[LloydPickering]

If they went back and looked at business theory from the 20s and 30s they might have come across a famous phenomenon called the Hawthorne/Observer effect http://en.wikipedia.org/wiki/Hawthorne_effect

Basically, when employees are being observed (which you could read as under surveillance) their productivity improves.

Rather than suggest we turn into a panopticon loving society, it speaks to me that restaurant owners should in fact be paying more attention to their staff, and creating a workplace where they feel valued. This should improve productivity, and reduce turnover - but maybe my perspective is skewed because of the differences in being a restaurant waiter/ress vs a software dev.

In any case, if you want better profitability then why not incentivise staff? If they have a share of profits, then you can be sure they will be trying to maximise profits - including reducing wastage, up-selling and reporting other members of staff not pulling their weight/stealing.