What I understand,
The contract employee phenomenon is the gift of contemporary world. A contract employee is an individual engaged by a business to provide a specific set of services.
A contract employee is in fact an employee of a particular business.
An employer-employee relationship is established pursuant to the terms and conditions of a written employment contract. The contract demarcates the length of employment, the salary and bonuses to be paid, and the other benefits that accumulate to the contract employee. The contract also sets forth the specific role the employee will suppose to play. Many contract employees are found in corporations at the upper management level. Additionally, contract employees frequently are engaged for the pursuit of a particular project and most commonly can be hired for any level. The contract likely will include a provision for renewal under specific circumstances. Although the length of the engagement of a contract employee varies, the term typically is associated with the undertaking of a particular project or for a set number of years (very commonly in the five-year range).
The contract employment is a double edged sword. It has both positive and negative aspects. On positive side; it increases efficiency level. The employee is well aware of his/her limitation on the commencement of the job. Contract employment ensure “right person for right job”.
On negative side; the contract employee does not have security of the job. Sometime the job a contract employee depends on the whim of the Boss. Like and dislike of the superior becomes order of the day. Sometimes it breeds flattery and buttering policy. Sometimes, contract employment is used to self interests. It involves nepotism, expediencies and selfish motives.
On the other hand regular policy of employment has its own good and bad. It provides job security but decrease efficiency in most cases. The regular employees become sluggish and lacks spirit of innovativness.
So, no policy either contract or permanent is bad. It’s the employees who made any policy the best or the worst.