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I think that the short hand of "this person vouches for this other person" is a good enough basis for a lot of pre-screening criteria. Not that it makes the person a shoe in for the job, but it's enough to say that you can go by on a referral. 

You might say, this is a strange way to pick people, but this is how governments interview people for national security roles. They check references. They ask questions. 

I imagine more questions would be asked to the third party who is 'personally referring' the applicant, leading to a slightly different series of interviews anyway. In my experience, people have to work a lot harder to get a job, than to keep one. I know that it's true with everyone that referred me to just about every position. Then if I perform badly it looks poorly on them, but after a certain time, I'm the one referring people onwards, so I have to make my own assessment of if I'm willing to put my reputation on the line.

It’s a very useful signal as a hiring manager, assuming you trust the reference, but also leads to problematic incentives where people feel like they need to spend resources on being liked by those giving references in order to get a job. “Spend resources” here can be understood to include a wide variety of behaviors, including good things like working well with others, innocuous things like networking, but also dangerous things like flattery or (for example) not advertising that the giver of references is a harasser.

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