Employee Referral Schemes

Employee referral scheme pertaining to recruitment depends upon the nature of industry. Some of the industries which are more man power intensive always fall short of man power. Under these circumstances HR department always remain under pressure for recruitment and retainment of employees. Employees referral scheme plays a big role in this context. It has both positive and negative impacts on the organisation. Negative impacts can never be eliminated but yes these can be minimised for further consolidation of scheme. Some points need to be taken care of, while preparing the employee refrral program:-

1. Policy should be meant for a particular category of employees. This will help in maintaining the professionalism in the company.

2. Employees must be made aware of the parameters expected by the company from new recruit.

3. Monetary benefits can be shared with the employee whose recommendations helped organisation to finalise management in selecting the candidate.

4. These monetary benefits can be shared in number of stages e.g 15% of cost of hiring may be paid to concerned employee on joining of new employee. Another 25 % after completion of one month of service by new joined and balance after the completion of three months of service or after confirmation of employee in to services of company.

5. The reasons behind the above is that the recommending employee will help the new joined in apprising the culture of organisation thus reducing the settle down time.

6. Back ground of the new selection can be verified from the present employee.

7. The recommended employee should have minimum two years of service in the organisation.

8. Employees who have been issued warning letter or chargesheeted in the past should be barred from entering the scheme.

9. Not more than two recommendations should be accepted through one employee during a year. This number may depend upon requirement and present strength of organisation.

10. Negative impacts like unionism may enter into the organisation. Unity among the known are more as compared to independent. Psychometric impacts on known cases are more effective and may result in frustration and demoralisation.