#HRGUIDE: BASICS OF AN OFFER LETTER

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HRGUIDE BASICS OF AN OFFER LETTER

• HRGuide is an initiative by Applicant Tracking
  System to guide HRs who are new in the
  profession of Human Resources and its
  responsibilities. Today we are covering about
  the basics of an Offer Letter, why is it
  important to provide the candidate with a offer
  letter.
• An offer letter is a document that formally
  confirms the details of an offer of the
  employment. It is taken as a written proof of
  contract between the employee and the employer.
  During the time of interview, if a candidate is
  selected, it is mandatory for HRs to provide the
  candidate a document of Offer Letter. Generally
  the employee has to sign and return a copy of
  the letter to employer as a formal acceptance of
  employment. However it is not necessary that it
  is to be signed immediately.
• Some of the basic information that should be
  mentioned
• Basic Job Information
• Offer letter should contain the Title of the
  position, department to work in and whom the new
  joinee is supposed to report to. This should
  also inform the employee, location of the job and
  when he can join the company. Also, mention if
  it is full time employment, or a part-time work.
• Salary
• How much the employers are paying the employee
  should be mentioned. A recommended way is to
  segment the salary into various components like
  Basic Salary, HRA, Allowances, Bonus etc.
  whichever is applicable in your organisation.
• Bonuses

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• If there is any amount that is paid as bonus, it
  should be mentioned. The letter must clearly say
  dates or approximate time period (monthly,
  quarterly, half yearly or yearly) distribution of
  bonus. For more transparency, tell employees
• the format of bonus could be cash, added in
  salary, paid leaves etc. As much possible, tell
  employees how their bonus will be calculated.
• 4. Policies
• HRs are advised to mention all the relevant
  policies that are applicable with this job in the
  offer letter provided. This will keep the
  employee in sync with the companys working
  style. It could be leave policy, working days or
  working hours policy, work etiquettes etc.
• General Terms and Conditions that comes with an
  Offer Letter
• Contract of Employment
• If there is any contract between the company and
  the employee, it should be clearly mentioned. The
  letter should clearly say the period of
  probation (if any), notice period (if quitting
  the company) and any bond period (if applicable)
  that an employee is expected to serve. Also
  mention the fines an employee need to fill if not
  meeting these contract terms.
• Expiration of Letter
• Once HRs provide offer letter to the selected
  candidates, they should also mention the expiry
  date to the acceptance of the same. A
  recommended timeline would be to ask candidate to
  give his acceptance within 30 days. This will
  make the process fast. If the employee is not
  willing to accept the offer, the employer can
  look for another candidate within time.
• Confidentiality Clause
• Generally along with the offer letter employee
  has to sign a letter accepting that he will not
  share any confidential information of the
  company to anyone. This might include, but not
  limited to, hardware knowledge, software
  knowledge, tools and techniques used by the
  company, patent and copyrights information etc.
  Breaching which the employee might be subjected
  to legal actions.
• Providing an offer letter and receiving a signed
  copy of the same is most crucial for any company.
  If the procedure is not followed, a candidate
  might not feel trust in the company and can look
  to switch company soon. Without this letter, an
  employer cannot take any action against the
  leaving employees.