The offer and appointment letters are significant parts of the recruitment and hiring process, demonstrating the candidate’s hiring with the unanimous terms and conditions decided between the employer and the candidate. However, people often confuse an offer letter and an appointment letter as the same. Both are varied documents with individual significance that determine the selection of the candidate and define the job specifications.
Although both are initial documents in the recruitment process, the duration of release, the purpose of release, and the data contained in both documents vary. Both are crucial for the candidate to get associated with the organization and have a conflict-free start to their job role. Likewise, the importance of both an offer letter and an appointment letter is paramount for the company to keep the clarity of the recruitment process as well as maintain data in the recruitment management system.
In this blog, we will give you an insight into the difference between offer letter and appointment letter specifying their definition, purpose, duration, terms, etc., also, highlighting their importance for both the candidate and the company.
Offer Letter vs Appointment Letter
Let us understand the difference between offer letter and appointment letter with the table below:
|
Parameters |
Offer Letter |
Appointment Letter |
|
Definition |
It is the initial formal documents that states the offer to the selected candidates | It is a legal comprehensive document that specifies all the employment terms and details for the employee to sign and acknowledge |
|
Purpose |
Is to clarify the terms of employment to the selected candidates before entering the employment contract. | To legally bind both the employer and employee in an employment contract that serves as a reference document for future conflicts. |
|
Timing |
This is the initial formal document. |
This is given after the offer letter is accepted. |
|
Legal Implications |
This is not legal. | This is a legally binding document. |
|
Content |
Contain basic information such as job title, proposed start date, salary, and initial benefits. | Contains comprehensive information, including job responsibilities, work hours, detailed compensation package, employment terms, etc. |
What is an Offer Letter?
An offer letter is a formal document released by the employer to the selected candidates, mentioning the details of job title, job role, terms of employment, date of joining, work schedule, etc. It is a preliminary document shared by the company to the selected candidates to seek their acceptance to the job offer until the full employment contract is signed.
The key aspects included in an offer letter are:
- Name of the candidate
- Date of Joining
- Terms of employment (full-time, part-time, or contractual)
- Compensation and salary package
- Location of employment
- Designation
- Work schedule
- Start date of the position, etc.
The offer letter is the first official document released to the selected candidate for securing their acceptance to the terms of employment and proceeding to other corporate procedures necessary for onboarding into the organization.
It is pivotal for both the employer and the employee. The candidates are required to read the offer letter, understand the terms, and revert with queries in case there is any confusion or diversion in the agreed terms during the process of PI (personal interview). They can question the divergence and request a fresh offer letter or can accept it sooner to make the onboarding faster.
Likewise, releasing of offer letter to the selected candidate can help the employer secure the candidate’s commitment, outline the terms of employment clearly, and streamline the onboarding process, ensuring a smooth transition into the organization.
What is an Appointment Letter?
An appointment letter is a legally binding document issued by the employer to the candidates who have accepted the offer letter. It serves as a legal document that highlights the commitment of both the employer and the employee towards the terms and conditions.
Also, it outlines the key terms and conditions related to the job offer which the company as well as the employee is bound to adhere to.
The primary aspects of an appointment letter which are included in it are as follows:
- Job title
- Joining date
- Terms and conditions of employment
- Job role (D=duties and responsibilities)
- Contract details
- Bonds (if any)
- Employment type
It marks the start of the employment relationship between the employer and the employee and indicate their acceptance to the said terms. The appointment letter is a formal letter that typically ends with a request for the candidate to sign and return a copy of it the employer for start of the employment.
What is the Difference Between Offer Letter and Appointment Letter?
To know what is the difference between offer letter and appointment letter, it is necessary to understand its parameters.
Let us understand the offer letter and appointment letter difference by evaluating its metrics. The major difference between an offer letter and an appointment letter is:
1. Definition
➔ Offer Letter
An offer letter is a formal letter containing the terms of employment, job title, date of joining, salary and benefits details etc., to provide a clarity to the selected candidates regarding their employment details before entering the employment contract.
➔ Appointment Letter
An appointment letter is a legally binding document between which is signed by employee to acknowledge the terms of employment and its condition.
2. Purpose
➔ Offer Letter
The purpose of offer letter is to forward an job offer to the selected candidates with clear mention of terms of employment, that will help them understand the employment conditions before entering the organization.
➔ Appointment Letter
The purpose of appointment letters are to legally bind both the employer and employee in a employment contract and serves as a reference document for future conflicts that might arise due to diversion in the employment contract.
3. Timing
➔ Offer Letter
Offer letter is the first formal document sent by the employer to the employee before entering into the employment contract.
➔ Appointment Letter
Appointment letters are issued after the acceptance of job offer or after the offer letters are accepted by the selected candidates.
4. Legal Implications
➔ Offer Letter
Offer letters are not legal, although this is the first formal document that leads a candidate towards the employment contract.
➔ Appointment Letter
Appointment letter is a legally binding document that can be used as a reference in case of derailing in momentum from the agreed-upon terms by the employer and employee. The breach in employment terms in an appointment letter can lead to legal lawsuits.
5. Content
➔Offer Letter
Typically includes basic information such as job title, proposed start date, salary, and initial benefits. It provides a general overview but may not include in-depth details about policies or responsibilities.
➔ Appointment Letter
Offers comprehensive information, including job responsibilities, work hours, detailed compensation package, employment terms (such as probation period), benefits, and organizational policies. This document serves as a legal contract between the employee and the employer.
Importance of Offer Letter
The significance of an offer letter in the hiring process is crucial and holds great importance to both the employer and the employee.
Let us understand in details:
➔ Formalizes Hiring Process
The offer letter formalizes the hiring process by setting a professional tone of expectations from the employee. It is a primary formal document that offers the candidate with professional details such as employment type, date of joining, salary and compensation details etc.
An offer letter is a final document of the hiring process that ensure the hiring of a candidate and gives the candidate a closure and validation, for their selection in the hiring process. It is also a confirmation from the employer that the employee is selected for the job role with the terms of employment mentioned in it.
➔ Helps in Informed Decision Making
The offer letter consists of employment details of the candidate such as date of joining, terms and condition s of employment, salary and benefits details, etc., that helps the candidate take informed decisions before joining in the organization formally.
A well written job offer letter serves as a clarified document for the candidate to understand the terms of service and make decisions in accordance.
➔ Clarifies Terms and conditions of Employment
The offer letter serves as a reference copy for the candidate and the employer to understand the terms of employment thoroughly and proceed in accordance.
Candidates might have multiple job offers that can be accepted or rejected by them as per their convenience and choice. An offer letter can be revisited if there are questions or disputes about terms such as salary, work hours, or benefits in the future.
Importance of Appointment Letter
The appointment letter is a legally binding document that sets the tone of employment legally between the employer and the employee. Let us understand in details:
1. Legally Binding Document
The appointment letter legally binds both the employer and the employee in employment terms that is unanimously decided on by both the parties.
Any derailing in momentum between the parties can cause them legal lawsuits which will hamper their reputation as well as will bring them legal troubles.
The appointment letter serves as a reference helping to resolves issues that can arise due to future divergence in the agreed-upon terms of employment.
2. Acknowledges Acceptance Terms
An appointment letter is a formal document that acknowledges the acceptance of the employment terms by the employee and determines that the employment terms are unanimous and agreed-upon by both the employer and the employee. This mutual acknowledgment confirms that both parties are on the same page, helping to avoid future conflicts.
3. Serves as an Onboarding Tool
The appointment letter confirms the joining of the candidate, giving the HR professionals to carry on with the further process of onboarding the candidate into the organization system. It might include, providing of official gadgets, enrolling the employee in biometric attendance system, providing access to systems of the organization, arranging orientation programs, etc.
End Note
While both the offer letter and appointment letters are significant for the hiring process, yet difference between offer letter and appointment letter is massive in terms of their significance, purpose and timings. Where offer letter serves an initial document that highlights the offers made to the candidates for their acceptance or rejection, appointment letter confirms the employment with the agreed-upon terms of service. Together, these documents help establish a transparent and structured hiring process, ensuring both the employer and employee are aligned on expectations and terms before the employment officially begins.
FAQs on Offer Letter vs Appointment Letter
1. Is appointment letter and offer letter same?
No, appointment letter and offer letter are different documents having different purposes, significance and timings of release by the employer.
2. Does an appointment letter include salary?
Yes, an appointment letter consists of salary and benefits details that is unanimously decided by the employer and the employee. It also consists of the salary breakup of the candidate that provides a clarified mention of the salary chart, deductions and compensations.
3. Do we get an appointment letter after an offer letter?
Yes, offer letter is the first official document that the employer releases to the selected candidates in the hiring process to obtain their acceptance before forwarding the appointment letter. An appointment letter is only proceed with when the offer is accepted by the candidates.
4. Is an appointment letter a joining letter?
Yes, an official letter is considered as a joining letter that confirms the candidates acceptance for the job adhered by the terms of employment agreed-upon by both the employee and the employer.
5. Is salary mentioned in an offer letter?
Yes, salary details and compensations is mentioned in an offer letter. It is a reference document that serves as a clarified formal sheet and mentions all the important aspects such as salary, compensations, benefits etc. to provide assistant to the candidate to make informed decisions.
6. Is it ok to share offer letter with other companies?
No, offer letter is a confidential document that should not be shared with other companies. Although, there are companies that ask for the offer letter before offboarding to check if the candidate is joining their competitors and provide experience letter only after submission of the offer letter. However, it is always advised to not share your offer letters with other companies to avoid data leakage and avoid negative consequences.
7. What information is typically included in an offer letter?
An offer letter consists of the following information such as:
- Name of the candidate.
- Job role details.
- Salary and benefits details.
- Terms of employment.
- Location of employment.
- Work schedule, etc.
8. Is an offer letter legally binding?
No offer letter is not a legally binding document. Although it is the first step to entre into the employment contract formally rather than legally. It is a formal or professional document but does noth hold legal repercussions if breached.
