bonding by force

If the only tool you have is a hammer, you tend to see every problem as a nail.– Abraham Maslow
Well this is what the companies today are seeing as easy option to tackle the problem of retention. The hammer used is forcing employees to be under employment bond contract. This concept of the binding employees for a certain period is not new. History has witnessed this in feudal times, though in a different context, as bonded labor. In bonded labor, the entire families work for certain period (usually infinite) to pay back the liability. While in employment bond the employee has to work for a certain period to pay back the liability of training expenses spent on it. The consequence of breaching the bond is usually to pay a huge sum of money.
Before being part of an organization, when the employer asks the employee to sign a bond of certain period, it sends the signal to the employee that the employer doesn’t trust him/her. How can a relationship be build, if before the formation of it, the basic element of trust is at stake? Loyalty cannot be induced by compulsion. As the quote says “There are only two forces in the world, the sword and the spirit. In the long run the sword will always be conquered by the spirit.” The spirit is important to retain the employees rather than the force of sword. As Ashish Sehgal has mentioned in his post, the employer might lose out on key talent due to the employment bond contract acting as a deterrent.
Moreover, signing bonds every time the employee is sent on overseas training or work makes the employee feel as outsider to his company. This may not result in full commitment and dedication towards work.
In Pepsi vs. coke case, the Delhi high court gave verdict that employees have fundamental right to look for better job opportunities. Then why do companies restrict them on doing so? One point which Santosh Kumar durai has suggested in his post is that Companies can justify this bond on the basis of recovering their training expenses until the breakeven point ( i.e the point at which the training cost is recovered by the work contribution of the employee). But, such breakeven point is difficult to measure and subjectivity comes into it. Only because of few individuals who leave the job early, penalizing the entire workforce with a strict employment bond doesn’t sound reasonable.
In case of army , where the contract ranges from 5-10 years , many of Indian Army Officers are working in the institution against their wills but as a bonded labor( as cited by Daily Mail). The Officers sign a bond while joining the army under which they have to pay a huge amount of money to army in case of quitting the job, they do not dare to do so due to poor financial conditions but work with a dead heart after being posted to duties at stations like Kashmir. These findings indicate that even young female commissioned officers are no exception in this direction. A female officer of the Indian Army committed suicide by shooting herself in headquarter of the army's Northern Command, a couple of years back, as she was "dissatisfied and unhappy with her job". She wanted to quit the army but could not do so as "she had to pay the bond money to the army". This clearly shows that in such an institution like army where loyalty is very important, a bond cannot induce it rather has severe ramifications like suicide. Moreover, Can the employees give full commitment to their work when their soul and heart is not in the job at hand?
Employment bonds are mostly pro-employer. Many of the posts have clearly mentioned the employee’s perspective. There are many reasons why the employee would want to change the job before the bond period. Some of them as reflected through the posts are higher studies, better job, unfavorable working conditions, marriage, cultural misfit, disliking the present job etc. There can be also a situation where in a company lands in bad shape and employees want to quit. Would company dissolve the bond in such a situation? Well Satyam relieved its employees from 2 year bond restriction. Not all companies will go for such wise decision. In that case the plight of employees working in these firms would be pathetic as they would be forced to work in unsecure conditions. Moreover, In case of HCL where the employees were forced to resign, would such resignation be considered breach of employment bond and hence penalized (in monetary terms).
As Binayak has mentioned in his post: (No matter how stricter the bond is) Bonds do not assure lower attrition rate or increase in loyalty. They work other way round. Cognizant has no bond but its attrition rate is 11.2% which is comparable or even less than other IT majors like Infosys(11.6%), HCL (12.8%) etc. Moreover, as many posts have mentioned breaking a bond is a common phenomenon in IT companies.
So what I feel is that if some companies can do away with bonds, bonds are not necessary requirements. Rather than bonds, better strategies like excellent working culture, good pay, respecting employees, giving growth opportunities, stock options induce loyalty and help in retention of talent force. Regarding the question of loss on investment money and time spent on training the employees who leave the job early, the economies of scale achieved on training the employees retained would cover the loss of disloyal employees. If it doesn’t then company should be ready to bear that loss as bad debt which is inevitable. I would like to end using a quote: “The glue that holds all relationships together - including the relationship between the leader and the led is trust, and trust is based on integrity.” So, Trust should hold priority in building a strong employment relationship.