THE EFFECT OF SOCIAL MEDIA AND EMPLOYEE MOTIVATION …

THE EFFECT OF SOCIAL MEDIA AND EMPLOYEE MOTIVATIONON EMPLOYEE REFERRAL PROGRAMS

A thesis submitted to the faculty of San Francisco State University

In partial fulfillment of The Requirements for

The Degree

Master of Science In

Psychology: Industrial /Organizational Psychology

by

Yehudit Berman Harel

San Francisco, California

December 2015

PSYCH•

CERTIFICATION OF APPROVAL

I certify that I have read by The effect o f social media and employee motivation on

employee referral programs by Yehudit Berman Harel, and that in my opinion this work

meets the criteria for approving a thesis submitted in partial fulfillment for the degree:

Master of Science in Industrial/Organizational Psychology at San Francisco State

University.

Chris Wright, Ph.D.

Associate Professor of Industrial/Organizational

Psychology

i

Kevin Eschleman, Ph.D.

Assistant Professor of Industrial/Organizational

Psychology

THE EFFECT OF SOCIAL MEDIA AND EMPLOYEE MOTIVATION

ON EMPLOYEE REFERRAL PROGRAMS

Yehudit Berman Harel San Francisco, California

2015

This paper explores the area of using social media profiles and a reward system to

develop the employee referral process. History of employee referral programs is

presented, including the relatively recent incorporation of Social Media’s effect on the

process. Motivation at work is also discussed, and the relationship between the three

variables is measured using data collected from an employee referral program start-up.

The results of this study indicate that employees were more likely to use social media as a

tool to refer their friends and acquaintances to work for their organization when a

donation incentive was offered.

I certify that the Abstract is a correct representation of the content of this thesis.

Chair, Thesis Committee Date

PREFACE AND ACKNOWLEDGEMENTS

This research program was designed and conducted by Yehudit Berman-Harel, using data

collected by RolePoint. Analysis was conducted by Yehudit Berman-Harel.

I would like to express my deepest appreciation to my loving and supporting husband,

Dror Berman, who believe in me and encouraged me to pursue this degree. And also, to

my dearest babies Liam and Zoe who reminded me what really is important in life. Thank

you for your patience and understanding. I love you!

TABLE OF CONTENTS

List of Tables........................................... vii

List of Appendices............................................................................................................... viii

Introduction................................................................................................................................ 1

Talent Issue...................................................................................................... 2

Cost of Turnover..............................................................................................3

Previous Literature................................................................................................................... 6

Employee Referral Programs.......................................................................... 6

Advantages of ERPs........................................................................................8

Disadvantages of ERPs..................................................................................10

The Role of Social Media in Recruiting.......................................................11

The Effect on Job Seekers..............................................................................13

What We Don’t Know Y et............................................................................15

Employee Motivation.....................................................................................15

Hypothesis.......................................................................................................19

Methodology.............. 20

Sample and Procedure................................................................................... 23

Measures.........................................................................................................24

Results...................................................................................................................................... 26

Analysis...........................................................................................................26

Discussion................................................................................................................................31

v

Summary.........................................................................................................31

Disadvantages................................................................................................ 33

Conclusion...............................................................................................................................34

Strengths ........................................................................................................35

Limitations.....................................................................................................35

Future Research............................................................................................. 36

References................................................................................................................................38

LIST OF TABLES

Table Page

1. Email Clicked Group Cross Tabulation................................................................ 27

2. Registered Account Group Cross Tabulation........................................................ 28

3. Connected to Facebook Group Cross Tabulation.................................................28

4. Connected to Linkedln Group Cross Tabulation...................................................29

5. Time Logged Into Account..................................................................................... 30

6. Number of Suggestions M ade................................................................................30

7. Game Completion.................................................................................................... 31

vii

LIST OF APPENDICES

Appendix Page

1. Instrumental Motivation Incentive ($15 Amazon Gift Card Was Offered).......... 42

2. Internalization Motivation Incentive ($15 Red-Cross Donation Was Offered).. .43

3. No Motivation Incentive Was Offered in the Email................................................ 44

4. RolePoint Game. Instrumental Motivation Reward ............................................... 45

5. RolePoint Game. Internalization Motivation Reward ...........................46

6. RolePoint Game. No Motivation Reward................................................................ 47

Introduction

Organizations have historically found hiring and retaining talent to be a challenge.

On one hand, most managers understand on some level that their people are the most

valuable and important resource to build a successful business. But on the other hand, the

actions that many business leaders take on a regular basis do not align with such a belief.

Hiring managers tend to underestimate the time and energy required to find and recruit

quality candidates for open positions. Business owners and CEOs frequently minimize

the importance of hiring. The task of recruiting often takes on a stressful tone and is

executed hurriedly in order to fill important positions. The first person who simply meets

the position requirements is often hired, rather than the organization taking the time and

resources to find the right person for the position, team and organization as a whole.

The task of searching for the right person to occupy a position involves

challenges, such as dealing with a small pool of candidates, lack of candidate’s job

experience and low fit between candidates and the job requirements. Despite these

challenges, employers need to understand that shortcuts such as hiring too quickly or

bringing the wrong person on board can be very costly to the organization in the long run.

Today HR managers should be open to using creative ways to (1) speed the recruiting

process, (2) enlarge the pool of qualified candidates and (3) hire the most suitable person

for the job (Breaugh, 2009).

No matter what condition the economy is in, whether it is in an economic boom or

has taken a downturn, the need to hire qualified employees is always in demand. In a

down economy, companies manage their recruiting budgets more carefully, while still

filling the recruiting needs. Hiring the wrong people (e.g., people who leave the

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organization too early or individuals who simply do not perform well enough) not only

costs time and money to the organization, but may also impact the companies’ reputation,

morale and productivity (Gusdorf, 2008). Finding the best match and the right person for

the job is not an easy task, however. Recruiters and human resources managers must try

to find the best hiring practices that will help them reduce incidents of wrong hiring and

increase their productivity.

Traditionally, recruitment is described as “the set of activities and processes used

to legally obtain a sufficient number of qualified people at the right place and time so that

the people and the organization can select each other in their own best short and long

term interests” (Richardson, 2014). As challenging as it is, searching for the right person

for a certain position is also crucial to saving a company’s resources. Specifically, there

are two ways that a thoughtful and pointed talent search can help a company reduce

turnover:

Talent issue

It is vital to an organization’s success to utilize the strengths of their employees.

An organization would not do well to make a big picture strategic thinker a technical data

analyst, asking them to spend all their time looking at minute details. At the same time,

someone who is most comfortable working with data spreadsheets shouldn’t be asked to

be in a role where they must travel, network and sell products. Although it is good to

develop and grow employees, the main bulk of their work should be within the realm of

their preferences and strengths. That is, where they will do their best work and add the

most value to their organization (Locke, 2009). Allowing employees to use their strengths

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in their day-to-day job tasks also increases engagement and retention (Latham & Leddy,

1987).

Putting employees in positions where they can use their strengths all starts with

the recruitment process. Having the appropriate knowledge and skills for a position

should not be enough for a hiring manager to bring someone new into a role. Their fit

within their potential team and the culture of the organization as a whole should be

considered. Some experts in the field of HR even maintain that a company should only

expand at the rate at which they are able to fill roles with the best-fit employee (Gieskes,

2010). If the growth of the company depends on their recruiting strategy, that recruiting

strategy should be a priority at the top of the list.

Cost of turnover

Poor recruiting decisions can have large and long-term negative effects on an

organizations’ success. When the wrong person has been hired into a position, they will

require additional training and development, which is a cost to the business (Boushey &

Glynn, 2012). Their poor performance costs the business in productivity, and when

people are unproductive and unhappy the turnover increases. High turnover often brings

morale down, which decreases productivity even further (Barbuto & Story, 2011). At

worst, poor hiring decisions can cause a business to lose their competitive edge and share

in the market (Richardson, 2014). The issue of recruitment is not just about taking a

company from good to excellent performance; it’s about staying afloat in a competitive

business world.

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It costs a business about one-fifth of an employee’s salary to replace them when

they leave the organization (Boushey & Glynn, 2012). Not only does the business pay the

cost of recruiting, hiring and training a new employee, but they must also factor in the lost

productivity while the role is empty and the slow productivity while a new employee is

learning the role. About one-fifth of U.S. employees leave their job every year

voluntarily, and an additional one-sixth are let go involuntarily (Breaugh & Starke,

2000). This makes the cost of turnover an important economic issue. Although businesses

do pay more to replace high-wage earners than low-wage earners, the cost is still

significant (Boushey & Glynn, 2012).

In order to address the issue of turnover, businesses must recruit people who can

fill a need and who will stay with the organization for as long as it is beneficial to both

parties. Businesses can engage in several types of recruitment activities to find these

people, but this is an expensive option. In the past it would not be uncommon for a

business to spend 20-33% of the new employee’s annual salary on recruitment agencies

(Cheddie, 2001). Agencies could charge such massive rates because of their ability to

create a large network that they could leverage to source high quality candidates that

were not available through other, less expensive means.

Today, the companies who do not have the funds to devote to a recruiting agency

may also utilize temp agencies, “Help Wanted” signs, online job postings, and even

newspaper ads (DeVaro, 2005). Each type of recruitment technique has pros and cons,

and one may work better for some kinds of positions than others. For instance, “Help

Wanted” signs work well for a business that doesn’t need a particular skillset, and doesn’t

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want to spend a large amount of money. For them, when someone walks in off the street

to drop off an application, all the business needs from that person is a willingness to learn

and a strong sense of integrity. This way a business can be reasonably assured that they

can teach their new employee what they need to know to do their job, and the employee

won’t steal from them.

When a business needs a highly specialized skill however, they need to put effort

into a very specific recruitment search. They may need to post their open position on a

specific online job board or attend a specialized conference to advertise their position.

Because the business will need more than a willingness to learn and a promise to not

steal, they will have to purposefully target their search.

In some cases, organizations will use only referrals from their current employees.

This tactic is called “network hiring,” and is generally only used by companies who are

small, less formal and often in the private sector (DeVaro, 2005). Organizations that

cannot rely on this technique completely use it as one of many ways to attract potential

candidates. To expand on this idea and make it scalable, organizations have developed

“Employee Referral Programs,” which reward employees for reaching into their

individual social network and recommending the people they already know for open

positions in their company. This recruitment method is cost-effective and bypasses many

of the hurdles the other methods contend with. The phenomena of public online social

networks such as Linkedln and Facebook has opened new doors for this recruitment

method, as well as added some additional complications to the traditional recruitment and

hiring process.

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The purpose of this research was to explore the possibilities and complications

created by public social networks. This paper seeks to explore the role that social

networks play in recruiting and screening potential candidates, as well as the type of

reward system that is most useful for the referral behaviors. Specifically, it seeks to

examine the potential that such sites have to simplify the referral process of candidates.

We explore the utilization of current employees who are interested in the reward for

using their social networks for a referral purpose.

Previous Literature

Employee referral programs

Employee Referral Programs (ERPs) are an internal recruitment method used by

organizations to search for potential candidates from their existing employees’ social

network (Hsieh & Chen, 2011). Companies encourage their existing employees to select

and refer suitable candidates from their networks, and as a reward the employee often

receives a referral bonus. Some companies incentivize the wanted behavior (i.e., the flow

of referrals), while others reward solely the desired outcome (i.e., successful hiring).

Though ERPs have been around for many years, only in the past decade have they gained

popularity and become a more prominent recruitment method in the business world.

For many years, companies did not necessarily have an official ERP, but

employees were informally asked to refer friends or acquaintances that may fit a position

in the organization. The first ERPs developed were generally very simple ones (i.e., pen

and pencil programs with no monitoring option and small or no incentives) (Cheddie,

2001). Since then, ERP’s have become more complex and targeted, and therefore more

effective.

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In more recent years, through the easy access to the Internet and the high usage of

social media systems such as Facebook and Linkedln, many employees develop a “small

world” of networks, which makes agencies’ contributions less unique. A conservative

estimation among social scientists is that most people have about 300 friends and

acquaintances in their network. Each of the 300 people knows another 300 people, which

leads to a total of 90,000 people who are friends of friends of a single employee

(Cheddie, 2001). Therefore, today more than ever, employees’ network can be harnessed

to recruiting purposes and may be equally or even more effective than recruitment

agencies.

With the upturn in business’ access to employees’ social networks, ERPs are

getting more and more creative and innovative. Companies are using technology and

social media to simplify this process and to increase employees’ participation (Budden &

Budden, 2009). Social Network Sites (SNSs) are used to define web-based services that

enable individual to (1) create a virtual public profile within a bounded system, (2) define

a list of other users with whom they share a connection, and (3) view their list of

connections and those made by others within the system (Boyd & Ellison, 2007).

The interactions among people within social media are translated to the exchange

of information or ideas in virtual communities and networks (Boyd & Ellison, 2007). The

rapid development of technology as well as a good understanding of the public needs

allow SNSs (e.g., Facebook, Linkedln, etc.) to become sharper and more sophisticated.

Millions of individuals use social media to express themselves, look for information or

participate in group discussions.

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The sophisticated and developing technology has played a strong role in the

development of successful ERPs. It allows automating the referral process within new

applicant tracking systems (ATS) and careers web pages (Arnold, 2006). For example, an

ATS can send an automated email to the employee who made the referral, and also to the

referred candidate, to let them know that the referral was accepted or rejected rather than

it disappearing into the unknown.

Advantages of ERPs

In recent years more and more organizations are acknowledging the benefits and

effectiveness of ERPs in speeding up the recruiting process and increasing the quality of

the hire (Sullivan & Burnett, 2006). One of the main advantages of ERPs is that they

tremendously enlarge the number of recruiters that a company has available. Instead of

only a few recruiters looking for quality candidates, referral programs practically make

every employee of the organization a talent scout (Sullivan & Burnett, 2006).

Employees are also more likely to know people with similar interests and

background and therefore to be able to reach potential candidates faster than any

recruiter. Moreover, referred candidates perceive employees as a more trusted channel of

information than recruiters (Bloemer, 2010). Since employees live and breathe the job

and the organization, they could provide a more genuine and realistic job preview than

recruiters, whom candidates may often believe would do whatever is needed to pull them

into the process.

Hsieh and Chen (2011) suggested that employees who are recruited via referral

sources are more likely to have accurate information about what a position entails.

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Possessing such information is thought to help an applicant make a more informed

decision about whether or not to pursue the job. It has been argued that employees

recruited by other sources may lack this realistic job information (Williams, Labig &

Stone, 1993). Without this information these individuals are thought to be less likely to

choose a job that fits their skills and interests. If hired, these less informed employees are

more likely to be unhappy with their decision to take the job and may be more likely to

resign.

The assumption is that employees prescreen the applicants before they refer them

to their company (Kiman, Farley & Geisinger, 1989). Current employees have the

advantage of knowing both the job and the individual; therefore they are able to refer

those applicants who they believe will best fit the job and the organization. Additionally,

current employees would desire to refer only qualified candidates in order to maintain

their good reputation (Kiman, Farley & Geisinger, 1989). Therefore, employees are more

likely to learn the job description and requirements in order to refer those with the

relevant education, skill set and job experience.

Sullivan and Burnett (2006) argue that ERPs have a very high return on

investment (ROI). In one example that they provided, a technology company initially

invested $300,000 in the development process of an employee referral program, which

resulted in a business impact of over $46 million. It was found that well designed

employee referral programs have the power to decrease turnover, increase offer

acceptance rates, shorten the time to productivity of new hires and increase the on-the-job

productivity.

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Research has found that referrals are considered to be a great hiring source, which

can increase the referred employee’s attitudes and relatedness to the organization

(Latham & Leddy, 1987). Individuals recruited through employee referrals reported

significantly higher levels of job involvement and organizational commitment than

employees recruited through newspaper or journal advertisement. Moreover, employees

recruited through referrals were found to have significantly higher levels of job

satisfaction than those recruited through newspaper, journal advertisement and walk-ins.

This research implies that employees hired through word of mouth held more

positive attitudes toward their organization and job. A realistic job preview is assumed to

provide accurate information about a particular organization and may explain why inside

sources, such as employee referrals, result in higher job survival rates than do outside

sources such as newspaper advertisements or employment agencies (Wanous, Poland,

Premack & Davis, 1992). In fact, Wanous et al. (1992) reviewed 12 studies of recruiting

source effectiveness and found that inside sources had job survival rates that were about

30% higher than the outside sources.

Disadvantages of ERPs

One of the main disadvantages of employee referrals is that referrals decrease the

diversity of the workforce in the organization. Some opponents claim that employees

often recommend and refer people who are similar to them in their interests, education

and character (Fernandez, Castilla, & Moore, 2000). The fear is not only that the

organization will be very homogeneous and therefore will adopt a certain culture, but also

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that it won’t be open enough to accept different people who are smart and talented but a

little different than the type cast of the organization.

A questionnaire written and disseminated by Williams et al. (1993) found that

employers believe that social recruitment makes discrimination a more probable issue in

the hiring process. To overcome this concern, companies can simply make it clear to their

employees that diversity is much appreciated and even can offer a higher incentive for a

successful hiring (Fernandez, Castilla, & Moore, 2000). By making diversity a

transparent priority within their culture, employers can encourage employees to be open

to referring people who are not exact copies of themselves.

Another concern that may arise is that such requirement of employees’ active

participation in the program may harm their main duties and responsibilities. Looking for

people to occupy a position takes time and energy. While such a behavior possibly

increases employee’s involvement and engagement in the company, it may also impact

employee’s time management and decrease his or her productivity (Fernandez, Castilla,

& Moore, 2000).

The role of social media in recruiting

Today social networking has blossomed into excessive amount of diverse

technology sites. This list includes business-oriented sites like Ecademy, Linkedln and

Spoke, and more social sites such as Friendster, MySpace, Twitter, Meetup, Tickle and

the most popular one, Facebook (Brown & Vaughn, 2011). Such SNSs gained their

popularity as a result of their users’ need to stay connected to friends and other

likeminded people, to be a part of a group or to get access to certain information. These

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sites have created a virtual community where users can express themselves, explore their

interests, share their ideas, participate in group discussions, reconnect with lost friends,

stay connected to current friends and create new friendships.

In the past few years, SNSs started to attract the interest of many business sectors.

Companies and businesses started to realize that Social Network Sites are a rich source of

data about users, and that such information can be tremendously valuable to certain

businesses. For example, Linkedln collects information about the user’s current job, level

of education and previous job experience.

This information is valuable to companies in search for new employees. This is

why these sites have begun to expand into a wider array of uses. SNSs provide

interactional gaming, advertisement and coupons, fan pages, instant messaging, customer

services pages for businesses and even background checks for recruitment and hiring. All

of these tools can increase the speed and accuracy of the recruitment process.

One of the main advantages of social media as a recruiting tool is that it has the

ability to reach a large mass of people. As opposed to recruiting agencies, SNSs have the

potential to use viral marketing in order to effectively harness employees’ networks

(Cheddie, 2001). As previously mentioned, social scientists do believe that the social

network for the average person can reach up to 90,000 people. This is a huge pool of

talent that can be tapped.

HR heads and head-hunters also feel that using social networking sites expands

the potential pool of recruits into a group that isn’t currently looking for a new position

but doesn’t mind talking. Recruiters find that direct interactions with top talent through

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networks and referrals are more effective than other conventional methods. Some

professional networking sites provide access to a rich pool of professional talent, are

fairly easy to use and provide access to people with specific skills and industry

experience (Bohnert & Ross 2010).

Moreover, SNSs are one of the most cost-effective ways to find suitable

candidates, with the extra outcome of increasing employee morale and retention as well

as decreasing the hiring time. Companies that used SNSs as a recruiting source to refer

reported that their time to fill in positions has dropped from 90 days to less than 30 days.

Additionally, employees who joined through referrals stayed longer and often performed

better than employees hired through other sources (Arnold, 2006).

The effect on job seekers

Although SNSs can be a cost-effective and advantageous method for business, the

flipside must be considered as well: the effect on individuals who are seeking jobs. These

individuals must be aware that potential employers have access to large amounts of their

personal data. Many recruiters and HR managers have taken to Facebook and other sites

to scan pictures, relationships, videos, experiences, accomplishments and more. Details

of a job applicant’s life are now open and public for anyone to view.

On the positive side, job seekers can passively share much more about their

experience and work ethic than a resume would ever be able to provide. One page of a

resume can be expanded into several pages of details about job skills, projects and

accomplishments. Work samples, recommendations from past managers and co-workers,

and even participation in professional networks can now be viewed by hiring mangers. In

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some cases, job seekers can even apply to jobs through sites such as Linkedln, bi-passing

the resume stage altogether.

The downside, however, is more closely related to personal sites. Hiring managers

can also find deeply personal and potentially incriminating information on social sites as

well (Brandenburg, 2008). Even if a professional site looks highly promising for a

position, if a personal site shows that a candidate’s lifestyle doesn’t match the culture of a

company the candidate could be excluded without ever getting a call.

Vazire and Gosling (2004) questioned whether or not reviewing an individual’s

online profile, specifically a personal website, could give the reviewer an accurate

impression of that individual. It was found that it did create an impression clearly in line

with what the individual intended to express. Personal websites in particular, but other

social profiles to an extent, consist of expressions of identity that give the viewer a clear

idea of who that person is.

The ethics of this type of research into a candidate’s life has been called into

question. Although some believe potential employers should never use a site such as

Facebook to investigate a potential candidate, many recruiters do not deny doing so.

Some feel that they want to get to know potential candidates in as many ways as possible,

and looking into SNSs is just another method to do so. Some believe that it is acceptable

to research via SNSs, but not to make hiring decisions (Epstein, 2006). According to

Valdes & McFarland (2012), several states including Arizona, Oregon, Michigan, and

Nebraska, have gone as far as to pass bills preventing bosses and potential employers

from requesting a worker or a job applicant’s social media password.

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In general, the consensus amongst researchers, employers and job candidates alike

is that SNSs should be used carefully. Job seekers should be intentional about what they

post online, specifically during a pointed job search. Recruiters and HR managers on the

other hand, should not jump to conclusions about a candidate based on one picture in

their Facebook feed.

What we don’t know yet

Although there are many business reasons for developing and utilizing ERPs,

there is one key factor that is still uncertain: employee motivation. Employees must be

motivated to refer individuals from their network; otherwise the entire system is negated.

Social scientists and psychologists have been studying human behavior for many years,

but there is still no conclusive theory about human motivation. Nor is there any concept

that brings all the hypothetical theories together (Ryan, 2010).

Many of the current theories focus on one or two aspects of the concept of

motivation, and leave the other aspects unexplained. Others require a very specific and

specialized set of circumstances in order to function. Experts and researchers are still

discussing what works and what is lacking for each of the motivation theories (Ryan,

2010).

Employee motivation

There are several definitions of motivation, but all of them can be distilled down

to influencing human behavior in three ways:

1) Energizing (i.e., supplying energy for desired behavior)

2) Channeling (i.e., focusing behavior in the desired direction)

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3) Sustaining (i.e., maintaining desired behavior at a consistent level)

Studies have tried to understand how each of these elements can be reliably

measured, and what additional environmental factors will have the desired effect or

outcome (Steers, Mowday & Shapiro, 2004). The earliest attempts to understand human

motivation stemmed from the Greeks’ interest in their observation that individuals sought

pleasure and avoided pain. This principle is called hedonism, and over time was refined

and focused, but scientists were never able to study it empirically.

Researchers of human behavior such as Freud, Thorndike and Skinner all took the

original concept of motivation and added to it or studied a particular element of it to

create their own theories. For their individual studies they added basics of human

behavior such as instinct, making decisions based on the past, and reinforcement of

consequences. When Mayo and Maslow took an interest in motivation, they brought it

into the work arena. Starting with the industrial revolution, people were put to work in

ways that were machine-like, and productivity suffered. Social scientists argued that a

lack of treating people like human beings resulted in low morale, low productivity and

overall confusion (Steers, Mowday & Shapiro, 2004).

Many motivation research projects have focused on the specific field of employee

motivation to better understand the different types of motivations and the linkage

between employee motivation and job performance. One of the most popular theories

was developed by Herzberg, Mausnek, and Snyderman (1959) and is known as the

Motivation-Hygiene Theory or the Two-Factor theory. Herzberg found that certain

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factors in the workplace are related to job satisfaction (motivation factors), while a

separate set of factors are linked to job dissatisfaction (hygiene factors).

Absence of the hygiene factors, which include elements like salary, job security

and work conditions would cause job dissatisfaction and consequently lead to lower

levels of motivation to perform the job. Once the hygiene factors exist, it is possible to

increase employees’ motivation by providing motivation factors, such as challenging

work, recognition and responsibility. Motivation factors are not only related to job

satisfaction but they also directly linked to employees’ motivation to perform their job.

Another distinction relevant to this particular study is between extrinsic and

intrinsic motivation (Notz, 1975). Extrinsic motivation refers to the performance of an

activity in order to attain an outcome. Rewards such as money, fringe benefits and

promotions are extrinsic because they create satisfaction that is independent of the actual

work. In addition, someone external to the employee controls them. Intrinsic motivation,

on the other hand, exists within the employee rather than relying on external sources. It

refers to motivation that is driven by an interest or enjoyment to perform a job.

Gomez-Minambres (2012) discusses the influence that goals have on motivation.

The idea that having a goal in mind will increase an individual’s desire to complete a

task, therefore energizing them, channeling their behavior and serving as a sustaining

factor until the goal is complete. Leonard (1999) explores the incorporation of self-

concept-based processes into the work motivation field. Self-based theories are based on

the assumption that human beings have a fundamental need to maintain or enhance

themselves.

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Clearly there are many models and theories of motivation to choose from. None

of the models or theories are all encompassing, and the field is still a rich source of

opportunity for study. The theory the researcher chose to focus on for this particular

study is related to organizational citizenship behavior (OCB). Many studies related to

employee motivation have focused on supervisory behaviors, whereas OCB is more

focused on individual discretionary behaviors that are not recognized in a formal review

system (Barbuto & Story, 2011).

Studies concentrated on organizational citizenship behaviors have attempted to

identify predictors of OCB. Job satisfaction, personality, employee role perception and

employee attitudes have all been studied and play a role (Barbuto & Story, 2011). Other

concepts such as organizational concern, prosocial values and impression management

have also been examined.

For the purpose of this particular study the researcher chose to use the following

five sources of motivation proposed by Barbuto & Story (2011), which are specifically

related to organizational citizenship behavior. The researcher felt that a motivation model

related to organizational citizenship would be ideal for this study because employee

referral programs are not related to employee performance or supervisor approval ratings.

The sources of motivation by Barbuto & Story (2011) are below:

• Intrinsic Process Motivation - This refers to the sheer enjoyment of the work an

employee is doing. It is different from the traditional definition of intrinsic

motivation because it does not involve overcoming a challenge. Instead it is

simply deriving pleasure in completing the task.

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• Instrumental Motivation - This refers to being motivated by a tangible reward,

such as money or a trophy. It is different from the traditional definition of

extrinsic motivation because it requires a tangible object, as opposed to praise and

recognition.

• Self-Concept External Motivation- This is more closely linked with social

rewards and standing within a group. Not necessarily recognition from superiors,

but actual respect and positive perception from a group.

• Self-Concept Internal Motivation - This source of motivation is about

perception of oneself. It’s about feeling satisfied with personal accomplishment,

regardless of external factors.

• Goal Internalization Motivation - This motivation source is completely absent

of self-interest. It is entirely focused on the cause or mission.

Hypothesis

The role of social media in today’s society is an area that can be tapped further for

employee referral programs. By making ERPs as simple as possible, organizations can

create a cost effective, successful recruiting method to bring in the best talent possible.

But in order for any of that to work together, employees must be motivated to participate.

This study will shed light on what employees want as an incentive to participate in their

company’s ERPs by using their social network as a referral tool.

For the purposes of this study, the researcher chose to focus on the difference

between two types of motivation: Instrumental Motivation and Goal Internalization

19

Motivation. The researcher felt that these two would yield the most results for this

particular study. She chose to save the later three for additional research.

Individuals who are highly motivated by external rewards such as bonuses,

promotions and other tangible benefits are less likely to engage in organizational

citizenship behaviors. OCB are not formally recognized or rewarded, so they hold little

value to those who are more interested in a tangible, positive consequence for their

behavior and time. The researcher’s belief is that they will also see very little value in

participating in an employee referral game as well.

In contrast, individuals who emphasize principles and values are more likely to

seek out opportunities for organizational citizenship behaviors and place value on those

behaviors. Participating in organizational citizenship behaviors give these individuals a

feeling of intrinsic satisfaction, meaning that their values are met by the behaviors.

Individuals who are motivated by goal internalization and also have pride in their

organization are positively related to organizational citizenship behaviors, and the

researcher’s belief is that they will also find value in participating in the employee

referral game.

Hypothesis: Compared to those in instrumental motivation and control

conditions, employees in a goal-internalized motivation condition will be

significantly more likely to participate in an interactive employee referral game.

Methodology

Very little research has been done regarding how organizational citizenship

behavior motivations are related to employee referral programs. This research will

20

explore this area by using research gathered on an interactive employee referral game

connected to employee’s social media profiles. RolePoint, a social referral online

platform that allows companies to simplify the referral process, conducted the game and

collected the data used in this study. This method did not affect the participants in any

way; the data were already being collected by RolePoint, and the researcher was not

given any personal information about the participants.

Participants for the study were drawn from the archival client database from

RolePoint. This research was done in conjunction with prior initiatives that RolePoint had

conducted and was a part of the researcher’s internship project. To help develop their

product, RolePoint collected data from participants who used their platform to understand

employee’s motivation to participate in employee referral programs.

For this research a posttest, independent groups design was chosen as opposed to

a repeated measures design in order to increase participation. The game did take a few

seconds to play, and trying to play it more than once would have had a diminishing

return. This was also chosen over a survey in order to observe real behavior in a real

environment. This mitigated factors such as bias, cheating or a lack of thoughtful

consideration simply to receive the reward. This method was also randomized, to further

mitigate bias.

RolePoint is a startup in the San Francisco Bay Area that has developed a

platform that allows employees within a company to refer external friends and

acquaintances to open positions in their company. In the platform, the participant plays a

referral game where they are asked to look at a contact in their network and decide

21

whether or not he or she would be a good fit for a certain role. Participants were shown

the contact photo, name, current position, and a hypothetical similar role that was created

by RolePoint’s algorithm that would serve as a position to be referred to. In an effort to

collect data, RolePoint gives some participants monetary rewards, and offers other

participants the option to make a charitable donation for completing the game.

Participants were given different incentives for completing 25 matches in the

game. They were randomly assigned to one of three experimental conditions:

• Instrumental Motivation Group: This group relates to our research on monetary

incentives. This group was incentivized by a monetary reward and was offered a

$15 Amazon gift (See Appendix 1 and 4).

• Goal Internalization Motivation Group: This group relates to our research on

altruistic motivation. The group was incentivized by a Red Cross charity

donation, and was offered a $15 cash donation (See Appendix 2 and 5).

• Control Group: This group, which served as the control group, was simply sent

the invitation email with no incentive (See Appendix 3 and 6).

First, employees received an email from their human resource manager at their

company with an introduction to the RolePoint social referral platform. The email

discussed the benefits of the tool, such as its ability to speed up and simplify the referral

process. It further stated that no one will have access to the participant’s contacts and that

logging in to the social network would remain strictly confidential.

RolePoint then sent a separate invitation email, which included a description of the

different incentive conditions for participating and completing the game. These

22

incentives were offered to motivate employees to participate in RolePoint’s simulation

and not for an actual referral. The RolePoint email also included a link that the participant

could use to log into the platform (See Appendices 1,2 and 3).

The link in the e-mails stated “See how easy it is, start referring now,” to help

entice participants to get involved. First, the participant entered the RolePoint platform

where they would create their own account that was linked to the company’s database of

open positions. The participant then logged into one of two social network sites

(Facebook or Linkedln) within the RolePoint platform.

The platform scanned the referrer’s social network and also the job description of

the open positions in the company. It then provided recommendations of people to refer,

also known as referral candidates, who may be a good fit for the position based on their

past experience, current job, and education. Once logged into the RolePoint platform,

participants were asked to play a game, making matches between their social network and

the open positions at their company.

Sample and Procedure

RolePoint searched for medium-sized technology companies that were interested

in using their employee referral platform. Out of all companies that showed an interest,

RolePoint chose three small to mid-size technology companies in the San Francisco Bay

Area. These companies had 200 to 500 employees each. Among employees who had at

least opened the invitation email from RolePoint, 51 were randomly selected from each

organization (153 participants were selected in total).

23

For purposes of confidentiality, no unique identifiers were collected from

participants. Participants were required to be at least 18 years or older. Other types of

demographic data were not collected as part of this study. Data on the number of

Facebook friends and Linkedln connections were collected for participants who

registered their account and linked it to Facebook or Linkedln, respectively. To register

their account, participants only needed to supply their e-mail address.

Participants were asked if a certain person from their network, also known as

referral candidates, would be a good match to a specific job title (See Appendices 4, 5

and 6). Participants did not have access to the full job description of the position. In only

a few clicks, referrers can either take the platform’s suggestions or reject it, which is

known in this study as a “completed suggestion.”

The platform includes a countdown of 25 required completed suggestions in order

to win the offered incentive for participants in the Goal Internalization Motivation or the

Instrumental Motivation groups. The control group also saw the countdown but no

incentive was linked to the number of completed suggestions. Although 25 completed

suggestions were necessary to receive the incentive, participants could continue going

through suggestions until they reach 50 completed suggestions. At this point, they were

transferred to the actual referral web page in which they could start making actual

referrals.

Measures

During the study, data were collected on numerous outcome variables in order to get a

well-rounded understanding of the data. Including:

24

• Email Click: This is a measure of whether the participants clicked on the email

link when shown their potential incentive. This variable was measured as Yes =

they clicked on the link, or No = they did not click on the link.

• Registered Account: This is a measure of whether participants registered to the

RolePoint platform with their company e-mail address. Participants who did not

click into their email were not included in this group as they did not have the

option to register their account. This variable was measured as Yes = they did

register, or No = they did not register.

• Facebook Link: This is a measure of whether participants logged into their

Facebook account, at which the RolePoint platform automatically linked to their

Facebook friends. Participants who did not click into their email or did not

register their account were not included in this group as they did not have the

option to log into their Facebook account.

• Facebook: This variable was measured as Yes = they did connect to Facebook, or

No = they did not connect.

• Linkedln Link: This is a measure of whether participants logged into their

Linkedln account, at which the RolePoint platform automatically linked to their

Linkedln connections. Participants who did not click into their email or did not

register their account, were not included in this group as they did not have the

option to log into their Linkedln account.

• Linkedln: This variable was measured as Yes = they did connect to Linkedln, or

No = they did not connect.

25

• Number of Suggestions Made: This is a measure of the number of suggestions

shown to a participant, to which they successfully answered “yes” or “no” as

being a good match. This was considered an important measure of level of

participation.

• Total Time Logged In: This is a measure of the number of seconds that a

participant stayed logged in to the platform. This was measured from when they

successfully logged in to the platform until they closed their browser or went to a

different site.

Results

RolePoint collected data from December of 2012 to January of 2013 from three

tech companies of similar size located in the San Francisco Bay Area. 51 participants

were randomly selected from each of the 3 companies, totaling 153 full time employees.

This sample was taken from individuals who had at least opened one of the emails sent to

them. In addition, we ensured that demographics such as age, department and aggregate

number of social connections were balanced in each set of 51 participants. Finally, equal

numbers were selected at each organization for each of the three reward groups (Control,

Instrumental, Goal Internalization).

Analysis

SPSS vl7.0 was used to complete all analyses. All data is based only on the

population that clicked on the e-mails, shown in Figure 1. There was no significant

difference between the groups in this regard, nor was there a significant relationship

26

between the group placement and the likelihood that they would click on the e-mail, x2 =

4.910, p = . 921.

27

Table 1

Email clicked group cross tabulationE-mail Clicked Group

Control GI (Donation) I (Monetary)

No 21 (42%) 8 (15%) 11 (21.6%)

Yes 30 (58.8%) 43 (84.3%) 40 (78.4%)

Note, x - 4.910, df = 2. Numbers in parentheses indicate column percentages.

Data were analyzed with Chi Square analysis to find whether a significant

difference exists among the proportion in the number of participants who registered their

account (Registered Account), logged in to their Facebook account (Facebook Link), and

logged in to their Linkedln account (Linkedln Link). Of the 113 (73.9% of the 153 who

were invited to participate) individuals who clicked on the e-mail, 107 (94.7%) registered

an account. The group most likely to register their account was the Goal Internalization

(GI) group, followed closely by the Instrumental (I) group and then the Control group,

although this relationship is not statistically significant, x = 1.978,/? = .372.

Table 2

Registered account group cross tabulation_________________Registered Account______________ Group_________________


No 3(10%) 2(4.7%) 1(2.5%)

Yes 27(90%) 41(95.3%) 39(97.5%)

Note, x = 1.978, df = 2. Numbers in parentheses indicate column percentages.

All three groups were given the opportunity to connect to both their Facebook

account and their Linkedln account. Of the 107 individuals who registered an account

with RolePoint, 64 (59.8%) of them logged in to their Facebook account. The association

between these two variables approached significance, x =5.172 , p — .075. This tells us

that if an individual registered their account, it was somewhat likely, although not

significantly likely, that they would continue on to log into their Facebook accounts

through RolePoint.

Table 3

Connected to facebook group cross tabulationConnected Facebook______________ Group_________________


No 10(37%) 12(29.3%) 21(53.8%)

Yes 27(63%) 41(70.7%) 39(46.2%)

28

Note, x2 = 5.172, df = 2. Numbers in parentheses indicate column percentages.

In contrast, of the 107 individuals who registered an account with RolePoint, 88

(82.2%) of them logged in to their Linkedln account. Interestingly, this relationship was

not significant, x2 = 1.155,/? = .561. This tells us that although more individuals logged in

to their Linkedln account, it wasn’t statistically likely that they would do so.

Table 4

29

Connected to linkedln group cross tabulationConnected Linkedln Group


No 5(18.5%) 9 (22%) 5 (12.8%)

Yes 22 (81.5%) 32 (78%) 34 (87.2%)

Note, x = 1.155, df = 2. Numbers in parentheses indicate column percentages.

Data were analyzed with one-way analysis of variance (ANOVA) to find whether

a significant difference existed among the three groups in terms of how long on average

participant remained logged in to the platform. Overall, the GI (Donation) group spent

the most time logged into their RolePoint account, and there was a statistically significant

difference between the GI group and the other groups (F(2,104) = 10.361,/? = .000).

30

Table 5

Time logged into accountGroup_________Average Time Logged (sec) F (Between Groups)Control n 7 8 1

(94.431)

GI (Donation) 269.37 10.361 ***(143.164)

I (Monetary) 212.95______________(147.494)___________________________________Note. *** = p < .001. Standard deviations appear in parentheses bellow means.

A one-way ANOVA analysis was also used to determine whether a significant

difference exists among the three groups in terms of the average number of ‘suggestions’

that were made by each group. Although the GI group spent the most time in the

RolePoint account and also made the highest number of suggestions, there was not a

statistically significant difference between the groups in this regard (F(2,104) =

1.106, p = .335).

Table 6

Number o f suggestions made_________________________________Group_____ Number of suggestions made F (Between Groups)

Control 13.67

(10.539)

GI (Donation) 18.34 1.106

(14.156)

I (Monetary) 17.33

(13.237)

Note. *p < .05 Standard deviations appear in parentheses bellow means.

With regard to completion of RolePoints game, the Goal Internalization group

was much more likely to complete the game than the other groups. This shows that not

only did the goal-internalized group complete the most games (47%), but the

instrumental motivation of a $15 Amazon gift card (10%) had such an negative impact

that the group completed even fewer than the control group who had no incentive (18%).

Table 7

31

Game completionGroup Percentage of Completion

Control 9 of 51 completed the game, (18%)

GI (Donation) 24 of 51 completed the game, (47%)

I (Monetary) 5 of 51 completed the game, (10%)

Discussion

Summary

Employee Referral programs are considered a valuable hiring source not only for

an organization but also for the referred candidate and the employee who makes the

referral. From the organization’s point of view, it is not only cheaper to use the

company’s workforce to find new talent, but it has also been proven to be more effective.

In an employee referral program survey that included 586 HR professionals, almost 70%

said that the programs are more cost-effective than other recruiting practices (Brotherton,

2012).

Moreover, the studies have indicated that employee referral programs increase the

number of interested candidates for each position. By tapping employee’s networks

through their social networks, organizations can reach a large pool of qualified candidates

for talent acquisition. The main argument for these positive aspects of employee referrals

is that individuals referred for positions have a relatively high knowledge of the role for

which they are applying, thanks to their relationship to the referrer. As such, they have

more realistic expectations about the position, resulting in increased job satisfaction and

retention.

From the employee perspective, referring a candidate is similar to recommending

a good restaurant or a new product. Employees are more likely to refer others when they

enjoy their job, colleagues and organizational culture (Latham & Leddy, 1987).

Participating in ERPs increases employees’ job satisfaction, as they feel more involved

and committed to the organization.

Satisfied employees may be intrinsically motivated to make referrals for many

reasons, one of which is self-involvement. This occurs when an employee refers

someone, as they want to relive the delight of joining the organization or to publicly

declare how satisfied they are to work for the company. Self-confirmation is a second

reason in which referring reinforces an employee’s persuasion that they made the right

decision choosing to work for that company (Latham & Leddy, 1987). By reaffirming

their decision, employees are less likely to consider leaving the company, which

contributes to the retention rates.

32

Similar to organizational citizenship behaviors, employee referral programs work

best with employees who are satisfied and engaged in the success of their company. They

place value in helping their network find good jobs and in helping their organization find

good talent, regardless of any reward for themselves. These types of individuals are the

best source of employee referrals, and using a motivation incentive that will appeal to

their values will elicit the best response.

Disadvantages

Despite all the advantages of using employees’ networks for recruiting, there are

still some obstacles to this method. First, an employee’s social network is limited in that

only a small proportion of the network may be suitable for referral. Social networks in

particular may have a wide array of personalities, skills, knowledge and talent unless that

individual only associates with other people from their professional field. Given the

global access people have as well, they may know a perfect candidate for a job who

doesn’t like in the same city, or even country. Adding the complexity of moving

candidates from other places lowers the likelihood of good fit and increases costs to the

organization.

Secondly, recruiting from an employee’s limited social network may compromise

the diversity of the workforce. Especially in a professional environment, individuals tend

to enjoy working with others with a similar work style and knowledge set. Diversity of

thought and style may be lost if ERPs are relied on as a sole method for talent acquisition.

In line with this, is that the best and most relevant candidates may not be acquainted with

current employees. Although organizations reach a large population with this method,

33

they do still miss another large population. An employee referral scheme is only as good

as the volume and quality of candidates applying through the channel.

Finally, ERPs do need to be incentivized, because employees won’t do it on their

own. Only 18% of the individuals in the control group for this study completed the game,

while 47% completed the game when they were incentivized with a Red Cross donation.

Although it may be something that employees should be doing naturally, rarely do they

do it without a little push. The important thing is to choose the correct incentive.

Conclusion

This study adds to the research on employee motivation and employee referral

programs. It confirms the hypothesis that a monetary incentive is not a successful

incentive for behaviors in the workplace that are not associated with formal recognition

or tangible rewards. The results show that fewer people participated when the incentive

was monetary, compared to when the incentive was a donation. This suggests that the

donation incentive was a better motivator of behavior than the monetary. This study also

confirms the hypothesis that an altruistic reward is a successful motivator for behaviors

such as employee referrals, more than doubling what individuals would do without an

incentive.

In addition, this study found that those individuals who were offered an altruistic

reward spent a significantly longer time in the RolePoint referral system, but did not

make a significantly higher number of referral suggestions. Although this finding could

benefit from further study, it could mean that those who were completing the game in

order to give a charitable donation took the exercise more seriously and spent more time

considering the actual fit of the individuals they were recommending. The control and

34

monetary group members who completed the game took significantly less time to do it,

inferring that they were not considering the match as closely.

82.2% of the participants who registered for a RolePoint account signed into their

Linkedln account, as opposed to the 59.8% who signed in to their Facebook account,

suggesting that they were more likely to turn to their professional networks in order to

refer individuals for a professional position. In contrast, the data showed that it was

significantly likely for participants to sign in to their Facebook account. More exploration

into the data is required in order to understand this fully.

Strengths

By using data that was already being collected by RolePoint, the study’s non-

experimental setting is a real life example. This makes it generalizable for other areas and

studies. The data collection also did no harm to the participants and required no ethics

committee review, so it could be easily repeated.

Limitations

The tool used for this study is only a game, and therefore may not necessarily

reflect the actual referral behavior. In addition, participants didn’t have access to the full

job descriptions for the jobs they were referring their contacts to, which may have limited

their ability to make a fully informed decision. This may impact their motivation to

participate in the platform in way that is not clear. Finally, the data used in this study

were collected for a different purpose. It was originally meant as a metric for RolePoint,

35

not specifically for this study. Therefore, the study was limited by the data and analyses

that were available.

Future Research

There are some areas that were not explicitly covered in this study. For instance,

the methods for employee appreciation vary and change over time. In the past, bonuses

were merely money (and often a relatively small amount). Today businesses are getting

more creative with their bonus structure. They are offering more money, exotic

vacations, group lunches, electronic items, dinner with the CEO and more. Perhaps a

large enough tangible reward would entice those with instrumental motivation.

There are forms of incentives that were not covered in this study and could be

addressed more fully in future research. Perhaps a competitive element could be added,

or adding employee referrals as a transparent company value for those who have self-

concept motivations, either internal or external. There are many opportunities to delve

into these areas.

There is also the question of whether the candidate knowing the incentive to make

the referral may have an impact on their satisfaction. Is there a difference between feeling

like a friend referred you to a position because they really think you are a good fit, or

because they wanted a reward? This should be explored.

In line with the reward, it has been common to withhold referral bonuses for a

probationary period while the new employee gets settled in. Does that make a difference

in satisfaction as well? It sends the message that HR doesn’t trust the referring employee,

so does it impact either the referred employee or the referrer?

36

In conclusion, these research issues will help to expand our understanding of the

recruitment process and help in providing a fuller description of the recruitment process.

It will also help to fill out the inconclusive research regarding employee motivation. This

research note suggests that future empirical studies are warranted.

37

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42

Appendix 1: Instrumental Motivation Incentive ($15 Amazon Gift Card Was offered inthe Email)

Hey Kes, welcome to RolePoint

RolePoint makes it simple to refer friends and discover your most talented contacts

Peter Moor, Director of Talent

See how easy it is. start referring now

~ Right now there’s a $15 Amazing Gift Card for new users -

Help friends

Q Uncover talent in fun referral activities and be rewarded

Already using RolePoint

HEdEER.eii . A E f i i S C A

43

Appendix 2: Internalization Motivation Incentive ($15 Red-Cross Donation Wasoffered in the Email)


RolePoint makes it simple to refer friends and discover your most talented contactsPeter Moor, Director ot Talent

Se&hflWfii Syit igtstartreferring now

- Right now there’s a S15 Red-Cross Donation for new users ~

Help friends



G H E l& a i

44

Appendix 3: No Motivation Incentive Was offered in the Email


RolePoint makes it simple to refer friends and discover your most talented contacts

Peter Moor, Director of Talent

See how easy it is. start referring now

Help friends



45

Appendix 4: RolePoint Game. Instrumental Motivation Reward ($15 Amazon Gift Card Was offered for Competing the Game)

Step 1 Connect .

To get you started,

play this matching activity

and earn your $ 15 A m a zo n

Gift Card!

*0ont worry, your friers* wiH never be messaged

Step 1 Match■\

Step 3: Refer

Would Kes ThygesenHead of Product at RolePoini

make a good

Product Manager?

Not right now Yes

(left arrow) (right arrow}

*W#!i never contact your friends wAhout your permission

46

Appendix 5: RolePoint Game. Internalization Motivation Reward ($15 Red-Cross Donation Was Offered for Competing the Game)

Step 1 Connect >

To get you started,

play this matching activity

and earn your

$15 Red Cross Donation

*0onT worry, your friends wit never be messaged

S te p 2: Hatch

m i

0/25matches made 13

Reach 25 to earn a $15 Red Cross Donation

Step 3; Refer

Would Kes ThygesenHead of Product at RolePoint

make a good

Product Manager?

<Not right now Yes

8eft arrow) (right arrow)

‘We'H A«er cantxt your fcf»ftd& without your permission

47

Appendix 6: RolePoint Game. No Motivation Reward

o*>% ^ „ ....................................Mcp i! tonnea jttp MttCf! / Step 3: Refer

0/25matches made

Reach 25

Would Kes ThygesenHead of Product at RolePoint

make a good

Product Manager?

N o t r i g h t n o w Yes(left arrow) (right arrow)

•We'll newer contact your friends without your permission

THE EFFECT OF SOCIAL MEDIA AND EMPLOYEE MOTIVATION …

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