But I wasn't getting the impression that was the kind of coding being referred to by the OP. I've heard from other companies giving coding tasks that exceed the size of a whiteboard - but I've never heard of any research done about the value of this.
I've never asked them to write large projects in an interview, though I've sometimes asked to see some large projects they have written (e.g. a CPAN module).
As indicated in the root node, I feel the cost of hiring the wrong person is
enormous and so I feel it is well worth doing much more than a simple one hour job interview.
I prefer multiple one-on-one interviews with multiple interviewers.
During these interviews, candidates will be asked to write code and solve problems.
Also, cultural fit is assessed (often by asking behavorial questions).
BTW, Google typically perform five one-on-one 45 minute interviews
after you get through screening.
To offset the high cost of multiple interviews, you need to find
cheap ways to screen out the glaringly incompetent and the resume liars
and simple coding questions are a good way to do that in my experience.
I cannot rigorously prove that all this effort is worth the cost.
More details of my preferred approach to interviewing can be found in On Interviewing and Interview Questions.
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