The job market is undergoing a shift. Increasingly, companies are turning to internal employee referrals to make hiring decisions. But the problem lies in motivating employees to make quality referrals--and rewarding them when they do.

Employee referrals are now the number one source for top candidates, leading to more hires who are a better cultural fit. Some companies have a staunch goal for referrals: at accounting firm Ernst & Young, employee referrals make up 45 percent of non-entry level placements. That’s up from 28 percent in 2010, and the firm hopes to boost that number to 50 percent in the near future. Other companies, like Deloitte and Enterprise Rent-A-Car, are offering iPads, big-screen TVs, and cash incentives to encourage employee referrals.

But what of companies with a tight budget? How can they best incentivize employee referrals? If HR managers want to ensure current employees keep making quality referrals, they need to fine-tune their employee referral process. Here are the five best strategies for rewarding employee referrals:

Create a budget. Large, lump-sum cash rewards aren’t the best way to reward employees who’ve made a referral. At an average firm, the referral-to-hire rate is one in 10, which means employers only reward one person out of every 10 who make a referral--not very encouraging. Instead, HR managers should create a budget that allows every employee who makes a meaningful referral to get a piece of the pie. That means everyone is encouraged to keep referring, but the employee whose suggestion leads to a hire gets the best or biggest prize. A tiered rewarding process allows employees to be rewarded immediately--not months after the fact.

Offer small gifts. Small gifts like T-shirt prizes, gift cards, and raffles are a great way to spend your employee referral budget. HR can choose to raffle off a larger prize, such as a laptop or TV, providing each employee who makes a referral a ticket or chance to win. Regular, small gifts offer a great reminder to keep employees engaged in the recruitment process.

Keep rewards timely. Often, too much time amasses between an employee making a referral and the time of hire. Rewards for employee referrals must occur closer to the time of the actual referral rather than after making the hire, which is out of the employee’s control. Remember: reward the action, not the hire.

Spread recognition. Sometimes, gifts and cash don’t really say it. Let employees know their involvement in the recruitment process is appreciated by regularly recognizing them in front of their coworkers. Send out a company email thanking employees who have made referrals to grow your team, or recognize them at your next staff meeting.

Make it a cycle. Think of employee referrals as a constant necessity rather than something that’s just done during the hiring season. Encourage employees to make referrals at any time, and keep a list of referred candidates and employees who’ve mentioned them. This way, you’ll create a VIP pipeline that allows you to access a pool of qualified candidates whenever a new position opens up.

Rewarding employee referrals can be tricky if you’ve got a tight budget or tons of applicants to handle. Ensure employees are properly rewarded for the process, and make the hiring season significantly easier.

Kes Thygesen is the Co-Founder and Head of Product at RolePoint, a complete social recruiting suite that provides unrivaled access and reach to quality job candidates. Connect with him and RolePoint on LinkedIn and Twitter.