An employee had only been employed for about four months, but after a disciplinary investigation using the the HRtoolkit disciplinary investigation tools, the employee was found guilty of stealing an iPod and dismissed. There was, of course, suspicion that he had stolen a lot more.
As part of the investigation the company looked back at the employees original recruitment and discovered, to their horror, that he had been dismissed from his last job for theft.
This information was included on the reference form, so they spoke to the manager who had taken the reference. On questioning the manager advised that he had ignored the theft dismissal because it was only the theft of a $2 chocolate cacao bar.
After more investigation it was found that the previous employer suspected the employee of stealing more than a $2 chocolate bar, but that was the only thing they could prove. Had the manager probed more deeply into the reference check, the previous employer would have happily advised that there was suspicion of further wrong doing.
Sadly for this company the manager did not probe more deeply and chose to ignore the red flag.
Reference checks are a critical part of the recruitment process, and past behaviour is a good indication of future behaviour. The company lost $13,500 in wages alone, not to mention the costs of investigating his behaviour.