Bond or no Bond??

Bonds are simple instruments that companies use to ensure their return on investment. But it is very important to note where they exercise it. Bonds however restrict freedom of movement of the employees. This is not justified. However from the company’s perspective, they spend a lot of money on training employees who leave the company with the knowledge to a competitive firm or for further education. Thus we see that it’s a sort of necessary evil. If we answer a few questions we can increase and justify the usefulness of bonds:-
1. Why are bonds of some companies accepted readily by employees and not others??
Because if the job or the pay is ensured to be good, the employees don’t mind signing the bond and invariably show the loyalty to the company.
2. Are bonds really necessary at the entry level?
Bonds are justified from the company’s perspective at the more strategic positions where they require people to stay for a specified amount of time. However can we restrict employees at the lower level from movement? The question is difficult to answer. The companies spend huge amounts (mainly because of the huge number of employees) in training but fail to provide good work to many of these employees. Also the companies have an advantage from the asymmetries in the exchange relationships. A company can more easily replace an employee for the same wage level than an employee securing a new job
3. Are companies really justified in asking a penalty for breaking a bond?
Companies let go of employees who are still serving a bond by asking for a penalty which they claim is the cost of training of the employee. However when an employee leaves unexpectedly a replacement is found through a lateral entrant to the company from a competitor company with the acquired skills and experience. In that case, companies should rethink about the nature of bonds, its subjectivity and therefore the penalty imposed on employees looking out for better opportunities.