“One time I called a candidate's reference and she said that the candidate had been fired for theft—a fact the candidate had not revealed to me,” recounted Matthew, a serial tech entrepreneur. “Another time I called and discovered that the reference himself had been fired months earlier. And then there was the time that the reference paused, took a deep breath, and explained to me that he's found that giving bad references comes back to haunt him. He prefers to avoid that situation now, and he hoped I would understand. The pause before the last word was suggestive, to say the least. Oh, and I can't forget my favorite: I once called a reference only to notice that her voice sounded remarkably similar to the candidate's. I called back later for some additional clarification, only to get redirected to the candidate's own voice mail.”
These are not mistakes that you want to make. Bad references are really bad; you will lose an offer for them. But even if your references are just okay (not terrible), managing them can turn those okay references into great ones.
References serve potentially three purposes.