Random chance, maybe? but I think it works better than people think. I think employees put more thought in to it than we give them credit for when they are asked for recommendations. Don't we all know that one person who is really good but unemployed because s/he isn't very confident?
My advice: figure out how well the team member knows the new guy before you decide. Also check if the guy doing the recommendation is doing it because of religion, language, or some other crap. Also, I don't hire team members' wives or boyfriends any more.
Also, be wary of recommendations from people who work in a different part of your company. They may think they understand what you do when they don't, and use up your time with unqualified recommendations. Learning how to politely decline can save a bunch of time.
seems like good advice to me. My "Best hire ever" was the roommate of someone who worked for me at the time, and, as usual I kinda eased into the relationship, with short and well-defined contract gigs at first. But yeah, it is important to know the motivation of the recommending employee, and to do some evaluation of your own. But in my experience, it's a pretty good place to start.