We now only hire engineers using OSS paid bounties (and it's awesome)
Here is why:
We get to test candidates on real-world problems, instead of asking them to solve some meaningless programming puzzles.
Because candidates get paid for the work they contribute, it is fair to ask for solutions to more complex problems (that would have required too much time in a normal interview).
It's a win-win for both candidates and the company: candidates are happy as they get compensated for their successful interview work; we are happy because a bug is solved or a new feature is implemented.
If a candidate is hired, he already has a context of the work he will be doing and he is productive from day zero.