Answer to Question #203092 in Management for Mir Wais Milizai

Question

 Why do most executives hire into companies under written contracts rather than a one-page employment acceptance letter?

Answer 1

Employment contracts comes in handy especially when the employer wants to control the rate of turnover from the employees (De Cuyper et al, 2017). A good case in point is when the company will find it time consuming and costly to find a replacement the employment contract would come in handy. This means that under the terms of the employment contract the employee would be required to give a specific time period to act as a notice period such as a 90 days’ period.

When the employees are gaining access to confidential and sensitive information about the employer then an employment contract would come in handy. Confidentiality clauses can be inserted into the employment contract that limits the employee from disclosing such sensitive and confidential information to third parties. The employer can also provide the employees with a non-disclosure form to sign that states that it is illegal to share confidential information about the employer with third parties.

Employment contracts also limits employees from leaving the company and setting up their own companies and therefore start business competition with the employer. Employment contracts also gives the employer an easy time especially when terminating an employee especially when the grounds for termination are specifically mentioned in the employment contract.

Employment contracts also entice high skilled individuals to the organization and coupled with provisions such as service charge, benefits and job security will even make the job offer more exciting to the targeted candidate.

References

De Cuyper, N., De Witte, H. and Isaksson, K., 2017. Employment Contracts—How to Deal With Diversity?. In Employment contracts and well-being among European workers (pp. 15-34). Routledge.