Earlier quoted context omitted.
> internal references? if you've got a couple of internal folks who are doing good work, and they all worked with and vouch for old bob, maybe that's better than anything you're going to find out from At big companies this is hard to scale because you have to protect against nepotism at the top layer. This forces policies protecting against the bad outcome. At small companies this does happen.
Provided references are at the core the worst way to judge if someone can do the job and the laziest way. If you want to rely on references you have to get them yourself through background check or the risk of gamification is huge. Get a sense of the projects they have worked on if those skills relate to the position. Make a decision based on that. Random coding tests, whiteboarding, buzzword dropping are only helpfu…
However, OP was talking about internal references. This would be a situation where I work at Company A, but I know you and trust your work. Therefore, I refer you to Company A, big up you a little and suggest that they pursue hiring you.
The difference is that if you suck, it reflects poorly on me (and quite likely kills my dreams of upward mobility). Normal provides references don't have the same motive to be truthful!