I am new to MVC 3. When I generated a file called NewEmployee.cshtml, I could see only HTML controls.
MVC is a different way of building websites/applications to webforms.
You should have a look at some of the tutorials on www.asp.net to see the differences.
Answers: 1) There are no server side controls 2) There are other benefits to using Razor (or aspx) within the MVC model. UI development is simpler/separated and helps when building interfaces with jQuery, no fighting with webcontrols and microsoft ajax.
HTH