Compensation Glossary

Employment Contract

In a way, all employment is an employment contract, but at times it is in the interests of the company to establish a written agreement. This is usually for a key employee. Such a contract usually includes a written guarantee of receiving certain rewards, regardless of the results produced on the job beyond a stipulated period. The employment contract may also have other stipulations, such as a no competition clause (where the new employee agrees not to compete with the business of the present employer for a certain amount of time).