Wednesday, May 25, 2011

Why I think referral bonus is a poor excuse

The concept of referral bonus is a poor excuse to motivate employees to bring in their friends and family to the organization. Compensating employees in return of their recommendation for hire is a poor excuse to building corporate culture that allows employees to evangelize their work and organization to others.
Referrals is a fantastic idea. This creates a stronger bond between the employee and the employer.
Referral bonus however is a left brain trend. The concept of reward in return of getting your contact to join in for a position at the company requires a serious re-thinking. Instead, organizations must work on creating a work culture that acts as a catalyst in inspiring employees to bring in their contacts as future co-workers. Asking your acquaintance to join you at work is a way of adding new dynamics to the existing relationship. This new layer of relationship better be formed on the foundation of trust and honesty. I believe organization must look at ways in leveraging this new layer of relationship and create occasions of strong bonding. This could be the reward the employee would look out for, and cherish longer than a handful amount of cash.

A number of ideas cross my mind that organizations can work on as a replacement for referral bonus :-

a) Appreciate and recognize employees having one or more of their connections working in the company.

b) Reward roles like "Organization Evangelist" to employees that bring in referrals.

If you as a reader believe that this makes sense, add your ideas for the same, in the comments below.