Q. Is it good to pick up candidates through ‘employee referral method’? Why and why not ?

Explain
keeping in the background .

Answer :

Employee referral method is an internal recruitment process employed by organizations to identify

potential candidate from their existing employees.

Policy is good in the sense-

 Cost & Time benefit : It saves lot of time and cost involved in initial screening or preliminary
interview. In this case we can see that Rao is referred by the HR Director for a specified post.
 Getting Right candidate :This method provide a platform for young talent meeting
opportunities and selection of right person at right place is very much possible . Through
reference of HR Director , Mr. Suresh found the potential candidate for his production
department supervisor.
 Benefit by Candidate : From candidate point of view it is also saved time and energy of the
candidate who are the new applicant. Since Rao is a referral candidate , he has got
opportunities with less effort compared to normal candidate.
 Quality : Employees are most likely to refer qualified and skilled candidates as because referred
candidate reflects on the referring employee’s reputation. Best suited employee can be chosen
for selection as in case of Rao , Production manager found all required quality for specified job.

However there are some disadvantages also in case of ‘employee referral method’, these are the post
selection effects .

 Risk of getting alienated from other staff : When a employee came through reference there is
always a chance that workforce cannot be termed as even playing turf anymore. Most likely
they will hang-in together or differentiate themselves each other, thus raising the risk of getting
alienated from other team players. It is not sure that Rao will be alienated or not in future.
 Might lead to charges of discrimination : Fully dependent on referral system might face the
charges of discrimination from the rejected candidate.
 Lack of ideas : Selection by highly referral program may bring in the attitude of stick together,
which may hide the actual problem in the organization.
 Diversity of candidate : When relying on employee referrals , the diversity of candidate pool
will be limited as the references are likely to come for candidate from same backgrounds.