Can an Emotional Bond Work?

Having spent close to 3 years in the IT industry, I have closely seen many of my peers in the IT industry undergoing immense trauma, both financial and mental, due to legal bonds in their respective organizations. Indian IT majors like TCS, Infosys, Satyam feature prominently among the list of organizations where the entry-level employees need to sign a bond before they join. Many of my peers had to actually pay large amounts of money to their organizations as they left for some reason or the other. But amidst all these, I consider myself fortunate enough to have worked in an organization which did not require us to sign any bond. Cognizant has always maintained that it does not believe in binding the employees in shackles of bonds, not even during the time when the economy was facing a major downturn. Rather, Cognizant has always believed in creating an emotional bond around the employee, by which each employee would think at least 5 times before (s)he takes the final call on separation from the organization. And having been an employee of the organization, I honestly believe that the policy of ‘emotional bond’ indeed worked, as I had to question myself again and again before I took the inevitable decision of taking the plunge.

Cognizant, with a global strength of more than 65000 employees, is having an attrition rate which is at par with the industry standards. Its 2009 Q4 attrition rate stood at 11.2%, which was among the lowest in the Indian IT industry. Other IT behemoths, with legal bonds for entry-level employees, had attrition rates which are equal or higher than Cognizant’s. The fact that Cognizant has a low attrition rate, despite not being one of the highest payers among IT majors, proves that the employee policies followed in the organization are actually being liked and appreciated by the set of people for whom they are meant. Moreover, Cognizant stood tall as one of the few companies which did not resort to downsizing during the recent economic slump, and at the same time maintaining a very steady growth rate.

I understand that in today’s competitive world, employees are always on the lookout for greener pastures. In an attempt to scale up their pockets, employees end up dumping one organization after another, in a very short span of time and that is why organizations are increasingly employing bonds as an option. However, these bonds are often misused under the garb of cost recovery. Rather than actually stopping the employees, these bonds end up creating more legal hazards, both for the employer and for the employee. If Cognizant can succeed without using bonds, why is it so difficult for other organizations to hold on their employees? At the end, everything boils down to the employee policies followed in the organization. If every employer follows the idea of an ‘emotional bond’ with its employees, then may be the day is not far off when the legal hazards of employment bonds would be consigned to the flames of history.