Would you hire an applicant without conducting an interview? While almost no one would say "yes" to this question, many people probably have hired applicants without conducting a reference check. Like any other selection tool, the reference check is not fool-proof. But, as I will discuss below, a reference check is generally worth the time it takes to perform one.

References have a number of legal liabilities associated with them, which is probably one of the main reasons that companies are cautious in discussing a past employee. Most of these legal liabilities involve the reference provider, although there are some legal issues for the reference checker as well. The focus here is on the reference checker, so I will spend relatively little time discussing legal issues.

It should be noted that there are different types of reference providers. Many job applicants will offer the names of people who know them (i.e., personal references). These individuals may be former supervisors, peers from earlier jobs, and perhaps even friends. Be aware that they may not necessarily be the people they say they are! Most company application forms also require the applicant to include the names of past supervisors. Although those names are not always accurate, past supervisors may be more reliable about sharing information than personal references.

There are probably two major reasons a prospective employer should conduct reference checks. First, a reference check enables the employer to verify and corroborate information provided by the applicant. Because a relatively large number of applicants provide false information, it is important to verify the information that applicants provide. One of the few ways to detect false information is by confirming the information (e.g., dates of previous jobs) with the former employer.

A second reason to conduct a reference check is to reduce liability associated with a negligent hiring situation. Briefly stated, a negligent hiring suit is based on the hiring of an applicant that the employer knows, or should have known, possesses some trait, or has a history of prior conduct, which would create an undue risk or harm to others in carrying out his or her employment responsibilities. Even if a thorough and proper reference check does not reveal a potential problem, by doing the reference check, the employer has taken a step toward documenting that "due diligence," the opposite of negligence, was used in the hiring process.

Probably the major reason that companies skip doing a reference check is that they question the accuracy of the information they will receive. Despite the perception that references often have absolutely no validity, a recent study showed the correlation between the reference information and job performance is about .18, but corrected for statistical artifacts, it is about .29 (correlations range between .00 to 1.00, with most good selection tools somewhere between .30-.50). Although .29 is still just a modest correlation, and other selection tools (e.g., structured interviews) have more impressive correlations, a reference check may get at attributes that cannot be easily assessed elsewhere.

Why is the correlation quite modest for reference checking? I believe that the main reason is that reference providers tend to be quite lenient in the information they provide and generally speaking, are reluctant to say something that is terribly negative about a former employee. This hesitancy is probably due to at least two factors: fear of legal repercussions (e.g., a lawsuit will be filed for defamation) and guilt associated with hurting a past employee's chances for employment. Based on these issues, the likelihood of a false negative (i.e., a problem applicant being labeled "acceptable" based on an overly lenient reference) is relatively high. Of course, there are also stories indicating that false positives (i.e., a good applicant being labeled "unacceptable" based on an overly severe reference) sometimes occur, such as when a past supervisor has a personal vendetta against the employee. In some instances, all the reference checker may get is a confirmation (or, possibly, a disconfirmation) of an applicant's dates of employment and job title. Again, however, this may be useful information in that it might reveal some discrepancies with what the applicant has provided (e.g., information listed on his or her resume). The bottom line is that while reference checking is far from a perfect science, it may reveal valuable information.

Overall, there are several good reasons for doing, and few reasons to not do, reference checks. Each organization should develop policies regarding the inclusion of reference checks and how they are conducted. Below are some suggestions for companies that choose to perform reference checks.

Do: Standardize the reference checking process as much as possible; work with a standard set of questions.

Do: Make sure that your questions are job-related (e.g., cover relevant skills).

Do: Try to reach past supervisors; they are more likely to give accurate information than personal references.

Don't: Ask questions that are illegal to ask the applicant (e.g., about disabilities).

Don't: Fail to document the information you receive, even if it is a statement from the past employer that they don't provide reference information.

Don't: Do a reference check for some applicants, but skip the process for other applicants. This might be viewed as an indication of discrimination.