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Employee Referral Policy, Program or Scheme

To reap the best employee referral advantage of the best referral program it is necessary to introduce it well to the employees. Creation of clear guidelines on how employee can participate in such program can make it a real success. This policy contains the details about the objective, purpose and guidelines which are to be followed for making a successful employee referral.

Employee Referral Policy

The employee referral policy simply means a process of recruitment wherein an existing employee refers a candidate for an opening in the organisation. It is one of the most prominent sources of recruitment. If we want to understand referral programme meaning we can say, the employee referral program is designed keeping in mind equal opportunity for all employees to refer their candidate. Through this policy we make it very clear that we have confidence in our employee judgement and our employees understand our organisation culture and requirements very well. It is one of the best sources of hiring however it needs to be transparent and right. 

Why an organization must have Employee referral program or Policy?

  • Qualitative Hiring: Employee referral is qualitatively best source of hiring as employee making a referral is well known with the organisational culture, they refer someone who can make the best fit in the organisation professionally as well as culturally. Employee referral scheme thus helps in qualitative hiring.

  • Increase speed of hiring: Employee referral speed up hiring as it saves recruiters time spent in selling the position to a new candidate. Internal referral speed up hiring process.

  • Boost employee moral: It boost employee moral as employee feel good and important as they are contributing positively in employee recruitment also referral incentive in employee referral also an important factor in boosting up moral.

  • Brand Image: It increases the brand image of the company. It is an employee referral advantage.

  • Cost effective: It is one of the best way to reduce cost spent in employee hiring through an external source.

Below mentioned employee referral template explains the employee referral programme in detail. There can be various employee referral programme examples wherein referral is paid differently in different companies. Some firm pay money, days off, ticket for an event, any trip etc. however still as per employee referral example shared in employee referral template above shows the most commonly used employee referral in organisations. According to employee referral definition an employee is being rewarded for providing good quality resource to an organisation. As per one of the survey it has been found that maximum employee referral is in the organisation which pay good amount of incentive for making a referral. It has also been found that the employee who refers become more loyal for the company they are working for. Lately there have been employee referral examples wherein different software tools are in use as by using certain tools referral process can become more organized, also the element for being fair is also not compromised by using a reliable software tool.

Disclaimer: The content prepared has been created with greatest care. These policies have been prepared for sample. However for accuracy and completeness cannot guarantee. The user is therefore requested to professionally check or to have professionally checked the suitability of all content for its use.



Employee Referral Policy - A  Sample Template


Referral Policy Sample


1. Employee Referral Policy Introduction

2. Policy Purpose

3. Scope

4. Employee referral process

5. Approval required

6. Guidelines for employee referral

7. Payout Matrix

8. Accountability

9. Responsibilities

10. Effectiveness of Employee Referral Program or Policy

11. Review of Policy


1. Employee Referral Policy Introduction

To start, lets understand few important part of employee Referral :

What do you mean by an employee referral?

According to Wikipedia employee referral can be explained as: It is an internal recruitment method employed by the organisation to identify potential candidates from their existing employee's social network. An employee referral scheme encourages a company's existing employees to select and recruit the suitable candidate from their social network.

Employee referral scheme is one of the important sources of recruitment which is used worldwide to fill vacancies of the company through their existing employee reference. It is one of the most cost-effective measures to hire employees. The policy below explains the guidelines, process, documentation required to fill a given position through employee referral. The policy also emphasises on timely payment for the employee referral made by employees which in turn motivates the employees to refer more candidates in the future. Payment process must be organised and should follow a standard process with proper documentation and with approval in place.

2. Purpose:  The purpose of employee referral policy is to explain the procedure to be followed while referring to a candidate and also to smoothen the process for the existing employees and those they refer.

3. Scope:  This policy is applicable to all the permanent employees of the company.

4. Employee Referral  Process

The employee referral process goes with 12 most important points, these points are :

1. The referral programme starts with the posting of the vacancy in the organisation by recruitment team on the web portal, by placing the advertisement on job site or notice board or through an announcement in the meeting or it can also be done by sending an email to employees.

2. The job description for the given position is shared with the employees along with job posting.

3.  point is that the employee after noticing the requirement looks into their network and refers to a candidate if it is found suitable.

4. They send the CV to the recruitment team at the email id mentioned in the advertisement.

5. The Recruiters review the resume of the candidate and match the skill and qualities with the job description.

6. If found suitable under the employee referral programme recruiter forward the CV to the hiring manager.

7. The employee referring a candidate must mention the employee code, name, designation, department, date of joining and the number of days completed within the organisation.

8. Recruiter checks in all the details filled in the employee referral claim form.

9. The Candidate goes through the interview process and if shortlisted and selected informed by the recruiter and Human Resource Department.

10. After the final selection, the employee who has referred the candidate is informed about the selection of the candidate.

11. If the candidate joins the company, the employee referral amount is paid to referring employee after passing of 3 months.

12. The referral amount is paid along with the employee’s salary.

5. Approval Required :

As per the employee referral policy sample following approvals are required for the employee referral payout:

1. Hiring approval from the immediate reporting manager

2. Approval from the Head of department and HR Head.

6.  Guidelines for employee referral

1. The employees should mention their name and code while referring a candidate.

2. An employee following the employee referral program policy can provide maximum referral in a year.

3. Only an active employee is eligible to receive employee referral amount for the candidate referred by them.

4. In case the employee has resigned during 3 months from the date of joining of the candidate referred, he/she will not be eligible to referral amount.

5. The resume sourced by the candidate will be valid for a time period of 3 months.

6. If 2 employees have referred the same candidate only the employee who has first referred will be eligible to receive referral amount.

7. Submission of a resume to recruitment team is the responsibility of employee referring the candidate.

8. The interview and selection process will happen on merit basis only as per employee referral  policy sample 

9. No special advantages would be given to the referred candidate.

10. Candidate directly approaching the HR for submission of resume will not be considered for employee referral.

11. An employee however as per the "referral policy" cannot refer any family member or blood relative or former company employee.

12. Also, no referral will be considered in case the candidate resume exist already in the database.

13. The hiring process must be completed within 90 days of referring a candidate.

14. Senior management and HR are not allowed to make any employee referral.

15. All Hiring decision will be kept confidential.

16. The referral employee will be informed only once the referred candidate has been finally selected.

7.  Payout Matrix 


Referral  Amount 










8. Accountability: 

1. HR team must ensure that the employee referral process is followed in the most transparent way.

2. All employees while making any referral must adhere to the company defined recruitment policy.







An existing  company employee refer a candidate by adhering to employee referral  policy

Sending  approval to HR  for payroll processing 

   Employee  referring the candidate 


The Complete review of the details by the recruitment team

4 Days

Recruitment  Team 


To get the hiring approved from HOD, immediate manager and send to HR.

5 Days

Recruitment  Team 


Payment  approval was taken from Head HR

2 Days

Recruitment  Team


Sending  approval to HR  for payroll processing 

 5 Days 

Payroll  Team 


10. The Effectiveness of policy:  The effectiveness of policy is monitored by the HR team to ensure the policy is applied fairly.

11. Review of the policy:  The policy may be reviewed at any time on request of staff or management but will be reviewed yearly automatically. 


Employee Referral Policy Sample - 2

Objective:  The objective of employee referral program is to attract a candidate for a given job opening by involving existing employees. This method helps in the recruitment of right candidate which is the need of the company.

Purpose:  The purpose of this employee referral policy sample is to award the employee who has referred a candidate for a particular position in an organisation.

What is employee referral programmed policy?

The employee referral programme policy is a process wherein existing employee can forward a candidate profile for an opening in the organisation they are working for.

What is employee referral bonus programmed?

Employee referral bonus programme can be explained as a program wherein employer reward an employee with certain amount of money for suggesting a candidate for a particular vacant position in the company and the candidate finally get selected or hired.

What is internal referral?

Internal referral can be defined as a term used when an employee suggest a candidate for an internal vacancy within the organisation and the candidate is being hired.

What is referral incentive?

The amount of money being given to an existing employee for referring a potential candidate is known as referral incentive.

Eligibility: The employee referral policy sample is applicable to all the regular employee of the company except the HR employees, the senior management team and the hiring manager for a particular vacant position.


  • The employee referral policy is applicable to all the regular employees of the company.

  • The referrer employee must fill the referral form and submit it to HR before the entire recruitment process starts. This is the beginning step of employee referral programme policy.

  • The employee referral form must be checked in properly and duly signed by the referring candidate before submitting it to Human Resource department.

  • The role of the employee who is referring the candidate is limited to deposition of resume. Interview and other formalities will happen as per the normal process of recruitment only. This is necessary to set up a benchmark for best referral programme.

  • Referral amount will be paid on completion of 3 months from date of joining of the candidate. The amount will be processed with the completed month’s payroll.

  • Both the existing employee and the referred candidate should be on the payroll of the organisation and must be active employees of the company to take the benefit of employee referral bonus programme.

  • In case of duplication of referral amount, the employee who has first referred the candidate will be given preference. The first employee will be eligible for internal referral.

  • In case a candidate directly come and submit resume, it will not be considered as employee referral.

  • Employee would not be eligible for any referral amount in case candidate resume already exists in company’s databank. This clause is under the employee referral scheme.

  • Selection of referred candidate depends on merit. Making a referral does not mean final selection.

  • In Case the referred candidate has to work under the employee who has referred him in 3 months of joining no referral will be paid in this case. This is as per the employee referral scheme.

  • In case the candidate has applied before the employee has referred him in such case no employee referral will be paid.

  • If employee resigns within the time duration of employee referral period, no employee referral will be paid to employee.

  • Only the candidate who meets the qualification required for a given position will be eligible for employee referral. The best referral programme nowhere justifies any biased recruitment process.

  • Referral should be made from the employee contacts only, no referral should be made with the help of any recruitment agency.

  • There is no limit for the number of referrals made by the employee.

Referral amount












Approval Required:  Any referral need approval from the following

  • Head of the department

  • Human resource department


Process for Employee

Referral Policy


  • Job opening is posted on company intranet page. Notice for the same is also posted on notice board. Notification for job opening can also be shared in meetings etc.

  • Employees view the vacancy details on intranet/Notice board.

  • Employee refer the candidate if he/she has someone in contact by filling in the employee referral form

  • Employee’s fills in all the details in the employee referral form and attaches the updated resume of the candidate and submit it to the recruitment department.

  • Recruiter crosscheck the details of the candidate and if the skills matches with the job description and other details found relevant, the recruiter sends the form  to Human resource and Head of department for approval.

  • Recruiter coordinates with the referred employee for interview.

  • The referred candidate undergoes normal interview and selection process. If selected, referred candidate is being notified for the same.

  • The recruiter sends the details to HR department regarding the referral amount to be paid to the employee who has referred the candidate after 3 months of joining the referring candidate.

  • Human resource make a note of the same in their tracker and process the referral amount once 3 months are completed by the referred employee.

Revision of the policy

The company reserves the right to revise, modify any or all clauses of this policy depending upon demand of business.

Explanation of the policy

Corporate HR department will be sole authority to interpret the content of this            policy.                                        

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