Let me first tell you a story- the story of my childhood friend-a bond who was bonded by a bond. And no marks for guessing the firm- its ASATYAM . The bond gets the joining letter. Rather being ecstatic, he was sad because ASATYAM had asked him to pay Rs 200000 to get bonded with a bond for 2 years. He went for the loan arrangement of SBI. Then received the training for 5 months after which ASATYAM said he would get a project. He waited and meanwhile was pushed on to the bench. He waited and waited for project calls, alas none came. Then Raju made that (in) famous confession and all dreams of our bond got shattered. Still he waited and finally got a project call after 2 years and 2 months.
Way to cover costs? Well many of my friends have said that employment bonds are a means to cover a portion of training costs (I would say variable training costs) by the firm. The bonds are not only meant to recover investment made, but also discourage the employee from switching to another company immediately with the knowledge gained in current organization.
But in the above story Mr Bond was made to sit on the Bench for 21 months. During this time he had got many other firms’ offers but couldn’t switch because of the Rs 200000 caveat. But after 26 months he gets a call for a project and is trained again for 2 months on a new technology (additional costs). So did ASATYAM really recover the training cost? I guess it incurred more costs as Mr Bond was playing table tennis and swimming all these 26 months and he was being paid the full salary to do so.
I think this story suggests that some of the Indian management practices are archaic in nature and I agree with Ashish. These have to evolve. In this case it would have been mutually beneficial had ASATYAM not bonded Mr Bond . He would have gone to another firm and not waste his time on bench and ASATYAM would have incurred much lesser costs.
Culture & best practices and an emotional bond-Some of the most respected companies don’t have employment bonds. Microsoft & Google don’t have. And these companies pay 3-4 times the salary paid by SWITCH( Satyam Wipro,Infy,Tcs, Cogni and HCL). Their training costs are exorbitantly high. But it is something about the culture and best practices. They foster such an environment that employees develop an emotional bond with the firm and happy employees means more profits. This bond is a much robust and stronger bond than the employment bond and in a real sense it helps in curbing attrition. As Subra had correctly pointed out, students don’t want to join firms with employment bonds and rather love to join such firm like MS, Google or CA for this reason.
Why to put the sackles ?
Firms want to cover the training costs and hedge against attrition. And so they come out with employment bonds. But we have already seen above, how counterproductive it can become. I think we need to tweak the practices. In situations where a bond has to be there, we can follow practices of global firms. Mr Vipul Singh- Head HR Hyderabad Accenture says-“We at Accenture tread very cautiously with bonds. We don’t want it in the first place but in India we have to go ahead with this practice. But ours is different than the others. We try to develop an attachment with the employees using our culture and vision. We know using bonds we cannot put a cap on intellectual capital. We are very flexible with the terms of the bonds. Our bonds vary based on the technologies on which the software engineers have been trained on. It’s Rs 150000 for ERPS and Data Warehousing and as low as Rs 25000 for UNIX and C++ for a 1 year period. Also our bonds work on a prorated basis. If he/she quits before 6 months, he/she has to pay the entire amount. If the employee has worked for more than 6 months, he/she would be asked to pay the amount corresponding to the no. of months left wrt the bond period. Moreover we give relaxations if the employee didn’t get a project call in this period.” Having worked with the firm, I can say Accenture does practice this culture. I think other firms can follow such global healthy practices and learn more in this regard.
1 comment:
I agree with your point wherein you state that the policies in the companies need to evolve, and currently they are very archaic in nature. But then, they need to emulate the companies like Google and Microsoft. These companies have a huge brand name. But then, so do Indian companies like TCS and Infosys too!! So, why are they following these age-old practices in India, though they know that the Indian Law does not have any provision for bonds, and in fact has banned it in any manner? Also, why isn't any one raising this legal issue in the court? Is it because no one wants the hassles of fighting against these huge giants in the court?
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