Companies are more likely to use a formal employment contract when:

Question

Quizplus · Accepted Answer

Formal employment contracts are typically used when employees are hired from outside the organization in order to establish clear expectations and boundaries. They outline the terms of employment such as job duties, compensation, benefits, and expectations for behavior and performance. When hiring an external candidate, the organization may not have a pre-established relationship or understanding of the individual's work habits, which makes a formal contract an important tool for ensuring a mutual understanding of expectations.

Companies Are More Likely to Use a Formal Employment Contract