Employee referral bonuses
ray a
5,703 Posts
What are your opinions of giving bonuses to employees who refer new hires? Any success stories? Any failure stories?
ray a
5,703 Posts
Comments
At my last job, we implemented an employee referral program and it worked very well. As I recall, we paid one hundred dollars for every production worker hourly referral (the sheer numbers caused us to set it low), $300 for salaried, exempts and $500 for national sales directors.
There were rules like the bonus not paying out until six months on the job and the referred candidate absolutely had to list the referral source on the application or it had to be clear up front. No collusion six months later.
It was a great program. One thing I did with the policy posting was to mention a sunset date in the last line. "Unless specifically continued in writing, this policy and procedure will have an effective ending date (one year off)". That kept somebody from waving it in my face two years later after we stop it, saying they found it posted.
Not with standing Don's post above and thoughts of opening some recruiting and placement office on the border, I will say that we have a recruiting bonus program and it works.
I agree it must have sunsets and dates and "first referral" rules in order to properly administer the program. We give $100.00 after the new hire has been on board for 60 days. We award another $100.00 after the new hire has completed 6 months. It has been in place since I arrived, and it is a favoriate of the employees who no longer are provided with performance bonuses. We allow managers to also participate so they will go out and find reliable persons that will have a personal attachment to the manager and the company verses the HR getting credit for recruiting and placement. I and the GM do not participate for bonus money, but all other managers are allowed. The employee and the new hire must both be employed at the time of the award of the bonus award.
PORK
Another thing that made it work, I think, was our constantly driving home the point that our workforce should be in the best of all positions to help select people they would want to work side by side with. Nobody wanted credit for making a dumb referral.
Our company established a referral bonus of $250 in 2000. It has worked well for us with one negative, relatives.
When an employee recommends their son, mother, etc. and you do not hire them because they do not qualify for the position, you have an unhappy camper.
I was looking for a negative experience too. We do tend to hire a lot of family members and even without a referral bonus we run into the occasional problem with hurt feelings because we didn't hire someone's relative.
Everyone have a Blessed day.
PORK
It is well received, and we have found a number of great people this way. Most times, the people hired by referral stay a year or more.
We do promote the bonus in our company newsletter on a regular basis.
Even before the referral program, people would recommend friends and relatives, and sometimes there were bad feelings if someone was not hired. Now, we tell people we will gladly look at a resume or application, but we do not guarantee an interview, much less a job. That has eliminated most post-hiring complaints. And, people still actively refer people to us
Jim