Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/262108 
Year of Publication: 
2022
Series/Report no.: 
ECONtribute Discussion Paper No. 164
Publisher: 
University of Bonn and University of Cologne, Reinhard Selten Institute (RSI), Bonn and Cologne
Abstract: 
Employee referral programs (ERPs) are randomly introduced in a grocery chain. On direct effects, larger referral bonuses increase referral quantity but decrease quality, though the increase in referrals from ERPs is modest. However, the overall effect of having an ERP is substantial, reducing attrition by 15% and significantly decreasing labor costs. This occurs, partly, because referrals stay longer than non-referrals, but, mainly, from indirect effects: non-referrals stay longer in treated than in control stores. The most-supported mechanism for these indirect effects is workers value being involved in hiring. Attrition impacts are larger in higher-performing stores and better local labor markets.
Subjects: 
Management practices
organizational economics
hiring
respect
JEL: 
M51
M52
D23
Document Type: 
Working Paper

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