Sheela,
The problem you are facing isn't new to a HR person who is into recruiting--and neither will it be the last time.
In a way, Mahesh & (Cite Contribution) have suggested better practical solutions.
Pl try to figure-out what's in YOUR hands & then go about attempting to better them.
The Bond or the certificates-taking isn't in your hands--no point blaming the management [they would have their reasons to put such rules into place--past experience reg attrition being just one of them] OR wasting your time trying to convince them to do away with such rules. You will have to bring about the change by actions/steps where they themselves will feel their methods have served their purpose & aren't necessary anymore.
And I also firmly believe that there's NOTHING called a 100% 'perfect' solution or 100% 'imperfect' solution--it all depends on the situation.
Suggest you try the following: First make a list of ALL the factors [however silly] that are causing PROBLEMS in your hiring the right people [I am sure the Bond & certificates will be on the TOP :-), but frankly I don't think they are the ONLY ones]. Then make a list of ALL the factors that you think are the ADVANTAGES of working in this Company [again, however silly/small]. This is what I usually call "The PROs & CONs List" of a situation.
Take it from me Sheela--no 2 people will have an identical set of priorities. And also you will be surprised to find how important/useful some PRO aspect that you thought is downright 'silly' will be to some people[candidates]. When you search/source for resumes, try to match mentally--going by their personal profiles more than the technical angle--if any of your PROs will appeal to him/her. If yes, go ahead & take the process forward.
I won't say, your hit-rate will be 100%--but take it from me Sheela: it will definitely be far, far better than what it has been so far. Except that it will take sometime to see the unsaid in the resumes while you match YOUR PROs to their NEEDS.
The reason for my confidence? We are right now servicing for a company whose TOTAL strength is 15 & the packages not very high [no certificates issues here though]--with a reasonably good hit rate. In a single line: Focus on the matching of 'company strengths' vis-a-vis 'candidate needs' rather than on the 'company limitations' [I won't say 'weaknesses' for a few specific reasons].
ALL THE BEST.
You can reach me on [Login to view] if you need any assistance.
TS