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Employee Referal Scheme
Human Resources » Policies & Samples

Chrm Message From: kannan_hrd Total Posts: 31 Join Date: 15/12/2006
Rank: Executive Post Date: 30/01/2007 05:01:25 Points: 155 Location: India

Dear All,

We are planning to implement Employee Referral scheme in our company (Small IT company having 100 staffs). So i need your suggestions and sample referral policy .

I am looking forward forward for your kind cooperation in this




Chrm Message From: paulthomas Total Posts: 43 Join Date: 15/12/2006  
Rank: Executive Post Date: 30/01/2007 22:53:23 Points: 215 Location: India

Dear Krishnan,

You may find below the basic components of the "Policy for Employee referral scheme"

* Under an employee referral scheme, existing staff are offered a cash incentive to recommend friends or former colleagues for vacancies within the company - the bonus payments are only made if the recommended candidate is successful in his or her application.

* The payments are also typically dependent on a number of other conditions being met. There is usually a probation period which new recruits must complete satisfactorily (e.g. 3 months) before the employees who recommended them are paid a bonus.

* There may also be eligibility criteria governing who can make a referral (HR department employees are usually excluded), as well as restrictions on the types of vacancies covered.

* It is advisable to advertise within company which positions are under referral scheme and what will be referral bonus

* Here are some typical bonus ideas:
- Cash Reward (more money depending on level / type of position)
- Non Cash rewards (Holiday, Camera, Mobile Ph)
- Reward more for referring more

Paul Thomas

Chrm Message From: aishwaryaroy Total Posts: 46 Join Date: 15/12/2006  
Rank: Executive Post Date: 30/01/2007 23:01:13 Points: 230 Location: India

Employee Referral Programme / Scheme

In the present scenario, companies are depending on 3 types of recruitments :-
1. Campus selection (fresher)
2. Job Consultants / Paper Ads
3. Employee referrals

Of the three, the one most preferred by HR are the Employee referrals. Some of the reasons being, easy to get potential, reliable and experienced candidates, low or no investment, employees feel that they can work with their friend(s), which will create lively environment at work and increases productivity for company

But still most of the HR gives preference to those who meet the job criteria…

Q) How can one design the referral recruitment program?

* Whenever an Employee Referral Program is to be announced, there should be some basic guidelines that should be followed. Like what is the total requirement and time frame to fill that requirement, what type of positions are offered, who are eligible for referral program, sketch candidate profile, how much %age of candidates are reserved under ERP as company may outsource some %age of manpower requirement to consultants.

Q) How to communicate the referral scheme to employees?

Whenever there is a man power requirement due to project expansion etc, an internal mail / poster on notice board should be used for announcing Employee Referral Scheme. There should be a dead line as till when an employee can refer a candidate. Also include how much money will be paid for each successful referral and when it will be paid.

Q) What should be the guidelines or rules and regulations?

Basically every job carries some minimum requirements like X- yrs of Exp. Tech / Non tech and programming skills, various domains / projects he worked on and job abilities required for that post.

Q) What procedure should be followed?

Collected resumes should be screened and then candidates to be short listed and informed to both candidate and respective employee who referred him. Like every other interview, each candidate should under go three rounds of interview and then negotiate about pay if got selected. Also it will be better if a clause like minimum work period a candidate should stay in the company / though not mandatory.

Q) What should be the incentive given to the referee employee?

Incentives should be based on number of candidates who successfully got placed. Each selected candidate should have completed minimum period – say 90 days (Induction + Training and Job) before company pays incentive. {This clause is because company has to recoup the money invested on the candidate and that paid to the referring candidate}

Incentives should be anything from 2k per candidate and should increase with every additional candidate referred and successfully completes 90 days. Also announce reward for TOP REFERRER of the month / week.

Hope this information is useful for all those working on Employee Referral Program..


Chrm Message From: srini Total Posts: 163 Join Date: 15/12/2006  
Rank: Leader Post Date: 30/01/2007 23:06:46 Points: 815 Location: India

Employee Referral Policy

To attract talent through referrals from employees

This scheme is applicable to all employees of (X Company), with the following exceptions.

1.Directors, Senior Managers are not eligible.
2.Members of HR are not eligible.
3.Managers referring employees for their own group are not eligible.
4.No referral bonus for referring freshers.

1.The current Human Resource requirements will be intimated to all by HR. Please visit our website for details on open positions.

2.The softcopy of resume of referred candidates should be sent to referrals

3.The first level screening of the resume would be done within 24 hours of the receipt of the resume. Further status on the referred candidate would be communicated within seven working days from the day after the first level screening.

4.All short listed candidates for the interviews would be intimated through mail, a copy of which would be marked to the referrer.

5.The referral amount would be paid only after three month's of successful completion of the referred candidate at Company.

6.The referral amount is subject to applicable taxes.

7.An employee who has submitted his/her resignation to (X Company) but has referred candidates who are yet to complete three month's stay in (X Company) will not be eligible for the referral amount.

8.If the same reference is received from different employees or vendors, the decision on which one to consider is based on the date of receipt of the resume.

9.The employee referral amount for any candidate who has been made an offer by (X Company) will be Rs _____/- only.

10. All contract Employees are eligible to referral amount mentioned in the Policy. The payment of the referral amount would be made to them through a cheque/ Bank Transfer.
11.Resumes sent to referrals are valid for a period of 3 months.

12.The amount of referral payable depends on the referral scheme applicable at the time the resume was referred or sent

13. This policy is subject to amendment without notice, however all such changes will be intimated to employees from time to time

Hope this will clearly assist you in framing one for your co.

Chrm Message From: hr.hitesh Total Posts: 32 Join Date: 15/12/2006  
Rank: Executive Post Date: 30/01/2007 23:12:59 Points: 160 Location: India

One more sample of Emploee Referral Policy..

1. Objective:
To state the procedures and guidelines for rewarding those employees of XYZ who help identify and attract suitable and competent talent, irrespective of the industry, in order to meet our resource requirements at an optimum cost.

2. Eligibility:

2.1 All employees including trainees on rolls of the companies are covered under this policy.

3. Procedure:

3.1 Employee may refer individuals who fit the specifications given in job descriptions for vacant positions which Human Resources posts from time to time. In case the resume is already available in the data bank, the referral process will be terminated at this stage.

3.2 The employee’s role will be limited to the submission of the resume of the candidate. After this the regular process of short listing and interviews will be applied to the referrals also.

Note : The employee making the referral will not in any way be involved with the interview or salary fixation of the candidate.

3.3 A referred candidate if selected in the company, results in the employee being eligible for a gift voucher as per table in Clause No. 4

4 Reward:

4.1 Points will be allotted to the employee for every selected candidate as mentioned below,

Candidate Level Points
Vice President & General Manager Twenty Five (25)
Senior Manager Twenty (20)
Manager Fifteen (15)
Assistant Manager Ten (10)
All Others Five (5)

4.2 These points will be accrued by the employee after 6 months, provided the candidate referred is employed with the company for three months. The employee will lose all points if the candidate leaves the company before completion of 3 months with the company.

•For an employee to be eligible for a reward he/she should have accumulated a minimum of 5 points during his/her tenure at XYZ
•Points will be translated into the following rewards :-

Points Reward
05 - 09 points Cash voucher worth Rs. 1500/-

10 - 29 points Cash voucher worth Rs. 6000/-

30 - 49 points 2 nights and 2 days (for two) stay in Hotel any where (Standard class)  / Cash voucher worth Rs 15000/-

> 50 Points 4 night and 4 days (for two) stay in Hotel anywhere in India (Standard class) / Cash voucher worth Rs 20000/- reward has to be one corresponding to the points accumulated. The employee is, however, not allowed to split the points into multiple rewards in the lower-point categories.

For example, an employee with a score of 39 points is entitled to a reward of 2 nights and 2 days (for two) stay in Hotel anywhere in India (Standard class) He / she cannot take two gift coupons of Rs. 6000/- and Rs. 1500/-. Once an employee converts his / her points into the corresponding reward, the employee’s score of points is reset to zero.

Note: The employee has to select the choice of hotel from the list given by XYZ. He/she cannot opt for any other hotel at any other location. Travel: Employees with their companion will travel to the Hotel of their choice as per their travel eligibility in the business travel policy of the company. Lodging: Employees will be reimbursed up to Rs. 1000/- for meals for two and Rs. 500/- (for one). Tea, coffee, soft drinks will not be reimbursed. However, no alcohol will be reimbursed for any employee. Leave: Employees availing the reward will be granted leave as per their entitlements mentioned leave policy of the respective company. No extra leave will be granted over and above their entitlement. All travel, boarding and lodging bills need to be submitted in original to the finance & accounts department by the employee, within seven days of his/her returning from the trip. In case of an employee being unable to avail of the reward due to work exigencies or does not want holidays, the option of converting accumulated points into cash will be available as per the table below. This however needs the specific approval of the concerned Functional Head and the HR Manager

Option B:

Points Reward in Rs.
30-49 points 15,000/-
> 50 Points 20,000/-

Note 1 : Conversion from points to cash will be applicable only once every financial year i.e. March.

Note 2 : The employee will be eligible for the gift vouchers provided the candidate referred is employed with the company for three months.

All recommendations made by XYZ employees must come from their personal contacts/connections and not through any recruitment agency.

Rewards will be taxable as per taxation rules prevailing at that point of time.

Any exception to the above policy will need to be signed of by the Managing Director/ CEO as the case may be.



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