Various issues related to bonds

Do bonds exist because companies undergo training and hiring costs?
I would differ from what Mitali has said. Just because company incurs hiring cost it cannot impose a bond. Company incurs costs in hiring laterals as well; however there are no bonds on these employees. Training is an investment on the employee which the company need to recover.
Could the employer use bonds as a pretext for giving poor performance appraisal to the employees, as sudip pointed out?
If it does, the employer would be acting in bad faith and its motives could be questioned.
How is the value of the bond arrived at (say 50000 or 300000)?
This is a grey area. It could vary depending on the intensity of training, term of the training as well as the facilities provided during the training period. Companies like Infosys provide wonderful accommodation and other facilities and thus have bonds worth 100000 as compared to 50000 by TCS.
Breach of bond:
In case an employee breaches a bond the employer should charge an amount on a pro-rata basis. Charging the whole amount even if the employee quits the organization one day before the bond period ends doesn’t make much sense.
One of my friends joined a major IT MNC as he found that the industry was not suited to his skill set. He quit the organization within 10 days. There should be a provision for employees if they don’t like the work and quit the company within a small time (say 15 days) then they need not pay the bond amount.
Enforcement of the bond:
While some companies charge the whole amount before hand, it is usually difficult for graduates (having educational loans) to pay huge amount upfront. In case an employee quits after the bond period and the bond amount has been paid in the beginning the employee should not only get the principal but also the interest.
Will bond reduce the attrition?
Bonds might dissuade the best candidates who would like to switch the companies if they dislike the job. Also it doesn’t ensure that employees wont quit the job. The employees who are not economically well off might not quit. But the motivation level of such employees who don’t want to work for the company could be low.
Further companies like ACC say “We don’t believe in bonds; You are free to leave us”. And at the same time they provide good facilities, the location of your office close to your home town, travel allowances and even training in IITs. No wonder they are doing pretty well without the bonds.