In Simple Words
Think of paying a talent agent a flat fee to bring any singer to an audition versus paying them a bonus only if the singer gets hired. Doubling the flat fee makes the agent happier, but they still bring their neighbor; only a bonus tied to performance forces the agent to look for real talent.
Male referrers in Kolkata
- Rs.60 fixed referral fee
- Reference referral process
- Rs.80 fixed referral fee
- No clear referral change
- Rs.110 fixed referral fee
- No clear referral change
Laboratory study of male referrers. Performance-pay arms omitted; the summary reports no arm-specific quality scores.
See source →Research question
Increasing flat-rate monetary rewards for job referrals fails to improve candidate quality because fixed fees do not align the referrer's financial interest with candidate productivity. Without output-contingent rewards, higher unconditional payouts yield identical recruitment choices.
Participants
562 original participants and 407 referrals (adult males aged 18 to 60) in Kolkata, India.
Study Design
RCT laboratory experiment comparing three fixed payment tiers (Rs. 60, Rs. 80, Rs. 110) against performance-indexed payment tiers (Rs. 0-20, Rs. 0-50).
Results
Increasing fixed referral fees from Rs. 60 to Rs. 80 or Rs. 110 produced zero statistically significant impact on referral quality, choice of candidate, or task performance.
Takeaway
Reallocate marginal recruitment budget away from increasing flat referral bonuses and toward performance-contingent bonuses tied to referred worker productivity.
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.
- 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 →