This is a great way to find good people. Many firms give bonuses to employees who bring in winners. One caveat--make sure you would hire that person were it your own company. Nothing can strain your relationship with management more quickly than a bad recommendation by you.
If you are a good employee he might even ask if you have any friends looking for work. If he likes you he will assume your friends have the same work ethic you do. Make sure your friend is hard working and reliable, it can get awkward if it doesn't work out, on both ends.