How does a simple employment contract work?
An employment agreement is a process whereby a business hires an individual in exchange for a salary for a specific set of tasks and responsibilities they are expected to perform.
As far as this context is concerned, the business is an employer, and the individual is an employee. There are several types of employment contracts, but an employment contract is most commonly known as a legally binding agreement between an employer and employee that lays out the terms and conditions for both parties to have a successful working relationship.
In an employment contract, there are a number of important details such as working hours, benefits, pay, conduct, and responsibilities. As long as employers don’t have a standard employment agreement in place, they are not protected if their employees don’t meet the requirements of their job. Additionally, if employers fail to fulfill their responsibility as a company, employees may be exposed to a number of hazards.
Benefits of a basic employment contract
Due to the fact that there are a lot of legal terms in traditional employment contracts, they tend to be overly long and full of confusing legal jargon, which is an unfortunate product of having a lot of legal languages associated with them. There is more time spent by employees querying the fine print in the contract, and employers with a lot of time explaining and clarifying the details.
As long as your employment agreement is kept simple with just a few essential conditions in place, you will be able to make the hiring process easier to manage and more approachable.
Simple, effective employment agreements
Basic employment contracts typically contain five key components. We will explore some examples below.
1. Employee role duties and responsibilities
In order to keep your employee on track during their employment, it’s a good idea to lay out the key responsibilities they’ll need to be aware of.
A sales consultant, for example, would be responsible for some of the following things if you hired them:
- In order to generate new leads, we need to prospect and clean our contact database
- The arrangement of meetings and presentations for potential customers to learn more about a product and see it in action
- Contributing to the administrative duties of the lead sales consultants
- Working according to the sales director’s KPIs and revenue targets
As a result of listing core duties for a role in a contract, you will also be able to get your team to define what you expect from each position, which will force them to get things clarified. Additionally, you have the advantage of being able to copy and paste the same duties across multiple applications as long as the roles are the same.
Our recommendation is that you update this section regularly as you assess the effectiveness of each of the positions in your organization and make changes where necessary.
2. Compensation and wages
You must communicate accurate salary details to all your future employees.
A well-informed employee should know his or her compensation at this point in the application process. In either case, the job advertisement or the hiring contact may provide the information. Ensure that the employment contract you present reflects the salary discussions you’ve had with employees.
Contact your HR team or the employee directly if there’s any doubt or confusion regarding the salary to add to the contract.
3. A benefit plan for employees
Benefits offered by employers to their employees are usually in the form of insurance, pensions, and time off or leave arrangements.
There are several aspects of an employee benefits package that can be quite lengthy in most conventional employment contracts. This is because the company attempts to explain all of the rules and processes in which the benefits will be provided.
The purpose of a simple employment agreement is to capture the broad-level benefits of employment on the one hand, as well as rely on internal company documents to clarify the details of each benefit on the other hand. By following this strategy, you can keep your contract nice and concise while providing more details about each benefit, so that your employees will be able to understand it better, and your company will benefit from this as well.
To explain staff perks and benefits, some organizations even create short, internal videos for their intranets explaining the benefits provided to them.
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