I have been on both the mentee and mentor side of this, and it's been my favorite approach. I would add a couple things.

1) Make sure the mentor likes this role, and that they understand it's their responsibility to guide the new person or to reach out for assistance if needed.

2) This person should be a peer, but that they should be able assign exercises to the new hire to advance their knowledge. Maybe this could be pairing on bug fixes.

Also, I don't know how well this would work at firms where nobody "has enough time" for this. How does one make the time, or change things so that people don't feel that way?