But it has its flaws - major flaws, some would say.

http://chrisparnin.me/pdf/stress_FSE_20.pdf

"To understand if coding interviews—as administered today—can induce stress that significantly hinders performance, we conducted a randomized controlled trial with 48 Computer Science students,comparing them in private and public whiteboard settings.

We found that performance is reduced by more than half, by simply being watched by an interviewer. We also observed that stress and cognitive load were significantly higher in a traditional technical interview when compared with our private interview.

Consequently, interviewers may be filtering out qualified candidates by confounding assessment of problem-solving ability with unnecessary stress."