Bond for knowledge workers: From the examples, it can be observed that bonds are not implemented for all kind of roles in the company. The most general application of an employment bond is for knowledge workers. This serves the dual purpose of controlling the attrition rate as well as preservation of skills which might be rare and are precious for employer. Basically, bond is being used as a barrier or negative force to retain employees.

The more precious the skills of the employees are and the more strategic the role of the employees is, the more likely it is to have a higher bond amount or a higher bond period. For ex, in case of IMFL Group, for Management Trainees and Graduate Trainees, the bond requires payment of Rs 100,000 if the employee leaves within 2 years including the training period of 1 year. However, for the power plant trainees who are basically electrical engineers and are very strategic to the company, the bond requires them to a pay a sum of Rs 1.5 lakh for the same 2 years. For Diploma Trainees, the amount is Rs 50000.

It has already been discussed in the forum that implementing employment bonds is not the solution to the attrition problem and various reasons has already been provided for the same. As Subhra says, “Many freshers quit every year and they do not even pay back the amount they are needed to pay TCS if they are breaking the bond.” However, at the same time there are many who actually paid the bond money to TCS before leaving the organization without serving the stipulated bond duration of 2 years. The company makes it very clear that your full and final settlement of the account won’t be initiated of you leave without paying the bond money and you won’t be issued an experience letter. Therefore, though there are many who leave the organization without paying, there are also employees who leave only after paying. This may help the organization in recovering at least “some of the money” it invested in the training of those employees. This “some of the money” can be huge sum of money in case of organizations like TCS, Wipro, Infosys etc. where in they train a large number of freshers every year and the attrition rate is also very high.

Also, if an employee leaves the organization in the middle of the project, that may cause significant losses to the project and in turn to the organization. Therefore, the companies resort to implementing employment bonds and notice period. However, it is basically like implementation of negative forces to prevent undesirable behavior. Say for example, we always see “No smoking zone”, “Do not sit here”, and many other similar notices of the like. However, had it been implementation of positive forces like “Sit here”, “smoke here”, it might have been more effective in getting the desirable behavior. Similarly, incentives can prove more effective in controlling attrition rate as compared to employment bonds.