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If person A gives person B a recommendation, can you call A recommender and B recommendee— or are these words made up?

I've seen both forms used in everyday language (e.g. magazines), but never in a dictionary or grammar book, or in literature.

Also, what is the process of creating recommendee or recommender out of recommendation called?

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It depends what kind of reference we're talking about.

Referrals, as suggested by @Autoresponder, is the normal term for "unsolicited" endorsements - for example, A is a satisfied customer who suggests to others that they should consider using B's products/services.

Reference (sometimes referee) is normally used in contexts where B suggest to someone that they should contact A for a "third-party" (in principle, unbiased) opinion on the quality of B's products/services.

There are many other types of recommendation, obviously. Proposing someone as the chairman of a group you're in, or as a suitable romantic attachment for your unmarried sister, for example. The list of words available for all the different contexts is too long for me to even attempt a summary.

I would say the process by which we create words such as recommendee, recommender, and recommendation from [re]commend is linguistic production. The prefix re-, and suffixes -ee, -er, and -ation are usually referred to as productive. Often contrasted to other prefixes/suffixes which were used to form new words in the past, but which are no longer considered acceptable for use in generating new word forms today.

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I think of those I recommend as my referrals, and I recommend the word for telephonic or email contexts. I've never heard the usage Recommendee till now, but it's probably useful for highly formal situations / formal writing.

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