In the later stages of the hiring process, it’s common for employers to ask candidates for references.
If you’re asked by a job seeker to serve as a reference, you may get a
 call from the employer, who will ask you some questions about the job 
seeker. It sounds simple enough but can become more complicated if your 
view of the job seeker isn’t as rosy as the job seeker may think.
If you’re asked to be someone’s job reference, but for various 
reasons, you don’t feel comfortable doing it, you may wonder whether you
 should decline or go ahead with it and give the employer your honest 
opinion. It’s a sticky situation, because you don’t want to cause 
friction between you and the requester, but you also don’t want to be 
put in an awkward position when faced with the employer’s questions.
The circumstances surrounding the situation may impact your decision —
 how well you know the person, what policies your company has about 
giving references, the depth of information you’ll need to provide. Yet 
the general consensus is that if you don’t have something nice to say, 
it’s probably best to say nothing at all.
“If you are approached to be a reference, but you feel you cannot 
speak appropriately or positively about a person’s work ethic and 
supporting skills, the best possible thing you can do is politely 
decline,” says Adrienne Tom, lead résumé strategist at Career Impressions.
 “If you do not feel 100 percent confident addressing someone’s work 
history or working style, you should never offer to be a reference for 
them.”
As Tom points out, references play an important role in the 
recruitment process and may even make or break a job offer. “Since 
references are a chance for employers to add to the information they 
learned from the candidate’s résumé and in the interview, what they find
 out from the references will either confirm their desire to hire the 
job seeker or make the decision not to extend the job offer. You do not 
want to be the one that prevents someone from getting a job offer simply
 because you don’t know them well enough or because you had a difficult 
working relationship to them.”
Consider your company’s policies
Sometimes, it may not be you who has the problem with giving a reference. It could be your employer. “Employees need to be aware of their employer’s policies regarding giving references,” says Keith Wolf, managing director at recruiting firm Murray Resources. “Some employers prohibit their employees from giving negative references, while a growing number of companies restrict giving any information at all, other than confirming the former employee’s dates of employment. Beyond the legal implications, it comes down to a matter of preference.”
Sometimes, it may not be you who has the problem with giving a reference. It could be your employer. “Employees need to be aware of their employer’s policies regarding giving references,” says Keith Wolf, managing director at recruiting firm Murray Resources. “Some employers prohibit their employees from giving negative references, while a growing number of companies restrict giving any information at all, other than confirming the former employee’s dates of employment. Beyond the legal implications, it comes down to a matter of preference.”
Consider the level of the job seeker
Charley Polachi, partner at Polachi Access Executive Search, says that the impact your recommendation has may depend on the level of the job seeker. Polachi notes that for junior to mid-level employees, references may only be asked basic questions, such as dates of employment, positions held and compensation. In situations like this, you may be more inclined to agree to serve as a reference. However, you won’t always know what types of questions you’ll get, so keep that in mind when making your decision.
Charley Polachi, partner at Polachi Access Executive Search, says that the impact your recommendation has may depend on the level of the job seeker. Polachi notes that for junior to mid-level employees, references may only be asked basic questions, such as dates of employment, positions held and compensation. In situations like this, you may be more inclined to agree to serve as a reference. However, you won’t always know what types of questions you’ll get, so keep that in mind when making your decision.
When it comes to references for senior-level executives, more 
information is often requested. “References are a critical component of 
vetting top-level candidates,” Polachi says. “In some cases, as many as 
14-15 professional contacts can be approached for a finalist. Since the 
basics of these types of leaders are basically in the public domain, the
 value-add of in-depth reference checking can be a game changer in 
selecting the best candidate.” So if the job seeker requesting your 
reference falls into this category, and you’re not completely 
comfortable speaking on his behalf, you may want to find a way out.
Declining the request
If you’ve decided that you don’t want to serve as a reference, you may be tempted to come up with some sort of excuse. Resist that urge and lead with politeness and honesty. “When asked to give a reference that one would rather not give, the best policy is to be honest with the requester,” says Arron Grow, author of “How to Not Suck as a Manager” and founder of business consulting company Workplace Sanity Group. “How open to be about this will depend on the rapport between the two individuals. If there is not a close connection, a simple, ‘I’m sorry I wouldn’t be comfortable doing that’ should suffice.”
If you’ve decided that you don’t want to serve as a reference, you may be tempted to come up with some sort of excuse. Resist that urge and lead with politeness and honesty. “When asked to give a reference that one would rather not give, the best policy is to be honest with the requester,” says Arron Grow, author of “How to Not Suck as a Manager” and founder of business consulting company Workplace Sanity Group. “How open to be about this will depend on the rapport between the two individuals. If there is not a close connection, a simple, ‘I’m sorry I wouldn’t be comfortable doing that’ should suffice.”
Grow goes on to say that if you do feel comfortable sharing more, you
 should. It will only help the job seeker in the long run. “A better way
 to go … would be to explain why there is hesitation about giving a 
reference. People cannot grow if they do not know what areas they need 
to work on. Hearing about an area that might be in their blind spot will
 likely hurt at first, but not knowing where they could do better will 
hurt them even more in the long run. For this reason, people should 
rather want to know than not, so if the conditions are appropriate, 
share your reasons for not being willing to give a reference. Tact and 
diplomacy are the keywords in this situation.”
While the hope is that any request you receive to give a reference 
will be from someone you had a good working relationship with, it may 
not always be the case. By assessing the situation and being open and 
honest with the requester, you should exit the conversation with your 
relationship intact.