A reference check can prevent your organization from acquiring someone else’s employee problem and assure that your new employee is qualified to do the job for which they are being hired.

There are two ways in which a bad hire can injure the organization: acts of commission and acts of omission. In the former case, the employee commits an act that directly threatens the organization, such as stealing money. In the later case, the employee fails to do the work for which he or she was hired. In one recent case, a company's Controller embezzled a large amount of money; however, it was the Controller's incompetence at managing the firm's cash flow that caused the business to fail.

Organizations set themselves up for calamity when they rely solely on the candidate’s self-serving testimony about their work history. That is why it is all too common for decision makers to hire candidates who interview well rather than candidates who are well-qualified.

Interviews are of limited value in assessing a candidate’s qualifications for employment, since the information is coming from the candidate. At best, we are depending on the candidate to be a fair and accurate judge of his or her abilities and skills. At worst, we are deceived with fabrications, exaggerations, and omissions by an unprincipled candidate.

It is far more useful to interview the individuals for which the candidate worked. The comments of these individuals, taken together, provide a realistic picture of the candidate’s experience, abilities, and strengths, as well as weaknesses.

References need not be limited to those provided by the candidate. Prior managers or supervisors can be located by placing a call to employers listed on the candidate’s resume.

Really sneaky candidates will provide fake references. Verify the position and employer of the reference to make sure it is not just a friend of the candidate answering on a cell phone.

If you check references through "friends in the business," be careful that your networking doesn’t tip off the candidate’s current employer, causing embarrassment, or worse.