Posted: by HRNasty in Company Culture, What HR Really Thinks, What Recruiters Really Think

employee referral

Employee referral programs should reinforce what the employee can control

Employee Referral Programs

As an HR nerd, I am expected to know a little bit about human behavior. Yes, I have the prerequisite degree in Psychology with a concentration in Organizational Behavior and Human Resource Management, but I am also a Libra. Everyone knows that Libra’s like people and serve as mediators between quarreling parties. Actually, that last sentence was BS and anyone that knows me is probably pulling a WTF? Although HRNasty does play mediator behind the scenes, as most regular readers know I don’t believe in humanity.

You don’t need a psych degree to have heard about Burrhus Frederic Skinners, AKA BF Skinner and his principle of reinforcement and operant conditioning. If you were asleep in your Psych 101 class, he is the guy that was made famous for his experiments with rats in a box that pushed a lever and received positive reinforcement in the form of a pellet of food. Never mind the rat OD’d on lever-pushing, got fat, and then died of obesity. BF Skinner was my kind of guy that believed in the idea human free will was actually an illusion. Yes, an illusion! BF Skinner could have been my BFF.  He believed that human behavior was based on the consequence of an action. If something good happened after an action, the chances were good that the action would happen again. If the consequence of an action were negative, then there was a high chance the action would not be repeated. 

In a sterile lab setting when the rat presses the correct button (desired behavior), rat receives a food pellet (reward). In real life: Rat touches a hot iron, the rat gets burned, and you, I mean the rat – probably won’t touch the iron again. To all you real biology majors, I realize the brain may not be involved in this reaction and that this is an involuntary reflexive action. The nerves in the spinal cord react to the heat and transmit the signals to the nerves in your hand, blah blah blah. At the end of the day, chances are high that we aren’t going to touch the hot iron again. 

There is also a large subset of concepts, but the important 2 along this discussion is the thought of Immediate vs. Delayed reinforcement. The type of reinforcement that has the strongest and quickest effect in controlling behavior is the reinforcement that occurs immediately after the desired or undesired behavior takes place. The longer the delay, the less likely the learning.

Rat presses the correct button (desired behavior), rat receives a food pellet (reward). The goal is to reinforce the behavior with immediate gratification. Wait too long between the desired behavior and the reward and our little rat pea brain won’t be able to discern what the reward is for. I realize I have broken this concept down to some pretty insulting terms for the rat, what I am trying to do is reinforce the notion to the supposed big brains doling out the rewards.

This brings me to this weeks post on employee referral programs and the reward philosophy the Big Brains come up with that are associated with these programs. At a high level, the concept is simple.  It is called an employee referral program. These programs are usually not called:

  • “Refer an employee and wait 3 months” program
  • “Refer an employee, the company will put the candidate through an interview loop and make a hiring decision, but you still have to wait 6 months before we justify giving you a reward” program.
  • “Refer an employee, watch the employee quit after 5.5 months because of mis-management, and don’t get a reward because your referral wasn’t here for the required 6 months” program.    

If a rat, I mean employee, refers a candidate that goes through the interview loop and is subsequently hired, the company will generally provide some type of spiff to the employee that made the referral. Call it a bonus or call it a bounty. I am pretty sure BF Skinner would have called it a “reward”. I have seen employee referral programs hand out bonuses that range from zero /nada /nothing, to $10K.  Yes, $10,000.00 for a employee referral.  (If I were an employee in the company handing out $10K, I would be neglecting my day job and trying to find candidates on LinkedIn. It actually inspires me to quit my job, get through the interview loop with one of these companies using my Nasty interview techniques and then just start trying to recruit candidates and making employee referrals. I would take vacation days to attend job fairs and troll the aisles like a sleazy sales guy at an industry conference.  Of course, I would be providing interview coaching because by God, I am motivated to get this candidate hired. For $10K, I will beat the candidate like a rented mule till they understand what needs to be done, what is at stake, and the right answers needed to land a job. We don’t need the truth when answering interview questions we need whatever is going to get me the $10K bounty, but that is an entirely different blog post.  My point being. . . motivate the behavior you are trying to reinforce. 

But I digress.  I usually don’t take offense to the “size” of the prize when it comes to employee referral bonuses. If it is small “reward” like a couple of movie tickets, I can sell this as a gesture of thanks from the company. If the reward is generous, the concept can be spun as a company perk and statement that the company believes in its employees and its referrals.  What gets my goat is the timing on the reward. 

Too many companies ask internally referred candidates to be employed for 6 months, 9 months, or 1 year before a referral bonus is awarded to the employee that referred the candidate. I only know of one company that rewards employee referrals on the first day of the new hires employment. Thankfully, I work with that company. We don’t care who comes up with the referral.  If you don’t work with our company and you refer someone, we give you the spiff.  (I just received a referral from a candidate I interviewed that wasn’t a fit, but he knew someone who was and yes I capitalized on it. Obviously, I provided a great candidate experience. I hired the referral from the non-employee and said thank you with the tablet of his choice.)  

If you want to reward referrals, give a reward every time an employee brings you a warm body. You may get a bunch of crappy referrals but back to Skinner, you have to reward the desired behavior and balance that with the timing of the reward. If you want to reward for referrals that get hired, reward the employee that made the referral on the day-of-the-hire. If you want to frustrate employees who have large networks of potential great employees make them wait 6 months before saying “thank you”.    

The rat, I mean employee, that made the referral doesn’t have any input on the results of the interview process. (They have a good idea of what a successful candidate looks like because they are working with everyone that made it through the interview loop.) Referring employees usually do not have any input on the success or failure of the new hire over the course of 3, 6, or 9 months. If the candidate can make it through the hiring process then the next 3- 6 months is on the hiring manager to manage their success or to failure.  The hiring loop, hiring manager, and the HR partner made the decision to push the offer letter to the internally referred candidate.  Why hold out on the thank you to the employee who made the referral until the new hire proves themselves?  

The message human resources and the hiring manager is really sending is:

“We made the hiring decision, but if this new hire doesn’t work out, this is the fault of the employee that made the referral.”  

If you want to leverage the network of your employees, deliver a timely “Thank you”.

See you at the after party,

HRNasty

nasty:  an unreal maneuver of incredible technique, something that is ridiculously good, tricky and manipulative but with a result that can’t help but be admired, a phrase used to describe someone that is good at something. E.G.  “He has a nasty fork ball”.

If you felt this post was valuable, subscribe to the free updates, “like” us on Facebook and leave a comment below. Thank you!

  • Aaron

    I can tell you another company that pays referral on day one of the hire: SMART Technologies.