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Summary: I referred an ex-colleague and received referral bonus. Colleague went through interviewing and negotiation process for a different job posting, after my initial referral, which I did not directly refer and got the job. Colleague expected me to split the bonus and used emotional reasonings, also implying I wasn't directly responsible in them getting the job. I ended up transferring the whole bonus to them to end this. Was their request reasonable?

This question is very similar to Am I expected to share my referral bonus? although it does not address my scenario.

Background: I have a ex-colleague who I initially referred for a job posting that she she did not clear, but this helped her get in to the HR system. My ex-colleague later got a call for a different position apparently through Linkedin look up by my companies HR, and cleared the interview. When the HR enquired my colleague(now) for reference within the company, she provided my details without my consent, apparently it was learnt from HR during the process that giving a reference of an existing employee within the system will strengthen her case along with the possibility of better remuneration prospects. This reference information was provided to me directly by my friend post facto, for which I replied it was not a problem as I may still get some referral bonus, since I was the original referrer.

Two months after my colleague joined the system, she enquired with me about referral bonus with the explicit expectation of splitting the bonus with her. She also indicated that she had incurred some financial losses in her family and also been spending a lot of money on her house, the financial burden topic was brought up as one of the reason to split the bonus. The bonus itself is significant post taxes.

Hiring process from my past experience: From my past experience I know that once a candidate is referred by someone, even if the candidate apply for a different job through some other channel, the initial referrer gets the credit and bonus, since apparently the first referrer is technically the person who initiated the interest in the company and sparked the interest - based on what I heard. I have personally identified a suitable position and referred a candidate successfully second time and had learnt the referral bonus was awarded to the first referrer.

What have I done in the recruitment and post recruitment process of my colleague: Recruitment time: I helped her navigate the HR round for salary negotiations, based on a strategy which I have had personal success with. She was willing to accept a lesser salary due to the company’s reputation, but based on my strategy she managed to get significantly higher offer. I had also indicated during the initial stages what to expect in interviews, org structure and what lines of career can be pursued.

Post recruitment: Since she was new in the system, I had given her details about ongoing benefits which were not widely published and obvious to new joinees, helping her secure an additional monthly incentive. Although in all fairness, I would have informed her of this option, even if I had not referred her.

I understand referral does not mean recommendation, I did not influence the decision making process, but was still a referrer. The system within the company does reward existing employees for the sole purpose of identifying and guiding friends and ex-colleagues to the organization, which I believe I have done to deserve the referral bonus.

What was most aggravating: I guess it was her consideration that I did not help her enough to get the job and I do not deserve the bonus in the first place. She even said “Money, when not deserving, will not stick”, implying karma do not favor the undeserving ones.

The implication that she would let go of “her rightful money” to me, since she had already lost lot of money, loosing additional money from bonus does not amount to much.

What I ended up doing: I transferred the entire amount to my ex-colleague due to the aggravating nature of the discussion, to my wife’s dismay, who felt I’m taking an emotional decision over something that I do technically and ethically deserve.

What question I have: It’s just the entire process of who owns the Referral bonus in this specific instance and should splitting the bonus or handing over the bonus to referree, where it was not agreed in advance, constitute the correct decision? Do referrer needs to make the referral that results in employment to technically deserve the referral bonus?

Disclaimer: Although the discussion and topic may look aggressive, my colleague was very polite and we have high regards for each other. I also do not in the slightest, doubt the high ethical standards of my colleague or my own. She even made it clear that the whole HR process around referral is not very clear to her due to inexperience in the area. I don’t intend to burn bridges with her and would be sending her link to this discussion, possibly even recommend participating(anonymously?) in these discussions to be fair to her.

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    Comments are not for extended discussion; this conversation has been moved to chat.
    – Kilisi ♦
    Jul 31, 2021 at 0:20
  • "The bonus itself is significant post taxes." Did you give the whole bonus to her, or the post-tax bonus?
    – Acccumulation
    Aug 1, 2021 at 3:31
  • To save you some time, the link above is broken
    – htmlcoderexe
    Aug 8, 2021 at 10:37

7 Answers 7

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This bonus was something your company paid to you because they thought you should have the money. If the bonus was to be split, your company would have split it between the two of you and not left it to you to somehow share. Your company thinks you earned it. Otherwise you would not have the money.

This bonus is for referral alone. It is not for helping the other person once they got the job (which you did anyway, as a courtesy).

Where I live, I only refer people I would love to see as my colleagues and who I know would get the job even without my referral. So if I do get such a bonus, I would probably invite them for lunch to celebrate their new job, on me, since I got the bonus. But that's it. That lunch would probably be 10% of the bonus. Once we decided to invite more work friends and I paid for it all because we were all part of a team that made us who we are today, so they all have a part in that person being good at their job and consequently being hired. But again, we aren't that fancy, I paid a pub bill for 6 people, not a fancy restaurant's 5 course menu.

I don't think I would ever fork over money directly. Nobody had the audacity to ask me to either. On the other hand, I did nothing to earn that money, it just came to me. I would have done the same if there had been no bonus, so I might just blow it on something we all enjoy.

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    I did nothing to earn that money are you sure? May be not directly, but indirectly yes, you have done plenty. Because if what OP says is actually the case, the referees reputation affects both the possibility of being hired and the negotiation of a better remuneration.
    – Romeo Sierra
    Jul 30, 2021 at 6:29
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    @RomeoSierra I read it as "I did not spent any effort to get the money" irrespective whether it helped company/new hire. Indeed from the company point of view you earn the bonus because good referrals save a lot of money... but nvoigt seem to consider it more like winning a lottery (which I think is quite common view of referal bonuses at work or otherwise)
    – Alexei Levenkov
    Jul 30, 2021 at 6:37
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    Yes, I meant that as in "I did no work". Referrals where I live mean the HR will call you, on company time, to ask you about the candidate you referred. So you talk 20 minutes on the phone in the time you are already being paid for, telling the truth about something. That's not work. I would do that for free for a friend, but I will definetely take the money if the company offers some.
    – nvoigt ♦
    Jul 30, 2021 at 7:16
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    In my company (Central Europe), the referral bonus is between 1.2 and 3 times the average national pay (depending on the position the referred person was hired for), 10% of that is some extremely fancy lunch for (up to) three people in a Michelin rated restaurant...
    – mishan
    Jul 30, 2021 at 15:20
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    @nvoigt I upvoted and agree with most of the answer, but I disagree with "I did nothing to earn that money...". You made the connection between a willing employer and a willing employee that might not have happened otherwise. That has value.
    – TimothyAWiseman
    Jul 30, 2021 at 16:43
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It’s just the entire process of who owns the Referral bonus in this specific instance and should splitting the bonus or handing over the bonus to referree, where it was not agreed in advance, constitute the correct decision? Do referrer needs to make the referral that results in employment to technically deserve the referral bonus?

The way referral bonuses work is extremely simple: She gets a job, you get a referral bonus.

That's all there is to it. Nothing subtle, nothing confusing. No instances where splitting is required.

If either of you were confused about this, you should have asked HR. They would have explained that the referral bonus goes to the referring employee, not the new hire. And perhaps they would have explained that this was not a sign on bonus.

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  • In my case it's not that simple. The candidate did not get the job directly from the first referral I made, but I helped her in to the HR system. She got the job for another job posting, although it was me who helped her in to my company's system. The HR system does track all the referrals either directly or indirectly made by me.
    – Vijayan K
    Jul 30, 2021 at 15:23
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    @VijayanK it does seem to be that simple. You even mention yourself in the "Background" section of your question that she provided your details to HR for them to use as a reference. In which case you were a reference both times.
    – Aaron F
    Jul 30, 2021 at 16:11
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    The OP also doesn't realize the full $1400 will be reported as income to the government, and he'll be taxed on it, even if he gave it away. Just another subtle reminder of what a bad decision he made.
    – Mohair
    Jul 30, 2021 at 17:01
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    @VijayanK - yes, the money was $1400 post taxes. But you paid taxes on the entire amount, and got none of that. She gets $1400 without having paid taxes on any of that. Essentially, you paid her taxes for that bonus.
    – thursdaysgeek
    Jul 30, 2021 at 20:20
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    So OP actually paid taxes on more than $1400 extra income.
    – Daniel R. Collins
    Jul 30, 2021 at 23:22
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It is your company's policy to pay you for the referral. That money is yours, you own it once it's paid to you, and you can to do with it as you wish. If you decide before or after the process to share it, that is your decision to make. You could have said "no" to your ex-colleague and not given her anything, which would have been just fine. Either way, it was your choice, and you made it.

Now, possibly you're asking this here because your wife has voiced her disappointment that you gave the money to your ex-colleague? For me personally, I would not have shared it, unless it was spoken about and agreed upon before the referral happened. I would have told your ex-colleague "no, sorry" and left it at that.

I'm of the opinion that the comment "Money, when not deserving, will not stick" is emotional manipulation. When I read that, my opinion of your ex-colleague decreased substantially.

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  • I loved the simple reply! In retrospect it does look like my handling of the situation is a little over the top. The reason for my post is two-fold 1. Get a neutral opinion about who owns the bonus in this specific scenario 2. Lead my colleague to this discussion, to prove that it was inappropriate to have asked for bonus (even inadvertently). I did not want to get in to a debate contest with my colleague without neutral opinion(s).
    – Vijayan K
    Jul 30, 2021 at 14:54
  • @VijayanK: Just remember next time to have the debate/get opinions before forking over all of the cash.
    – Daniel R. Collins
    Jul 30, 2021 at 23:24
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    @VijayanK I would not pursue #2, leading your colleague here. Instead I'd encourage you to examine yourself, how you felt when she asked for the money, how you felt after you gave it, and how you felt after your wife disapproved. It could be that you need to establish better boundaries with others. People can ask all sorts of things from you, and that's their responsibility. How you react is your responsibility, and if you're allowing yourself to be manipulated, that's on you. Have hope however, it can be fixed, but it requires changing yourself. Do research on boundaries, it might help.
    – Dan Harper
    Jul 31, 2021 at 7:13
  • Grow up and be a man, stand up for yourself instead of deferring to Internet strangers.
    – mxyzplk
    Jul 31, 2021 at 17:57
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Referral bonuses are for the referring employee only, to incentivize people bringing good candidates to the company's attention. It is not customary and there is no expectation to split it with anyone. Of course the money is yours and you can do what you want with it, but this is pure charity, not fulfilling any professional expectation. You went above and beyond with helping her - just referring gets you eligible for the bonus, the additional help and preparation you did with her made it more likely to happen since it raised her chances of getting hired but was also purely optional.

New hires get hiring bonuses if the company wants to incentivize their joining.

Speaking as a manager: If I heard an employee was splitting referral bonuses with referrals (or even giving them the whole thing), I would immediately become concerned that there was something fishy going on and investigate. If it were explained to me in the terms above (and I believed it) I'd be satisfied there was no fraud afoot but I would note "easily manipulated, poor judgement" in my performance notes on you and make sure you weren't part of any vendor negotiations or similar.

Speaking as a person: You should listen to your wife more. You claim this person to be of unimpeachable ethics but they clearly manipulated you with sob stories and took $1400 from you that there was no reason on God's green earth for them to be entitled to. They were not "confused," they took you for a ride. If you're a sucker someone will take you for more eventually.

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I think all existing answers are good, but thought I'd answer to make it clear why companies offer referrals and therefore who is expected to receive it.

Hiring people is expensive and time-consuming; you either need to pay someone internal to do it (who may be a generalist and not able to target exactly the right groups) or you pay external recruiters to do it, who may be more specialised, but likely serve multiple different clients and may not always prioritise your company. By providing a recommendation, you cut through all of that, not by having to do any work, but just because you know someone. It doesn't matter than you initially suggested her for a different role, you made that initial connection and you saved the company money. Therefore you are expected to receive the mony. You don't need to do anything else to deserve or earn the money.

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  • But the question didn't ask "why" companies offer referral bonuses, so this answer seems unnecessary.
    – musefan
    Jul 30, 2021 at 11:37
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    I was hoping the "why" explained who deserves the referral fee (and why the pay it to the referer and not the other person). The OP had lots of irrelevant detail in there which made me feel they didn't understand why they were getting money
    – matt freake
    Jul 30, 2021 at 11:39
  • Who deserves it still doesn't answer the question. The question is about the expectation and result of the process, not the reasoning as to why it is how it is. I am not suggesting it isn't useful information for the OP, I am just of the opinion that it doesn't meet the Q&A format of this site.
    – musefan
    Jul 30, 2021 at 11:45
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    Question: "am I expected to split the fee?" This answer: "The fee is for XYZ. Therefore you are expected to receive the money". Not sure what the problem is, this directly answers the question.
    – BittermanAndy
    Jul 30, 2021 at 14:14
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The company awarded the money to you, there is nothing more to discuss.

There is zero reason you should ever tell an acquaintance about such a windfall.

Ouch, she felt entitled to money awarded to you and convinced you to feel the same way.

Sadly, this is one of those situations where this applies:

I can explain it to you, but I can't comprehend it for you.

- Edward I. Koch

If the referral bonus was meant for both of you then the company would have split it. Additionally it should have been a $700 referral bonus and a separate $700 sign-on bonus.

By definition a referral bonus is:

An award given to an employee who helps the agency recruit new talent by referring someone for an advertised, hard-to-fill vacancy.

Source

So your ex-colleague is in the wrong; they chose to burn a bridge through misunderstanding or possibly malice.

If this had been a "sign-on bonus" then your colleague would have been entitled to the specified sum of money.

If this person needed money to get through some financial troubles then that's what they should have asked. This would have given you the chance to decide whether or not to gift money to this person.

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The referral bonus is intended for you alone. Your ex-colleague does not deserve it more than I, or other Workplace SE answerers, do.

Additionally, I would be worried having recommended a person with such low ethics. She clearly manipulated you using shady psychological tactics. Be wary about her in the future.

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