Hi Seniors Greetings!
As a part of retention measure,some companies do take Cheque as a security for 2 years with some amount e.g 2 lakhs.if employee leave with in 2 years employees is liable to pay the amount to the company as they hold cheque with them.
Now can you help me with pro's & con's of this issue. also in offer letter whats the write up for the same?
We wanted to implement the same in our comapny,until now we are takign training bond for 2 years for 2 lakh rs ..but thats not effective now we want to switch to this..
Can you please help me with your valuable inputs..Thank you so much:)
Regards..Punna
From India, Hyderabad
1As a part of retention measure,some companies do take Cheque as a security for 2 years with some amount e.g 2 lakhs.if employee leave with in 2 years employees is liable to pay the amount to the company as they hold cheque with them.
Now can you help me with pro's & con's of this issue. also in offer letter whats the write up for the same?
We wanted to implement the same in our comapny,until now we are takign training bond for 2 years for 2 lakh rs ..but thats not effective now we want to switch to this..
Can you please help me with your valuable inputs..Thank you so much:)
Regards..Punna
From India, Hyderabad
Dear Padmini,
Since this is a financial matter, I recommend you making separate agreement between MD and employee on the bond paper. In the appointment letter just mention that employee needs to deposit the security amount with the company and separate agreement would be made for this purposes.
You need to work on various clauses on validity of the agreement. You cannot make the agreement one sided. Therefore, take your lawyer's opinion too before going ahead with this scheme.
Legal requirements apart, have you studied various pros and cons of this scheme? If you ask candidate to pay INR Two Hundred Thousand, will you be able to attract quality people? Those who are confident of their career may not agree for this scheme. Therefore, you will end up in getting those candidates who do not get job anywhere!
Through this scheme you may be able to control attrition but in the bargain you may retain less intelligent people. Is this acceptable to you?
Secondly, you need to decide in advance that how to handle the issue of non-performance or under performance. Suppose some employee pays your company Rs 200K. He wants to quit. For this he will start absenting, will start committing job errors. You will have to terminate him per force before two years. In that case will you not pay him this security amount?
I know few companies who held their employees' one month's salary as security deposit. However, this formula never worked. Employees just reconciled with their fate and continued to quit as ever. In your case what you are asking is security deposit equivalent to four to eight months salary. How many candidates will be ready for this? Have you done any market survey? What if you stop this scheme in between? Then will you return the money to the employees from whom you had taken this amount?
It appears that you and your management have not understood properly the challenge of retention. Your main challenge is to create organisation's culture that is conducive to growth. You need to create a culture of values, a culture of fairness, a culture of learning, a culture of respect, a culture of welfare and change, a culture of innovation. When you attempt to do all this you will be able to contain the malaise of attrition. Not otherwise.
You can also conduct the Employee Satisfaction Survey (ESS). Find out what your employees want.
Since you asked for, I have given my forthright opinions. I urge you not to take it personally.
Ok...
Dinesh V Divekar
Beware of false knowledge; it is more dangerous than ignorance.
From India, Bangalore
Since this is a financial matter, I recommend you making separate agreement between MD and employee on the bond paper. In the appointment letter just mention that employee needs to deposit the security amount with the company and separate agreement would be made for this purposes.
You need to work on various clauses on validity of the agreement. You cannot make the agreement one sided. Therefore, take your lawyer's opinion too before going ahead with this scheme.
Legal requirements apart, have you studied various pros and cons of this scheme? If you ask candidate to pay INR Two Hundred Thousand, will you be able to attract quality people? Those who are confident of their career may not agree for this scheme. Therefore, you will end up in getting those candidates who do not get job anywhere!
Through this scheme you may be able to control attrition but in the bargain you may retain less intelligent people. Is this acceptable to you?
Secondly, you need to decide in advance that how to handle the issue of non-performance or under performance. Suppose some employee pays your company Rs 200K. He wants to quit. For this he will start absenting, will start committing job errors. You will have to terminate him per force before two years. In that case will you not pay him this security amount?
I know few companies who held their employees' one month's salary as security deposit. However, this formula never worked. Employees just reconciled with their fate and continued to quit as ever. In your case what you are asking is security deposit equivalent to four to eight months salary. How many candidates will be ready for this? Have you done any market survey? What if you stop this scheme in between? Then will you return the money to the employees from whom you had taken this amount?
It appears that you and your management have not understood properly the challenge of retention. Your main challenge is to create organisation's culture that is conducive to growth. You need to create a culture of values, a culture of fairness, a culture of learning, a culture of respect, a culture of welfare and change, a culture of innovation. When you attempt to do all this you will be able to contain the malaise of attrition. Not otherwise.
You can also conduct the Employee Satisfaction Survey (ESS). Find out what your employees want.
Since you asked for, I have given my forthright opinions. I urge you not to take it personally.
Ok...
Dinesh V Divekar
Beware of false knowledge; it is more dangerous than ignorance.
From India, Bangalore
Suppose If candidate agrees to pay also 2Lakh as security deposit and after one year gets a better opportunity and violates the agreement, still nothing can be done to him as the contract itself is not valid as bonded labour cannot be practice in India.
More over its easy for the candidate to refuse the signature claiming the company has forged the signature. Let the company appoint a legal personal and go for justice in the court.
Candidate normally gives PDC actual money company never gets , candidate can any time request bank and make Stop Payment of Cheque.
If you appoint candidate as external consultant then you can take legal actions . As an employer under these circumstances it does not work well.
From India, Mumbai
More over its easy for the candidate to refuse the signature claiming the company has forged the signature. Let the company appoint a legal personal and go for justice in the court.
Candidate normally gives PDC actual money company never gets , candidate can any time request bank and make Stop Payment of Cheque.
If you appoint candidate as external consultant then you can take legal actions . As an employer under these circumstances it does not work well.
From India, Mumbai
It is quite common in service industry that people leave the job frequently but while adopting good employment practice we can improve the attrition rate.
Such policies are not applicable for hiring the talented workforce.
Also, there are some legal issue which restrict the companies for adopting unfair practices.
Kindly consult your lawyer before adopting any such practice.
Regards,
Manohar S Negi
From India, Delhi
Such policies are not applicable for hiring the talented workforce.
Also, there are some legal issue which restrict the companies for adopting unfair practices.
Kindly consult your lawyer before adopting any such practice.
Regards,
Manohar S Negi
From India, Delhi
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Retention quest.doc
Employee-retent ion-plan_1__185 .pdf