There are 3 ways generally referral works
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Company has internal job portal. Employees goes on that portal and there is a option to refer someone for a role. Employee uploads your CV and refers you against the role. Generally companies have a policy stating a time bound SLA within which recruiter of that role will go through the CV and take the action.
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Employee knows hiring manager, so directly shares your CV with hiring manager. In turn if hiring manager likes your profile, he/she/they will ask the recruiter to reach out to you and schedule interview
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Employee knows the recruiter and direct shares your CV with the recruiter.
Majority of the time it is case 1. Case 2 and 3 happens rarely, when employee closely knows you and actually vouch for your capabilities.
Also referral makes sure, that either recruiter or hiring manager actually reads your CV, against normal application where high probability is no one will read your application and CV
Hope this helps