At work chatters

Once you get that Internet addiction, it can be hard to break the habit. SFGate has a Q&A column for business questions and today's item is about a co-worker who chats online all day long and doesn't get her work done. The recommendation is to enforce the policy that the computer belongs to the company, not the worker, and the use of the computer can be monitored. Also suggested is to install keylogger software. I bet there is a way to block chatting also, but wouldn't telling the employee that their chat sessions will be recorded be a step towards ending that?