Referral: The Most Honest Feedback
When I recommend someone to work at my company, it's because I've worked with that person before and I actively want to do so again. That's probably the single-most clear, honest and positive feedback I can give to any previous colleague.
Because, let's face it, everyone has some good qualities and some bad ones. If I say something nice about you, I probably mean it, but it doesn't mean that you don't have bad qualities that counterbalance and overwhelm the positive. Whereas if I refer you to a company at which I work, I've weighed all those factors one against the other, and I've decided that, in the balance, I'd still like to work with you.
If a potential employer asks me about someone with whom I've worked, I'll try and give balanced feedback that includes the things I like about that person's work and things I disliked, or found to be challenges. Most of the time, I'll emphasize the positive, but I'll still try and give something from both sides. I don't want to bad-mouth that person, but I do want the employer to get a sense of what the tradeoff is. That said, if that potential employer isn't my employer, I'm not going to push too hard. Even if I don't want to work with that person again, it doesn't mean that I don't want them to find employment anywhere. In fact, I'd prefer them to find employment elsewhere, because that guarantees they won't seek employment with me.
Most people want to be nice, to be perceived as nice by others and by themselves. And as long as being nice doesn't have a direct cost, most people are willing to do so. So if I've worked with someone, and I don't want to work with that person again, doesn't mean I'm not willing to comment on your good sides (and bad) to a potential employer, and let them make up their own mind. If the employer is using different criteria than I am (or isn't listening very closely to what I say), they may end up wanting to hire that person. So much the better; if there's a fit, that's good for everyone.
But if my employer is asking, I have to ask myself, "Do I want to work with this person?" If the answer is no, then I'm going to do my best to make sure that my employer understands that, even if I use the nicest possible terms to get the job done, "Joe is a great guy; friendly, works hard. I'm not sure he's ever going to be a great programmer. He can get stuff done, but he doesn't seem to really have that design sense that you need to be really good, and I just didn't see any sign that he was getting any better as time went on. I'd probably pass." It's honest, it's direct, and most employers will make the right call if you're being that direct. (I've never worked with a developer named Joe; he's just an example).
If another company were asking about Joe, I might be a little less direct. "Joe is a great guy, friendly, works hard. He wasn't in a senior role when I worked with him; I'm not really sure I can picture him in that role, but I haven't worked with him for a few years, so he may have taken on new responsibilities and skills since I worked with him." This is much more non-committal; a really astute observer might ask some probing questions that I'd answer more or less honestly and get to the heart of the matter, but most people would stop there, and draw their own conclusions.
This is probably why, in part, referred employees tend to be better than the ones that come through regular employment channels. Because the referrers have pre-filtered their past colleagues through the "Do I want to work with that person again?" question, and anyone they refer has passed the test. And despite this fact (or, rather, because of it), it's probably a good idea not to make referral bonuses too high: you don't want to get to the point where the incentive to refer outstrips the incentive to avoid referring people with whom you don't want to work.
So, if I've ever referred you to a company at which I've worked, and they've hired you, take heart, that means I'm willing to work with you again, and said good things about you, and that puts you in the upper tier of people I've worked with. It's probably the most unambiguous feedback you could get from me. And if any of you choose to refer me in the future, I think I'll take that as a high compliment.
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