We investigate how process monitoring and error avoidance policies affect process improvements. While prior studies focus on effort and performance when examining management control systems, we consider the identification and implementation of process improvements an important aspect of employees’ work. We develop a task for a laboratory experiment that allows testing for both identification and implementation, and investigate the influence of process monitoring on employee behavior. While previous accounting literature points out to negative effects on effort contribution, our task allows us to show that this does not generalize for the identification and implementation of process improvements. Instead, we find that in an autonomy-supportive environment without an error avoidance policy in place, process monitoring motivates employees to implement more process improvements. However, feeling controlled undermines the identification of process improvements. Our results have important implications for firms that use or consider using process monitoring within their management control systems.