Effectiveness of Employment Bond

The concept of employment bond was popularized by the IT firms in India. Most PSU does also have this concept of employment bond. But the question that arises is on what basis is the value of the bond and the duration of the bond period derived. Perhaps the availability of labour in labour market and the investment in learning and development are the primary determinants. Different projects, assignments require a different competency and hence warrant a different level of protection against attrition. The other question that can be asked is why all employment bonds apply to entry level and junior level jobs . Perhaps this could be due to the fact that the companies want to recover the cost of investment in training incurred on the trainees and hence justifying the cost of the bond. So this can be attributed as an incentive compatibility constraint from the employer’s perspective. But why is employment bond not imposed on senior professionals? They are also imparted orientation programmes and they do go for different workshops from time to time. This may be due to the fact that if the bond is imposed on the senior officials, that may result in the official resigning and joining other firms on a more responsible role and good package which is a avoidable opportunity cost for the present firm. The concept of this employment bond where the employer really wants the employee to stick with the organization and contribute to the fullest shall be done by other means which can create the conditions as intended by the employment bond. In my last organization the employment bond I signed was quite mutual in which it was stated in the bond agreement that whatever cost would be incurred in my training , that amount has to be reimbursed by me if I quit before completion of 2 years of my employment with the company. This sort of bond is quite transparent in the sense that it is clearly mentioned as to why a certain amount is to be paid in the event of not adhering to the employment terms. So according to me the employment bond has become somewhat inevitable in the industry as a mean to curb attrition and to recover the huge training costs incurred. But at the same time it should be flexible and transparent from the employee’s perspective .The bonds of the likes introduced by Wipro as has been mentioned by many in earlier posts do deter many fresher to join Wipro and I was one of them. Moreover many of my friends who worked with Satyam just left the company without any prior notice and nothing does really happen apart from few mails reporting them as absconding, the height being that that even continued receiving salary for two months after they left. So there should be a more structured way of such bonds in India so as to ensure their effective functioning.