Bond is a word that can evoke two kinds of responses in an individual – the bond that means to be enslaved and tied, and the bond that implies a union or a kind of closeness like bond of friendship or love. In our present scenario, the word probably has different meanings for different individuals depending on how they are linked to the bond. An employment bond might be explained by the employer as an agreement of loyalty. To the employee it may come across as a restraining chain much like ‘bonded’ labour.
What are the reasons for an employment bond? As Nehal has pointed out – it is basically to reduce attrition rate. We find that companies (especially IT companies) take freshers from college and incur huge costs in training them. These individuals may take the training and then quit the company. This is one of the main reasons why companies insist on making employees sign an employment bond. In this manner the company tries to make sure that it covers the training expenses. By making an employee sign an employment bond they also try to ensure that the person will not quit the company, and even if he does, he will have to pay a compensation price. The most common employment bond is like the one stated in the story about Chutney Computers.
Will an employment bond ensure lower attrition rate? If an individual wants to quit his job for greener (from his point of view) pastures, can a bond deter his decision? I do not think so. He will probably be willing to even pay the amount if need be to get out of the situation. As Ninad has mentioned, a bond is simply a piece of paper for people who want to quit. Another point raised by Roopinder is that the bond is only a financial liability. It does not work to keep any individuals back, the employees just think twice because of the money to be paid. Moreover, companies in most cases cannot take any legal action if the bond is not paid. The employee can fight for his rights and ask the company to justify the amount in a court of law. As Sumit has mentioned most companies do not even try to retrieve the bond amount. According to the Indian Statute (stated by Mitali), no one can be made to work against his wishes.
Often we find that the training provided in companies is not even worth all the hue and cry. The bond amount is quite a random number. Santosh has raised a pertinent question – how is the amount and duration fixed? Is it based on break even analysis? Cost benefit analysis? Or is it just a random figure depending on the whims of the company’s HR managers? Can Wisdom justify its bond for Rs. 100000 for 1 year? Can RumDal prove that their Rs. 200000 figure for 3 years is fair? These numbers often discourage bright students to sit for the interviews of companies (as pointed out by Subhra). According to me, the company should be willing to answer any questions that are raised on the employment bond particulars. Why should I sign anything without understanding the intricacies? I should feel I am part of a fair deal. Only then can the company expect integrity and loyalty from me. Even if I think the amount is too large for me to pay and there is no way out, I shall just wait for the stipulated period to get over and then quit. This way the company does not gain anything in terms of loyalty. The employees have to be retained beyond their bond period. If every person just fulfils the bond duration like a punishment and then desserts the company, the company holds to lose more than gain anything!
Soumyo has spoken about loyalty from the employee. I do not think ‘bond’ing the employee can lead to any loyalty. As I have mentioned, at the most it will keep the employee from quitting within the bond period. As soon as the period is over, he will hand in his papers. Will that help the company in the long run? Loyalty, respect, integrity are virtues which have to come from within and cannot be enforced upon anybody! If anybody on earth starts thinking he is in a cage, then everything outside that cage will entice him and will provide the impetus for him to break free! “The moment the slave resolves that he will no longer be a slave, his fetters fall. Freedom and slavery are mental states.” – Mahatma Gandhi
A bond never provides any comfort to the employee. Let us consider a case where the individual undergoes training and performs miserably at work. Will the company think twice before showing him the door? Does the bond hold the company back from firing an incompetent employee? Similarly the bond is not strong enough to hold on to an ambitious employee who wants to set out. Companies have to realise that they should make their policies, offers and work environment congenial and fair. That way, the employees will want to be a part of the company and it will bring about a feeling of loyalty naturally. If a person is made to feel at home, he will reciprocate and deliver the services expected out of him and will want to serve that company for a long time. If one is made to feel like a prisoner, his natural tendency will be to get out of it and free himself.
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