Bonds …. Not strengthening employer-employee relationships

During the final placements during my engineering we were given a list of companies, and most of us opted of companies which had a bond to be signed, generally a contract indicating some terms like if the candidate quit within 2 years of joining he/she would have to pay a fine of around 2 lacs to the company. Now with competitive markets and graduates thinking about pursuing post graduation the companies would not be getting the best of the talent and candidates would not be willing to forsake their mobility by signing a bond. The company on the other hand should not be using such instruments but rather have an open employment contract and encourage talent to join in where they would get an opportunity to show the company’s talent pool and how good the company is, and in a way to secure interested candidates. So instead of encouraging and creating an environment for candidates to join the companies are discouraging them by the way of bonds. Interestingly bonded labor is abolished and I think India does not allow bonds as a form of contract. However many companies are following this and discouraging candidates. Looking at this from the company’s point of view they would want the individual to be committed to the organization when he/she joins and at times like when he/she gets an appraisal, at all such cases the company would be investing a lot of money on the individual and the fact that the individual is leaving the company would mean that the amount of money spent on the individuals is a waste. For this reason companies have introduced bonds but this is basically discouraging good people rather than getting commitment from individuals to stay on for a long time. The best thing for a company to do would be to use components in the management/compensation system that would encourage all employees in the long term and the short term than formalizing bonds which employees would be apprehensive to sign.