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Dear all,
We started formulating HR policies & procedures for our newly started Software company.
We have planned to inform the interviewed candidate's result & date of joining through phone & give appointment letter(with joining date, salary details & rules) at the time of joining. Kindly clarify me, is it compulsory to give offer letter before appointment letter or it depends on companies interest?
Need suggestion..
Thank you..
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It is advisable to give offer letter well in advance to the shortlisted candidates to join you on a specific date, and that offer has to be accepted by the candidate in return.
To establish employer-employee relation, an offer letter must be issued to the prospective employee and his acknowledgement is obtained and filed in his personnel file. Contract of Employment can be issued later once the employee joins the company.
With regards,
Hello Dharshinihra,
Let's forget your Company & whatever HR policies you are now formulating FOR A MOMENT.
WOULD YOU accept such a scenario FOR YOURSELF--without any Document from any Company that you have been selected & should join by so-and-so date [everything VERBALLY]? Would you have the confidence to resign, go thru the Notice Period & then join--in the quality of the world we are in now?
At least, I wouldn't--what IF the company says later that I wasn't even selected or asked to join [for whatever reason(s)]?
However, it would have been MORE appropriate if you had mentioned the REASON(S) for this decision/query from you.
Why the hesitation to put down things in-writing?
Dear Dharshinihra,
I fully agree with Tajsateesh. No body would like to serve on tele calls only. Some times the call can be a hox and you will not know what to do if you get cheated. It is a must to issue proper interview letters, call letters, joining letters e.t.c. particularly in prive indistry. It is compulsary in Govt and Public services.
Think it over yourself in the same position and then realise the implications.
Hi Dharshinihra,
Such policies will never get ready any candidate to keep trust on you. Candidates who are already involved in a job will not ready to submit their resignation to the current company until they do not have any confirmed job letter on their hand.
Instead of not giving offer letter I will suggest you to give them an offer letter without any salary information. By this way, candidate will have the confirmation of job and for you they won't be able to negotiate with any other company on basis of your offer letter.
Giving offer letter without mentioning salary particulars would be misleading and incorrect. Unless the prospective employee knows what salary he gets from his new employer why he will resign from existing job? One more thing, the employer may contact other employer and tell him to withdraw his offer of employment and the employee loses an opportunity.
For misleading part, we can clarify to candidate that we have not mentioned the offered salary in the offer letter. It is just a confirmation of their job. At least they will consider to join the company. Giving nothing will create a possibility to lead them to deny for our job. Better we give them offer letter without salary information.
Employer will only contact other employer not to offer the job only if they know that which employer is offering the candidate. Otherwise they will not be able to do so. And that is a very rare case. We can never overcome such conditions.
For the benefit of all.

As mentioned by Saji, the offer letter should have details regarding the expected joining date, the position for which the person is hired and these days they add a line - Offer valid if joined on or before Expiry Date... so that candidates don't misuse the offer letter...

However, I believe that the offer can be extended over email as well. As Madhusudan mentioned ahead -

Please note that a offer letter do not initiate the employee-employer relationship, it is the appointment letter which does so...

An offer letter is just a letter of intent from the company which the company gives to the person. The person has full rights to accept or reject the offer...

Kindly note that we are not usually required to sign the offer letter and it has no legal implications...

The appointment letter is the right letter to build the employee-employer relation.

With TS rising the right concern,

A verbal confirmation cannot be contested... If say you confirmed me over the phone, I resign and when I come to your office and you say I never confirmed you, and do I have any proofs for it... where should I go?

Since emails are increasingly accepted as formal conversations and are legally accepted as proofs, atleast a written email to the concerned person should be more assuring than mere a phone call.

Secondly, would like to know what made you think to not to extend offer letter and directly issue appointment letter...

Are you facing any problems after issuance of offer letter? If so, kindly discuss the matter so that we can collectively think in right direction and search a solution...
Most companies in manufacturing issue an appointment letter. When the IT sector started the issuing of offer letters and then issuing the appointment letters after joining, some manufacturing sector companies including us, started following this. Issue of ethics came up in some MNC companies. The reason being the offer letter did not have terms of appointment. And the terms given in appointment letter was not revealed in advance. Now, at least in my company, we are very particular about ethics. We sent it to the legal department. The legal opinion was that when the terms of appointment is not revealed fully before the employee joins the company, then none of the terms are valid, except the terms communicated in the offer letter. And the offer letter only contained salary details, designation and grade, apart from validity period of the offer.

We realised, apart from the legal issues, it also violated our ethics policy, since transparency is our core value. And the ethics committee felt that we need to be transparent about our terms of appointment before the employee joins. If he is uncomfortable with our terms, we do not mind looking for someone else.

Hence, we reverted back to issuing of appointment letters and no offer letters. All our terms are transparent and we even send them the forms for insurance, so that they can fill it up and send it across to us before they join. We register them in insurance one month before they join, so that they can avail of the benefit from the date of joining itself. We sustain this engagement with the prospective candidate and it becomes difficult for him to withdraw.

We are a Petrochemical multinational which is based on Oil and Gas. Our competitors are Reliance, Shell, Chevron, AGIP, Total etc. We are listed in the NYSE. Hence, application of ethics policy is mandatory and essential for us, since corporate governance standards are monitored by SEC.

The thought in IT companies are a bit different. They have an issue of the employee taking the appointment letter and negotiating salaries and not joining. But, that could even happen with an offer letter.

In terms of policies, you need to align it with the values of the organisation. Only then will the HR policy and the values become interlinked and HR "feel" will be vibrant. My advise would be to check whether any system that you are creating is in line with your organisational values. And then evolve the system. If It does not, then do not incorporate such a system. The values then just become a Jargon. And Values are essential for an organisation to reach their mission.

All the best.
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