The Booby-Traps that Employers Should Watch Out For while ERP-ing (Part 1)

Of course, Employee Referral Program is one of the smartest decisions that your organizations could ever make. It has the potential to take your recruiting process all the way to heaven if you do it right. If used properly, ERP’s can increase quality hires and be overall beneficial to your business. But with every positive, there follows a negative. If your organization is not careful, it may step into the few bobby-traps ERP has, which can be detrimental, essentially killing the program in a short period of time.

To avoid walking into these traps, whether small or even legal, it is vital for organizations to recognize potential mistakes and correct them before they become an issue. As well, by mitigating risk, you avoid underperforming the potential of your ERP. The following are common mistakes that organizations make with their ERP’s:

Excluding HR and executives from the program
HR professionals and senior executives are expected to be ambassadors for the organization and proactively seek out employees, whether it’s part of their job description or not. But most executives, and HR professionals, already have so many responsibilities. They have a hard enough time maintaining their internal connections, let alone reaching out to external connections who might be interested in joining the organization. By minimizing their responsibilities and alleviating pressures, they will be able to efficiently and effectively complete their tasks. This will be more beneficial not only to the organization but to the HR professionals and executive.

Lack of strategy
An ERP should be carefully thought out and well executed. Organizations that simply assign a dollar amount to the reward without checking to see if it will engage employees, risk having the program backfire on them.

Also, most employees respond to non-cash incentives, such as extra paid time-off, a day of golfing or an afternoon at a spa. It’s important to find the right balance between cash and non-cash rewards to ensure all employees are engaged and participating in the program. This will increase satisfaction leading to better performance

Centralized approach to an Employee Referral Program
Large organizations often find themselves in a dilemma in how to compensate employees and regions on a worldwide scale. People around the globe have different cultures that result in different interests and different values of rewards. Does an employee in India deserve the same amount of reward value as their colleague in the United States? What if an employee from one country refers a candidate to another region with another reward amount?

Equal rewards
Organizations often have a standard referral amount for various positions, sometimes irrespective if the vacancy is for a VP of Sales, or administrative assistant. Organizations will often reward a hard-to-fill vacancy equally as easier to fill opportunities. The lack of distinction between the possible rewards will not incent the employees to refer hard to fill positions, but instead will direct a focus on the easier opportunities.

The points mentioned above are just the first four booby-traps that you should watch out for while executing your employee referral program. We will be discussing the rest of the dynamites of ERP in our next blog post!


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