Years after every family in America has been immersed in the Elf on the Shelf ritual, I have finally discovered it, thanks to an hour of bored browsing on the Internet. I now understand the concept. The elf materializes in different places in the house every morning and reports to Santa when the children in the household are being mischievous. When kids sneak a cigarette or have one of their father's beers without permission, the Elf reports to Santa and this can impact their take on Christmas day.
I can see how it may also be used in the office. The secretarial assistant talks a little too long on the phone. The clerk spreads rumours about the Vice President in charge of operations. That night the Elf tells the CEO and this reduces the worker's Christmas bonus. I can see how the Elf on the shelf could also become the Grinch on the shelf.