Bond or Bond free

Bond, more specifically "Employment Bond" what I think can have only psychological effect on employees. What I feel this phenomenon first started in the western part of the world particularly in USA. As per the law and regulation of USA this kind of arrangement between the employee and employer was acceptable. But some how few smart HR people started implementing this practice in India without understanding the legal, social and cultural issues involved in it.

According to Indian constitution bonded labor system was abolished a long time back and no one including any bond, whether he may be James Bond, can not force anyone to work against his wishes. This also include that the firm where the employee is working can not hold back any kind of personal documents of the employee. And any serious complain against the firm may land the top officials of the firm in jail or can be penalized heavily. But these bonds are applicable if the firm has spend money on the personal training of the employee. The bonds in IT sector that most of us are familiar with are taken on note that these IT companies are spending some amount of money on training of employees. Hence to cover up that amount these employees are required to work for the employer for certain number of years or else repay the amount of money that was incurred by the employer to train the employees. Hence we can say this employment bond is a typical contract made between the employee and the employer in addition to the terms and conditions of employment. So overall we can say this bond is valid if

i) employer is providing training to improve the skill set of the employee and also the during this process employer is spending some amount of time and money

ii) employer is bearing expense to send the employee abroad

Now the question arises why different companies have different bond amount or bond period.There is no specific arithmetic formula that companies use. But generally the companies defend themselves by saying that they keep this amount or bond period such that, the amount that they had spend on training and the utility that the employee would have brought to the firm is more than what they are demanding.

Now talking about my personal case, I too have to pay the some amount of bond fee when I left TCS. I was serving a bond of 2 years. But sometimes what happen if HR people see one employee is leaving to pursue higher studies then sometimes they relax some percentage of the bond amount to be in the good books of the employee. It all depends on the HR guys of the firm where one is working.

But there are few companies that don't have any bond period. Their approach is bit different, one of the firm which I know do this is by paying the employee bit less than the competitor offer during probation period and once you are through this period they increase your salary. But on a whole basic motive of the companies is to get back the training cost and the utility that these employee would have brought to the companies after enhancing their skill sets.

In todays scenario when on an average the attrition rate is around 17%, I think HR people find this as convenient tool to make the employees rethink on their decisions.

Regards,

Soumya Ranjan