In Simple Words
Imagine trying to pick the best chess player out of a crowd. Only a master chess player has the expertise to accurately assess who among their acquaintances truly plays at an elite level, whereas a beginner cannot distinguish between a decent amateur and a grandmaster.
Male referrers in Kolkata
- Fixed referral fee
- Group used for comparison
- Rs.60 plus up to Rs.50 performance pay
- Higher-scoring referrers chose stronger referrals
Ability-dependent result in a laboratory task. The 0.371 coefficient is a score-by-contract interaction, not a high-ability subgroup mean effect. Lower bonus arm omitted.
See source →Research question
Employers cannot easily observe applicant quality and struggle to know whether existing employees possess the screening capability required to identify and select top talent from within their social networks.
Participants
N = 561 original participants and N = 407 returned referrals, adult males in Kolkata, India.
Study Design
Lab-in-the-field RCT measuring original participant performance, randomized financial incentive structures, and referral cognitive task scores using Heckman selection models and self-reported performance predictions.
Results
High-ability original participants offered performance pay selected referrals who scored 0.371 standard deviations higher on cognitive tasks (p < 0.05), whereas low-ability participants showed no statistically significant improvement in referral performance (0.084 standard deviations) because low-ability participants could not accurately predict referral performance.
Takeaway
Restrict high-stakes screening responsibilities or offer performance-indexed referral bonuses specifically to top-performing current employees who demonstrate high baseline job competency.
Source and citation
See source →Read alongside the research
Plain-English glossary
Original explanations, informed by the references below. Examples are illustrations, not data from the studies above. The research text stays unchanged.
- Baseline
The starting measurements in a study. Researchers use these to compare what participants were like at the start with what happens later.
ExampleBefore a training programme starts, researchers measure workers’ earnings. That first measurement is the baseline.
GET-IT glossary · Baseline characteristics ↗Read more about baseline →- Randomized controlled trial
A study that uses chance, like drawing lots, to decide who receives each option being compared. Researchers compare the groups’ outcomes to estimate the effect of those options.
ExampleA lottery assigns volunteers to a training programme or a comparison group. Researchers then compare their outcomes.
GET-IT glossary · Randomized study ↗Read more about randomized controlled trial →- Statistically significant
A label used when a result passes a chosen statistical threshold, often p < 0.05. It does not show how large or useful an effect is. A result that is not statistically significant does not prove there is no effect.
ExampleA study reports p = 0.03 against a 0.05 threshold. It passes that test, but the effect could still be too small to matter.
American Statistical Association · Statement on p-values ↗Read more about statistically significant →