Human Resource Management 15th Edition by Robert Mathis,John Jackson,Sean Valentine ,Patricia Meglich

Exercise 2

Employee Referrals Go "Social"
Many managers dream of taking a good idea and making it better through the use of technology. Chicago-based data security firm Trustwave has put its employee referral program on steroids by making it easy for employees to refer connections from their social networks. The HR department's weekly broadcast to its 1,100 employees highlights four featured job vacancies. Employees are encouraged to pass along these job leads to qualified network connections on LinkedIn, Facebook, Twitter, and other social medial platforms.
Employees who refer an individual who is eventually hired score a referral bonus of $5,000. Employees who refer the most new hires are recognized within the company and earn other awards. At one point, this partnership between employees and the company helped Trustwave fill 25% of its 399 new hires through employee referrals. Their results are consistent with industry averages of approximately 30% hires by referral.
Social networks are especially valuable because employees often remain in contact with former coworkers, professional associates, and classmates from college or trade school. Newgeneration referral software allows employees to share their networks with the company. Then, when job vacancies match someone in the employee's network, the software notifies the employee and suggests that the employee get in touch with that connection. Because it is voluntary, only those employees who wish to share their networks are included in the automated process.
Employee referrals can save time and money, and they can result in better hires for the organization. Leveraging employees' social networks can speed up the process and help companies find hidden talent.
Given these practices, consider the following questions:
How would you determine the appropriate financial bonus for employee referrals?