Effects of Referral Bonus Characteristics, Risk in Referring, and Commitment on Referring Behavior

Research has provided strong evidence that employee job referrals result in positive organizational and job seeker outcomes. Yet research has been limited on how organizations can actually increase the likelihood of obtaining such referrals. Using the theoretical lens of expectancy and prospect theory, we start by testing the common assumption of most employers: that a referral bonus motivates employees to refer and that higher bonus amounts incite greater likelihood of referring. Additionally, we explore the effect of a payout contingency, or a delay in payment, in relation to referring likelihood. Our study also theoretically develops and quantitatively investigates the effect of risk in referring, or the generalized threat individuals have to their organizational reputation and well-being if the referral falters. Finally, we investigate affective commitment’s impact on referring likelihood and its interaction with the referral bonus. Results largely supported our predictions regarding bonus presence, b...