When to pass-by-reference in PHP

If you mean to pass a value (so the function doesn't modify it), there is no reason to pass it by reference : it will only make your code harder to understand, as people will think "this function could modify what I will pass to it — oh, it doesn't modify it?"

In the example you provided, your do_my_hash function doesn't modify the value you're passing to it; so, I wouldn't use a reference.

And if you're concerned about performance, you should read this recent blog post: Do not use PHP references:

Another reason people use reference is since they think it makes the code faster. But this is wrong. It is even worse: References mostly make the code slower! Yes, references often make the code slower - Sorry, I just had to repeat this to make it clear.

Actually, this article might be an interesting read, even if you're not primarily concerned about performance ;-)

PHP makes use of copy-on-write as much as possible (whenever it would typically increase performance) so using references is not going to give you any performance benefit; it will only hurt. Use references only when you really need them. From the PHP Manual:

Do not use return-by-reference to increase performance. The engine will automatically optimize this on its own. Only return references when you have a valid technical reason to do so.