"Bond" - Expression of Attachment, Insecurity or Just Another Cost Recovery Policy?

“Bonds” – this option has been primarily exercised as an expression of their bargaining power. Strict enforcement and mandatory signatories among all fresher recruits, while discretionary exercising for the lateral entrants to an organisation – reflects on the bargaining power balance in employment patterns. As quoted earlier by Shruti, bonds amply reflect the Stockholm syndrome. For fresh recruits bonds have mandatory signatories perhaps reflecting the insecurity of organisations with respect to talent retention due to the limited growth opportunities presented. Bonds are in this case a measure of cost retrieval – specialised training and induction costs for the recruit are ensured to be recovered during the course of bond period. However for recruits with considerable experience, there is polar shift – where the bargaining power resides with the employee (there are even multiple instances where employees are instigated, lured with better opportunities and thus deliberately asked to break the bonds – bond amounts being paid by the prospective organisation). Thus such a bond implementation scenario reflects that bonds are being used to authorise bargaining power and a subtle reflection of organisation’s insecurity with limited growth opportunities that it provides. Several other instances of bond enforcement probes to speculate whether bonds are just about ‘an attachment token’ or ‘an expression of bargaining power’ or ‘cost retrieval financial measures’.

Several other manifestations of the bond are also evident across the industry. For example, an employee opts for a sponsored academic program enrolment – in this case he is a signatory to a bond which mandates serving a predefined period in organization upon completion of the academic program. (Case in point would be the PGDM-PT program by XIMB, where executives have been sponsored by corporate). Such a scenario poses bonds as obligatory commitment on employees’ part (for providing the finances as well as employment guarantee along with commensurate compensation post the program completion). There have been instances when sponsored students have returned to their previous employer as a mark of their obligation to organization (in spite of the absence of any mandatory enforced bonds). This is reflection of the higher level of satisfaction that the employee enjoys with the policies and culture. This reflects on the emotional connect in the employment relations rather than a legal one (there are no prizes for guessing the superiority of one over other).

There are also instances with certain organizations which pay retention bonuses to fresh recruits for completing bond periods (my prior organization Wipro had this policy of retention bonus payout upon bond period completion -15 months in this case, while Jindal Steel pays a bonus of 1 lakh – bond period in this case being 4 years). It leads to speculate that organisation values loyalty – while the same policy isn’t applicable for experienced recruits, thus reflecting the inconsistencies in employment relations with regards to the hierarchy of an employee.

At a personal level, during my initial days at Wipro (after completion of bond formalities, of course), I was made to forcibly avail a bank loan (interest amount for the loan for each month being deducted from my month’s salary). It is the bargaining power balance and the lack of alternatives for me initially that kept the scales in favour of my employer (although monetary constraints due to forcible imposition of bond can be reason for potential legal hassles – which of course I had to avoid to keep myself clean of all such mess).