A new survey of 520 New Zealand companies has found that 67 per cent have no policies in place to regulate staff use of social media websites such as Facebook and Twitter.

It comes as a leading employer group says more businesses are having increasing problems with workers using social networking sites to badmouth their bosses.

The survey, undertaken by Manpower, US-based global recruitment company, says 76 per cent of the New Zealand companies that have a social media policy in place indicated that minimising productivity loss was the chief benefit.

Forty per cent of those companies reported that having a policy also helped protect intellectual property, and 40 per cent also reported that the policy had helped protect the company's reputation.

David Lowe, advisory services manager for the Employers and Manufacturers Association (EMA), said the EMA was doing its own research around the legal technicalities of employees using social media.

"We will be giving advice to employers shortly about whether the standard employment provisions we have cover [social media] or whether we need to be doing more," he said.

Lowe said companies were increasingly approaching EMA with problems arising from employees using social media, such as workers making negative comments about their employers on their social networking pages.

"What we have been dealing with more recently is former employees who make their views known [online] as they depart under unhappy circumstances," he said.

The situation was more difficult when a former employee decided to make a social media attack on a former workplace, but Lowe said a simple phone call, and a request for the comment to be removed, could solve the situation.

"Before bringing in the lawyers ... before going too far, that can be the first step," he said.

Lowe said employees' use of social media had the ability to damage a firm's reputation, and was an area where the usual clauses in employment agreements and "house rules" sometimes did not apply.

"When [the employment agreements] were written social networking wasn't really thought of."

But he said the loss of productivity from employees using social media was not a big issue.

"Most employers block [social media websites], so employees can't access them during working hours. Those employers that don't block these websites would certainly monitor them."

He said a "reasonable balance" needed to be found when it came to employees engaging in personal activities at work.

Ursula Cheer, a media law expert at the University of Canterbury, said the same defamation laws that govern the mainstream media could be applied to users of social media.

"The fact that it's on Facebook and you are ostensibly talking to your friends doesn't make any difference, your publishing widely, and [to be charged with] defamation you only need publish to one other person," she said.

Cheer said for comments to be considered defamatory, they would have to lower a person, or company, "in the minds of right thinking people".

Possible defences could include the defendant arguing that the comments were "honest opinion," she added.

Despite the problems that can arise from workers using websites like Facebook and Twitter, there may be benefits for businesses having workers in the social media sphere.

The Manpower report says social media can keep employees "emotionally engaged" to the organisation's "mission and vision", assist with recruitment, build brands, boost productivity and help workers collaborate with other people in their field.

Manpower recommends that organisations exploring the possibility of implementing a social networking policy should design guidelines that allow the business to also take advantage of the potential benefits of social media.

Simon Young, social media consultant and co-founder of iJump.co.nz, said social media could be used to reflect the culture of a company. He used US online shoe store Zappos.com as an example.

"[Zappos.com] is known for its staff of around 400 who all tweet [use Twitter] to represent the brand," he said.

Young said social media could be a powerful marketing tool.

"If you have got a vibrant culture and you are actually empowering staff to represent the brand in their own way, it's a marketing opportunity, because when you experience an individual's point of view it's more real than what the advertising agency says."

He agreed there was the "flipside", where a negative work culture could be reflected on social networking websites, and confidential information leaked.

"I sort of liken it to when phones were first introduced into businesses, there must have been the same kind of anxieties with that," he said.

Young said some managers needed to be educated about the way their workers used social media. One worker he knew of had been "pulled over the coals" for making a "playful remark" about his company on Twitter.

The management of the company failed to find the comment amusing, Young said, and did not realise the employee's Twitter account was personalised to him, and only his followers would have read his remark.

"When you don't know a whole lot about [social media] the whole thing seems a bit threatening and scary."

The BBC's new director of global news, Peter Horrocks, has told his staff they must "embrace" social media, the Guardian reported.

"This isn't just some kind of fad from someone who's an enthusiast of technology," Horrock's told the BBC in-house weekly Ariel. "I'm afraid you're not doing your job if you can't do those things. It's not discretionary."