THE EFFECT OF SOCIAL MEDIA AND EMPLOYEE MOTIVATION ON EMPLOYEE REFERRAL PROGRAMS A thesis submitted to the faculty of San Francisco State University In partial fulfillment of The Requirements for PSYCH The Degree • Master of Science In Psychology: Industrial /Organizational Psychology by Yehudit Berman Harel San Francisco, California December 2015 CERTIFICATION OF APPROVAL I certify that I have read by The effect of 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 Yet............................................................................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 Made................................................................................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 1 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 2 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