Employee Referral Programs

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Best Practice Review An analysis of the most efficient way to implement an employee referral program What is an employee referral program? An employee referral program – is a program by which an organisation encourages its employees to recommend individuals from their network to apply for a position within their company. It is formally defined as3 “Informal, person to person communication between a perceived non commercial communicator and receiver regarding a brand, a product, an organisation or service” Examples of this being performed could be an employee encouraging a friend to apply through emphasising the benefits of the company to them, or could be an employee offering someone a referee card if they were impressed by their service. Why is it a successful method? Employee referral programs have proven to be a su¬¬¬¬ccessful method as the individuals the employees recommend, usually would typically cast a good reflection upon them. Furthermore, it is imagined the people they select would have already have a good idea of the business culture. This means that they are more likely to be a better cultural fit. In addition, research has proven that the hired individual will work harder because they are in a situation whereby they wish to impress their friend or the referrer. This is because social relations with referrers extend beyond recruitment stage to actual entry and transition into the organisation. I.E. the information and support exchanged between referral hires and their referrer does not necessarily end once the referral is hired. This effect is known as ‘The social enrichment hypothesis.’ This was proven in a study which showed that referees, whose referrer left the organisation, were outperformed by referees whose referrer stayed within the organisation. The referees who stayed within the organisation also outperformed those who were hired

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