Employee Referral Policy - Software Company

Hi Friends,
I am working as HR for one of the product based US software company. Our management is ready to pay the referral bonus for the referrer employee, which is same we pay to the consultant as the industrial standard of 8.3% of the finalized annual CTC.
But,if I refer most of the employee referral policy of the company it states some minimum fixed amount like 20K,25K....based on the cadre.
Could any one of you clarify me, the impact of implementing the management option. Is there any policy or law regulating the referral policy.
Rgds,
Vineetha

Dear Vinitha,

If you are hiring for identical pay packages , declaring a block payment as a feral bonus would make sense.

However, when there is a disparity in pay and you are hiring for various kinds of roles, here's how the 8.33% for an employee works.

The amount is divided into three parts. The first part is paid when the candidate joins the company.

The amount is disbursed depending on the pay cycle. Suppose the candidate joins within 15th of a months and your pay cycle closes by 17 hence the employe who referred receives the bonus, along with that month's salary. However, if the candidate joins after 17 th the payment would be processed, in the following month's payroll .

The second payment is made when the candidate clears the training assessment and is ready to join the production team.

The third payment is rolled out at the confirmation of the candidate .

The payment is bifurcated only to negate the affects of attrition or misfit.

Understand what works best for you and set the processes as per that.

Wish you all the best !

Dear (Cite Contribution),
Thanks for the reply.
But my view is meanwhile we should not disclose the salary detail of the new employee for anyone. If we are going to share the percentage(8.33%) of the salary as the referral bonus definitely there is a possibility of leaking the details of his salary. Again it may create some nuisance in the work environment pertaining to the disparity pay. How could I tackle this.

Hello,
Instead of giving referral bonus on percentage of CTC basis, you should fix up a fixed amount depending upon the grade of incoming employee and his experience. This amount is released on completion of the probationary period by
the new- encumbant. It is also a condition that at the time of release of referral bonus, both the employees should be on roll of the company. In case the referring employee has left the company by then, in that event he is not entitled for this bonus. It should be properly defined in the company hand book.

Thanks a lot.....Mahaveer...
Yes...The thought of documentation of the clarity on the policy is very much appreciated. Also this strategy will work for attrition control to some extent as well.
Regards,
Vineetha

Hi,
Employee Referral Policy recognizes that your employees play an important role in the talent acquisition process - they have a strong understanding of your Business, its culture and values and what it takes to be successful in a high performance and dynamic growth environment.
Some consideration while drafting your policy:--
If the employees refers family members / relatives may be referred, but ensure that not entitled for bonus.
If more than one employee refers the same candidate, the one mailing above the email id first will alone be considered
Regs
Narayan

Hi Narayan,
Thank you....
I would need further clarification on the first line of the consideration points. Even though candidates are referred they will have to through all rounds of interview. In such scenario blocking the referral bonus for referring the family members/relatives is mandatory.
Please elaborate the point.
Rgds,
Vineetha

Hi Vineetha,
It is not mandatory. Its upto the Your Organization Top Mgmt decision.
Regards,
Narayan