I don't believe anyone should be expected to work for nothing. It does however seem reasonable (to me) to expect to pay someone with no experience less than someone who does have some; so I would not go along with Martin' idea (or the Belgian system if you prefer Martin!), but probably have a pay review every 4 months for the first year or so until they have learned the job, rather than just every year.
As for putting in a word for your son, yes, it has been going for a long time and is a tried and tested method which works well, as the employer, knowing the sort of person th father is, would have some idea of the sort of person the son is likely to be rather than having to make a judgment on a 5-minute interview of someone they have no prior knowledge of.  Also, the kid, being aware of the fact that his father's reputation is on the line as well, is more likely to make the effort to perform well - at least that is the idea!