Copyright &y& Elsevier]