The Influence of Employee Referrals on P-O Fit

Article excerpt

The better the degree of fit between the individual and the organization, the better the job attitude an employee manifests, (1) and the higher the organizational recommitment, (2) the greater the job satisfaction, (3) and the lower the turnover intention. (4) In addition, fit directly affects promotion, salary, and tenure. (5) Therefore, starting from the recruitment phase, an organization should cautiously select employees that possess a good fit with the organization. (6) Therefore, although traditional recruitment concepts attach an importance to knowledge, ability, and skills (person-job fit), the values, beliefs, and personality attributes of a job seeker as well as the importance of values, beliefs, and norms of an organization are gradually becoming the focal points of person-organization fit (P-O fit) in recruiting employees. (7) This is to say that an increasing number of organizations are beginning to attach more importance to the level of consistency between organizational norms, values and individual's values. (8)

Employee referral (ER) denotes a situation in which the employees' source of work-related information is provided by an existing employee of the organization prior to the applicant's joining of the company. Applicants referred by a company's existing employee is a very effective recruitment channel because it is more likely for employees with special skills to be acquainted with talents sharing similar skills or know-how to find such talents. Also, applicants can also understand more about the company through additional information provided by the existing employee.

Studies showed that the similarity of value is an important component of P-O fit. (9) The recruiter often takes his or her personal value as a standard to evaluate P-O fit; (10) namely, when the candidate and the recruiter share similar values, the latter is able to judge whether or not the former can form a good fit with the organization. (11) According to the studies of Ullman (12) and Rees, (13) existing employees tend to refer job applicants who are similar to themselves; as a result, ER makes it easier to identify individuals that are compatible with the value system and therefore reinforces P-O fit. However, Ullman (14) and Rees (15) also noted that some managers are reluctant to adopt ER, fearing the outbreaks of factionalism in the company. Although ER may work to enhance the emotion of employees within small groups, it will ultimately lead to a drop in the P-O fit between employees and the organization.

In addition, Rees and Shultz, (16) Granwetter, (17) and Wanous (18) discovered that the recruiter would inform the candidate about the details of the job during the ER process. Therefore, applicants' joining an organization through ER can more easily decide whether a job is suitable than compared to regular applicants. This would also be beneficial to enhancing the candidates' P-O fit after joining the organization. However, Bargerstock and Engle opined that one of the weaknesses of implementing an ER program lies in job requirement and employee skills, especially the uneven match between the two. (19) Therefore, whether the information provided by the existing employee can truly help the candidate judge his or her P-O fit remains unclear. Also, since ER is a case of both special and informal recruitment, what is the level of P-O fit for employees joining an organization through ER?

As there are no answers available from the existing literature for the questions listed above, this study intends to clarify the relationship between ER and P-O fit, in addition to further investigating how ER affects the P-O fit of employees after they join the company.

Theory and Hypotheses Development

Employee Referral denotes a recruitment method utilizing employees' interpersonal relationship to seek new employees. (20) Also, according to relationship-orientation theory, there are three critical factors in interpersonal relationships: trust, promise and communication. …