Article: The Counsellor: To legally bind or not

Employee Relations

The Counsellor: To legally bind or not

Vivek Paranjpe, Consultant & Strategic HR Advisor to Reliance Industries answers professional and ethical dilemmas faced by our readers at their workplace.
The Counsellor: To legally bind or not

Vivek Paranjpe, Consultant & Strategic HR Advisor to Reliance Industries answers professional and ethical dilemmas faced by our readers at their workplace.

We have recently introduced an education program for our employees so people can take time off and even get financial support for higher studies. Along with this program, we are also planning to introduce a bond whereby if you avail this financial support from the company, you will need to continue working in the company for minimum two years otherwise you will have to pay the company the costs incurred. While it makes sense from the company point of view, I am not sure how such a bond will be viewed by our employees as our workforce is very young and I fear it can backfire the overall intention of the program. What is your opinion? Are these bonds even legally applicable?

To have a legal bond or not to have a legal bond - this is a classic dilemma that HR professionals go through. I am always in favor of creating an emotional bond between the employees and the company. That is the best way to retain people, and for this, multiple engagement strategies need to be deployed. While we ensure that employees are engaged and are retained because they find the company where they work as the right place to be in, we can’t forget the interests of the management. Remember you are working for a business and not for a charitable organization. When a corporation makes investments, it expects a fair return, and there is nothing wrong with this expectation. If your corporation expects the employees to serve for two years post investments, I don’t see anything unreasonable in that. You have to be fair to the employees as well as the corporation; just make sure that the expectations from the bond are proportionate to the investments. It is always very difficult to legally enforce such bonds and more so if the expectations arising out of the same are disproportionately higher than the investments the company makes.
I believe you should focus on supporting the right educational programs. The relevance and appropriateness of the programs that you are supporting is more crucial than anything else. After successful completion of the educational program, the employee expects to grow, especially if the company has financed the same, and that becomes very difficult if the education that you have supported is not relevant to the business.
Another area of focus should be on helping employees apply their newly acquired knowledge and skills on the job so that their performance improves and the employees become ready to take up new challenges and become ready for growth. Evaluate the relationship between investment in education with the career progression, performance improvement and growth of the individuals rather than worrying about the bonds. Understand the curriculum and credibility of the educational institution where the employee wants to pursue higher education, and ensure that the managers of the employees are also engaged with the process. Managers must support the educational inputs received by the employee with relevant work assignments, stretch goals, etc., so that the employee is continuously applying his/her learning on the job as he/she is pursuing the program.
To sum up - a holistic view to the educational support program is a must. With such a holistic approach, probability for the program to backfire just because of a bond is minimal.

Vivek is a Senior HR professional with over 35 years of experience, ranging several leadership positions, in India and abroad. He leads his consulting practice since 2003 and presently works as a Strategic HR Advisor to Reliance Industries, and is also an independent Director on the Board of Motilal Oswal Financial Services Ltd. Prior to this he was based at Singapore for several years where he was Director HR - Operations at Hewlett Packard for the Asia Pacific Region.
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Topics: Employee Relations

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