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It is absolutely, perfectly reasonable to log and monitor your staff, and is accepted practice. I doubt too many of them (if any) pro-actively comb through the logs, but having the logs available in case of a complaint against said staff member is critical, or it's the staff member's word against a player's.
If you choose good staff members and make them work their way up from few privileges to greater privileges, you should rarely have to look at logs. When I was still running Achaea, I might have cause to look at the logs of volunteers no more than a handful of times per year.
--matt
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