Referred for the Job, Less Welcome by the Team

Employee referrals are a common way to source candidates for open roles within an organization. While it would seem like a positive and beneficial way to bring in new team members, reactions from existing staff are unclear.

It’s something Smith’s Rellie Derfler-Rozin, academic director, Master in Management Studies (MiM) and Online Master in Management Studies (OMiM) and co-author Teodora Tomova Shakur of Texas Christian University, explored in a new paper, "The Referral Penalty: Decreased Perceptions of Merit Undermine Helping Behavior Towards Referred Employees.”

“Everyone uses referrals. It actually is positive because people who are referring someone for a role feel responsible,” Derfler-Rozin said, noting that someone making a referral knows the candidate they recommend will also be a reflection of them.

Derfler-Rozin’s previous work in this area inspired Shakur to inquire about collaborating on this subject. “She had this prediction that maybe current team members have this in their mind - the new employee has been referred, meaning they have leveraged social networks. So they’re probably not as merited because of this.” Employees who’ve been on the team a while may see it as some kind of justice violation or think the new worker may not be as qualified. People tend to hold simplistic views of other people’s attitudes and behaviors, and this can be another manifestation of this bias.

The researchers sampled employees from industries in which referrals are normative, from a cultural context that is positively predisposed toward referrals, confirming their prediction. Derfler-Rozin said in a subsequent study, they aimed to enhance the generalizability of the findings, finding supporting evidence that led established team members to offer less help to referral beneficiaries as a way to “correct” for the perceived merit violation. The researchers were careful to show that the candidates were described as not only referred, but also that they went through a robust interview process and have, in fact, been good performers. Even in these situations, incumbent employees were still less likely to help and support these new hires, an effect mediated through decreased merit perceptions

One of the key recommendations from the research is ensuring that leadership clearly and transparently communicates the exact assessment procedures referral beneficiaries went through to alleviate concerns about merit deficiencies. Additionally, leadership can involve employees on a rotational basis in some hiring processes with the hope that such involvement could mitigate some of this bias. 

Derfler-Rozin noted that established research has shown that referred employees are actually good performers, yet the assumption may remain that they are not. “We tend to keep having those simplistic assumptions about networking. It is either networking or merit. It is not both.”

There is value in making the referral process clear and highlighting the impact that comes with employees making recommendations for new hires, something Derfler-Rozin hopes that organizations will understand, because these referring employees value the company and the company values the employee.

“For me, and this is kind of a broader theme of my research agenda, it is this notion of trying to document and then maybe break those zero-sum mindsets and simplistic assumptions that people make about others. How do we actually break this [trend] at the workplace?”

Read Derfler-Rozin’s latest work, “The referral penalty: Decreased perceptions of merit undermine helping behavior towards referred employees.”