Employment references have been used as one of the resources in selecting successful candidates. It is really to gauge how other employers perceive a former or current employee.
Most often a positive review is given because candidates provide references from people who will speak highly of them. Also, employers do not want to provide negative image of a former employees because of a potential lawsuit. (refer to References)
If done properly, reference checks can be a great resources in hiring the right person for the job.
The February 11, 2016, Harvard Business provides recommendations on checking references effectively, The Right Way to Check a Reference