Are Bonds necessary deterrents? Efficiency vs Effectiveness ...

The question I had opened in the last post regarding Bonds is "Are bonds a necessary deterrent ?'.

Well, as Prof. Ganesh rightly points out "it is not about the efficiency but the effectiveness".

So, let us see if bonds are effective.

1. As we have already seen and discussed over a thousand times, almost all the logical framewrok like Covenant per se in invalid approach, Presumption against enforcement approach, Reasonable Restraint argument, Mutuality of Obligation, Acting in Bad Faith Approach, etc show that it is not easy to get away with bonding forcefully an employee and slamming a court case in case of breach!
2. And, moreover this never helps in your productivity as an employee who has an offer at hand lucrative enough will somehow leave the organisation or current employer.
3. Moreover, even if the cost is more than the benefits of a switch, the employer who is forcibly staying for a longer period of time or till the bond period is over, would not be able to give even 30% effective value to the organisation.

So, typically, the bonds may be efficient as a deterrent and in achieving Break Even for the incurred training costs and in case like in most IT companies where the job profile for almost all engineers is similar and there is actually a need of workforce to do the more regular monotonous and technical jobs, Bonds are never effective.

And effectiveness is what matters. Carrying forward my argument and support of Karan's well put premise that Bonds are necessary where IP rights and costs are huge, training or specialisation delivered in very unique and of breakthrough market capability, etc bonds are necessary - I would say that bonds can be made to confirm with all those frameworks.

The managers should concentrate on framing bonds to protect the knowledge assets they own rather than on focussing on it being foolproof to legal terms.

Managers should foster linking jobs to qualifications and attitudes in innovative ways like Google and Pagalguy, than making it binding upon employees to stay forced. In IT companies, cos could have bonds for say, a particular project period or give employees the choice to pay for their training onsite in EMIs from their salary and work without serving any bond period. Cooperativeness, compassion, participation can all bring about ownership feeling and loyalty towards an organisation.

This is the only constructive win win situation by me. After all, who thought emerging from the monopolist Microsoft era, there would be this revolution of high tech computer engineers starting some free software development and distribution movement known as Open Source !

Just an analogy ....