The company should consider the candidate's reference carefully.
A questionable reference, for instance, can be a red flag. However, it isn't advisable to blindly accept the word of the reference provider. Before jumping to conclusions, take a second to consider the factors involved.
Who provided the reference in question? If you know and trust the reference provider, you can feel comfortable passing on the candidate. But if you don't know the reference provider, as is most likely the case, you may want to weigh other factors in your decision.
What if an isolated incident happened when the candidate first started? What if they weren't a perfect cultural fit? These things could negatively influence a candidate's reference, and yet don't necessarily bear on the candidate's compatibility with your organization.
If after talking to a reference you are left with more questions than conclusions, you may want to follow up with a series of more specifically aimed questions.
During your initial or follow up conversation with the reference provider, ask quality questions. Questions to consider include:
By getting a sense of the reference's relationship with the candidate, you can gain insight into potential biases they may be holding. Be sure to ask about the candidate's positive and negative qualities to try to tease out a more objective perspective.
Ideally, references act in a way that is purely professional and objective, but it's worth remembering that they are people, and are therefore capable of error. Although it shouldn't happen, personal preferences, relations and/or histories can certainly impact references.
A bad reference is worth consideration. If it's coming from a trusted source, then it may be grounds for rejection. In most cases, one poor reference shouldn't end consideration of a great candidate.