Thursday, October 29, 2015

Truth about Employee Referrals

Employee referral programs can be effective, but they must allow for personal accountability.

Tina has been working in her current position for about three years. About six months ago, Tina’s friend Amy was hired into the organization. This hire was based largely on Tina’s referral. Amy was happy to have a job and Tina enjoyed the $100 bonus she received due to the organizational employee referral program. However, things have changed. Amy’s performance is not very impressive and the organization is talking about terminating her employment by the end of the week. In conjunction with Amy’s poor performance, the organization has begun looking at Tina in a different light. Tina’s supervisors have started being more critical of her performance and she is feeling the pressure. Nothing in Tina’s performance has changed for the negative since Amy’s hire, but the perception of Tina has been affected.

Employee referral is an internal recruitment method employed by organizations to identify potential candidates from their existing employees’ social networks. An employee referral program encourages a company's existing employees to select and recruit the suitable candidates from their social networks. Typically, when a new hire is brought into the organization and an employee referral was the source of that hire, then the referring employee would receive some sort of “reward” (monetary, gift card, event tickets, etc.) for that referral. This type of program usually works well as social connections already exist as does a certain level of trust.

  • Documentation – An employee referral program needs to be detailed and in writing.
  • Expectations – It is important that each employee understand the type of person and the character of a person the organization is looking for.
  • Personal Accountability – When somebody is referred and hired into an organization, that organization must hold the newly hired employee and the original employee accountable for their own performance. If the newly hired employee does not perform well, then that cannot be a representation of the original employee. This accountability should begin with the first interview. The referral got the person into the door, but from then on, it is up to the individual to get the job and, if hired, perform well.

There is however, another side of employee referrals that has become an issue in recent years. When a company hires somebody who another employee has referred, far too often, the fate of both employees become intertwined. If the new employee does well, then the organization will look favorable upon the original employee. However, if the newly hired employee’s performance falters, then the organization begins to think differently and more critically about the original employee. This is big reason why people, in general, hesitate referring anybody to their organization. If somebody works in an organization knows of a job opening within that organization, they are most likely going to stay quiet about it. Staying quiet is a lot safer for them and their job status. Rather than risk “rocking-the-boat” the employee will look away as unemployed and talented people around them look for a job.

If you want to have a successful employee referral program, then these are the attributes that must be a part of it:

If your organization has an effective employee referral program, then it will be a valuable tool for you to use when filling open positions. Happy and energetic employees will refer people they know and this could bring in new employees who have wonderful talents and will contribute greatly to the success of your organization.

For more information or questions on this topic, please feel free to email me at

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