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Performance Management Performance Management Cycle

Criteria for Referral Bonuses

Not all agencies will decide referral bonuses are right for them.  However, when an agency decides it wants to take advantage of this additional tool to help find candidates for hard-to-fill positions, an agency will need to establish the policies under which it will grant such awards.  Whether the agency creates a formal award specifically designed and named for this purpose or simply establishes the practice within its regular awards program, any agency making such awards should have in place specific criteria that guide its use of referral bonuses.  In establishing and operating its referral bonus program, an agency must assure the program does not conflict with or violate any law or Governmentwide regulation (5 CFR 451.106).  Specifically, the agency is accountable for ensuring the referral bonus program does not violate the legal requirements for broad public awareness of job openings; recruitment from appropriate sources to seek a workforce drawn from all segments of society; and hiring selections based solely on relative ability, knowledge, and skills after a fair and open competition that assures equal opportunity to all candidates (5 U.S.C. 2301(b)(1), 2301(b)(2), 5 CFR 2.1(a), 4.2; EEOC Compliance Manual, section 15).

In developing their criteria, agencies should address the following issues:

  • WHO:  Which employees may or may not receive a referral bonus
  • WHAT:  What form should the award take, and what size should it be
  • HOW:  When does the employee get the award? Should it be given all at once or in installments
  • WHEN:  What has to happen before an employee gets an award? What specific requirements, if any, must the new appointee meet
  • WHERE:  Where do you track who made the referral and whether all the criteria are met

The following table provides examples of referral bonus practices.  These examples come from research into actual award practices in both the private and public sectors.  They are provided to give agencies an idea of what is being done in this area and what such programs could look like.  Agencies are free to adopt one of these approaches, use different combinations of the various practices listed, or design a new approach, as long as they stay within the flexibilities allowed by the awards statute and comply with all other applicable laws and regulations.

WhoWhatHowWhenWhere
All employees EXCEPT:
  • HR staff
  • Hiring supervisors
  • Appointing authorities of positions being filled
Cash; up to $500
For unique, specialized shortage skills
Two payments:  half when hired & half at end of a specified time period. First payment made when new employee reports to work.  Balance after employee successfully completes specified time period. Employee completes appropriate HR form.  When candidate is hired and reports to work, HR provides the appointing authority a Referral Bonus form to complete and forward to HR and payroll for processing.  When the new employee completes the specified time period, HR notifies the referring employee and his/her supervisor, and processes the second payment.
All employees EXCEPT:
  • Recruiters and HR staff
  • Supervisors and managers within their Divisions
Paid time off granted in three stages:   1. Half day for submitting referral
2. 1 day if candidate hired
3. 2 days after new employee works for 6 months
Award may be redeemed only after new employee reports to work. Employee may take up to 1½ days (stages 1 and 2) after candidate is hired.  Employee gets the other 2 days (stage 3) after 6-month anniversary. Employee submits referral card or email to HR.  HR checks to see if candidate has applied for the job and approves part A of the referral time-off award.  HR notifies employee if the candidate is selected and advises employee's supervisor and payroll about the 1½ days referral time-off award.  HR notifies employee, supervisor, and payroll of the additional 2-day award if the new employee successfully completes 6 months.
All employees EXCEPT:
  • Members of HR staff and the Recruiting Division
  • Team Leaders for their own team
  • Management staff within their own department
Cash; $1000 (based on one half documented average cost to recruit a successful hire) No sooner than 6 months after referred person is hired. Candidate must be hired and perform successfully for 6 months. Referrals are tracked in HR using spreadsheets.  The employee sends referral information to HR.  Employee gets a thank you card for the referral.  HR keeps the referral, tracks the applicant, and processes the bonus after 6 months successful performance, notifying payroll to make the payment.
All employees EXCEPT:
  • Recruitment Staff
  • HR Staff
  • Managers and executives
Cash; $1500 Only listed positions during stated time-frame (one half cost based on documented historical data) No sooner than 90 days after hiring referred person. Candidate must be hired into a full-time regular position and complete a 90-day introductory period successfully. Employee submits referral to HR by completing an Employee Referral Form taken from the intranet.  Employee receives a thank you.  If individual referred applies for the job and is hired, HR notifies employee that referred individual has been hired.  HR tracks the new hire and processes the bonus after the 90-day period is completed successfully.
All employees EXCEPT:
  • Employees involved in the recruitment process
  • Employees outside the local area office
Cash.
  • $50 for 1st referral
  • $100 for 2nd
  • $150 for 3rd
  • $200 for 4th and any additional referrals
Used only with certain seasonal positions.
Paid at the end of the fiscal year. New employee must work successfully for a minimum of 4 months or until placed in non-work status. Appointees complete a referral card, which is kept on file in HR.  At the end of the fiscal year, HR checks these files against the rolls to see which appointees met the time requirements and processes a single, cumulative Referral Bonus payment for the referring employee.

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