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25 Oct 2019

GSOM SPbU hosted a scientific seminar on the effectiveness of referral programs for employees

On October 10, 2019, at GSOM SPbU on Volkhovskiy per., 3, in research seminar led by Nick Zubanov, PhD (University of Konstanz, Germany) on the topic: What Do Employee Referral Programs Do? The seminar was attended by teachers, students and postgraduate students of GSOM SPbU.

 

 

Nick Zubanov shows the result of the field experiment with a large grocery chain, employee referral programs (ERPs) that were introduced in randomly selected stores. The ERP resulted in a modest increase in referrals. Larger referral bonuses increased the number of referrals but decreased referral quality. The overall effect of having an ERP is substantial, reducing employee turnover by 15% relative to the base level and decreasing labor costs by up to 3%. These effects occur, partly, because referrals stay longer than non-referrals, but mainly because all workers in the ERP stores stay longer, even in the stores where no referrals were made. Multiple surveys reveal workers’  valuing being involved in hiring as the most plausible mechanism behind the observed effects.

 

Nick Zubanov — Doctor of Economics, Professor (W3) of organizational economics at University of Konstantz, Germany. He taught management strategy at Goethe University (Frankfurt), economics at Erasmus University (Rotterdam) and HR management at Tilburg University. He also was employed of PBC Bureau, Netherlands on economic policy analysis. Research interests of Professor Zubanov: effectiveness in management; middle managers, personnel turnover and sales; competition in the product market and performance; ignoring risk, multiplicative noise and effort with linear stimuli; a variety of skills and work efficiency.