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The dark side of employee referral bonus programs : potential applicants’ awareness of a referral bonus and perceptions of organizational attractiveness

Sara Stockman (UGent) , Greet Van Hoye (UGent) and Marieke Carpentier (UGent)
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Abstract
The purpose of this study is to examine the effects of potential applicants’ awareness of employees being rewarded for referrals on organizational attractiveness, based on credibility theory and the multiple inference model. In a first study (N=450), final-year students were less attracted to the organization when they knew employee referrals were rewarded, which was partially explained by lower credibility perceptions. Moreover, varying the specific characteristics of the referral bonus program (i.e., timing, size, type, recipient) did not improve potential applicants’ perceptions of credibility and attractiveness. A second study (N=127) replicated the negative effect of referral bonuses on organizational attractiveness and found that it could be explained by both potential applicants’ inferences about the referrer’s other-oriented motive and lower referrer credibility. Whether employees explicitly stated their referral reason was bonus-driven or not did not affect these results.
Keywords
word-of-mouth, employee referral bonus, multiple inference model, organizational attractiveness, referrer credibility

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Chicago
Stockman, Sara, Greet Van Hoye, and Marieke Carpentier. 2017. “The Dark Side of Employee Referral Bonus Programs : Potential Applicants’ Awareness of a Referral Bonus and Perceptions of Organizational Attractiveness.” Applied Psychology-an International Review-psychologie Appliquee-revue Internationale 66 (4): 599–627.
APA
Stockman, S., Van Hoye, G., & Carpentier, M. (2017). The dark side of employee referral bonus programs : potential applicants’ awareness of a referral bonus and perceptions of organizational attractiveness. APPLIED PSYCHOLOGY-AN INTERNATIONAL REVIEW-PSYCHOLOGIE APPLIQUEE-REVUE INTERNATIONALE, 66(4), 599–627.
Vancouver
1.
Stockman S, Van Hoye G, Carpentier M. The dark side of employee referral bonus programs : potential applicants’ awareness of a referral bonus and perceptions of organizational attractiveness. APPLIED PSYCHOLOGY-AN INTERNATIONAL REVIEW-PSYCHOLOGIE APPLIQUEE-REVUE INTERNATIONALE. 2017;66(4):599–627.
MLA
Stockman, Sara, Greet Van Hoye, and Marieke Carpentier. “The Dark Side of Employee Referral Bonus Programs : Potential Applicants’ Awareness of a Referral Bonus and Perceptions of Organizational Attractiveness.” APPLIED PSYCHOLOGY-AN INTERNATIONAL REVIEW-PSYCHOLOGIE APPLIQUEE-REVUE INTERNATIONALE 66.4 (2017): 599–627. Print.
@article{8517469,
  abstract     = {The purpose of this study is to examine the effects of potential applicants{\textquoteright} awareness of employees being rewarded for referrals on organizational attractiveness, based on credibility theory and the multiple inference model. In a first study (N=450), final-year students were less attracted to the organization when they knew employee referrals were rewarded, which was partially explained by lower credibility perceptions. Moreover, varying the specific characteristics of the referral bonus program (i.e., timing, size, type, recipient) did not improve potential applicants{\textquoteright} perceptions of credibility and attractiveness. A second study (N=127) replicated the negative effect of referral bonuses on organizational attractiveness and found that it could be explained by both potential applicants{\textquoteright} inferences about the referrer{\textquoteright}s other-oriented motive and lower referrer credibility. Whether employees explicitly stated their referral reason was bonus-driven or not did not affect these results.},
  author       = {Stockman, Sara and Van Hoye, Greet and Carpentier, Marieke},
  issn         = {0269-994X},
  journal      = {APPLIED PSYCHOLOGY-AN INTERNATIONAL REVIEW-PSYCHOLOGIE APPLIQUEE-REVUE INTERNATIONALE},
  keyword      = {word-of-mouth,employee referral bonus,multiple inference model,organizational attractiveness,referrer credibility},
  language     = {eng},
  number       = {4},
  pages        = {599--627},
  title        = {The dark side of employee referral bonus programs : potential applicants{\textquoteright} awareness of a referral bonus and perceptions of organizational attractiveness},
  url          = {http://dx.doi.org/10.1111/apps.12100},
  volume       = {66},
  year         = {2017},
}

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