2) It no longer becomes optional once you make the offer to your employees. At this point you have established intent; especially if it is provided in writing. You cannot take it back once the other party involved has upheld their end of the arrangement.
The third rule sucks, in my opinion. Referral bonuses are a good deal for the company: they help the company to (1) recruit good employees and (2) save money on recruiting, since these bonuses are usually much less than the hefty fraction of an employee's salary that they'd have to pay to a headhunter. If you leave a company after referring somebody, it doesn't change the fact that you found the company a good employee and saved them money, so it would seem unfair to refuse to pay you the bonus, even if you're no longer an employee -- in that case, they'd be able to profit from your connections without giving you anything in return.
They wouldn't be able to get away with not paying a headhunter just because he sent his invoice in after the company decided to not renew their contract with him. The fact that they can legally get away with stiffing an ex-employee doesn't make it any more ethical.
That doesn't make sense. A "nice extra that might disappear any second?" That's worth as much as a hole in my pocket. If giving referral bonuses is company policy, nobody would imagine that it might "disappear" retroactively if the management didn't happen to feel like paying you that day.
Regardless of whether it's legal, it's totally unethical to behave that way.
Bonuses can be considered either contractual or discretionary. If there was any mention or implication that the referral bonus was discretionary, then the company can withhold payment for any reason, such as poor employee performance or low revenue/profits.
At my company, all bonuses are considered discretionary. They plainly and clearly lay out the parameters of the bonus structure, but they also reserve the right to withhold the bonus for any reason. They rarely reign in on their promise as it significantly hurts morale. However it is well known that if you leave the company before a bonus is paid out, that you will not receive the money, regardless of whether or not you have already fulfilled the parameters for the bonus.
Something similar has happened to me twice (different scenarios), and the only commiseration I can offer is that they are life's learning experiences. Now you know a little more to get everything mentioned down on paper before you sign. I find it hard to believe that the referral bonus wasn't mentioned in an email or other notification-level policy statement, but aside from that you're probably just going to have to eat it.
They certainly did weasel out of it, though. Obviously they were looking for ways not to pay it rather than to avoid bad blood. That's fine, karma, they stepped on you on the way up the ladder, etc. Not a lot you can do about it, probably (but I'll be watching the thread ;).
You either need to read the fine print of your employment contracts better, or you've never signed one that included a referral bonus. It probably would've been mentioned by your hiring manager, or whoever interviewed you for the position, or the HR rep.
The amount varies, but the last two places I've worked have spelled out their referral bonus amounts and terms explicitly.
I think it's fair to waive referral bonuses if someone is referred through the "trusted referral" process. If someone is dying for a bonus, they can still steer the candidate towards the company and let them go through the technical loop normally.
Am I the only one that isn't incentivized by referral bonuses? The last thing I want is the blame for a bad hire because I somehow referred someone ended up not being a good fit for whatever reason.
This type of post is really easy to say if you have some sort of personal equity in the business. The larger the business, the more that equity gets diluted.
I work in a MegaCo, which has these sorts of referral bonuses. In addition, teams in the company are spread out over individual clients. If I refer someone, it is more likely than not that I won't ever work with this individual. I'm paid by salary (not profit-sharing) so I don't have a financial stake in the efforts of the firm. I'm not management, so many decisions about what this new employee would be doing are removed from me.
If I don't get to work with my referral and I don't stand to gain equity from their work, a referral bonus makes the economic seesaw balance. Saying it's "pants on head stupid" is short-sighted and only applicable to extremely small companies.
>> The idea of a referral bonus is rewarding someone for /growing/ the team, and if you leave before that term is up, or if you leave before you file for the bonus, it's ridiculous to ask for it later – especially when you've already deflated your good will with a company
What is the "term" that you're referring to in "leaving before the term?" From the blog post, it seems like the author "grew" the team by successfully referring an employee who stayed for minimum of 6 months, which gives him the entitlement of the 10k bonus as per email discussions.
"Because you are no longer employed by Miso, you are not eligible for this bonus."
I must say, I completely agree. This is how it works. Your referral bonus is a perk, and nothing more. You didn't claim it. They weren't on top of it. You both failed here. But then you quit. And you left without it. That sucks for you, but they owe you nothing.
> Seeing as a non-contractual bonus is an investment in the employee that the company does in addition to the usual compensation
A bonus isn't a gift or an investment: it's paid to compensate for going above and beyond the call of duty. In this case, he did so by delivering a referral. He should be paid, plain and simple.
Yeah, places I've worked that offered referral bonuses typically deferred the bonus for 3-6 months to make sure the referred employee passes "probation" period.
essentially giving an additional signing bonus if referred by an internal employee. Wonder if they would still offer that if you just reached out directly to the company.
referral bonuses are paid to employees. He is not an employee.
There is a big difference between "Referral bonuses are only due to employees" and "Referral bonuses are only paid to employees". At one point in time he was an employee and hence was due the bonus. The bonus was not paid to him at the time though.
1) Yes, a referral bonus is optional
2) It no longer becomes optional once you make the offer to your employees. At this point you have established intent; especially if it is provided in writing. You cannot take it back once the other party involved has upheld their end of the arrangement.
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