Call it what you will, but as a hiring manager you really should review as much code as possible before hiring. Usually they can't show you proprietary code from their last company, so unless they've already done open source contributions, there won't be much to look at unless you give them a project.

In the past I've given candidates projects that we've come up with together. Check out the ones mentioned in the article... fairly straightforward Rails plugins. One of the was particularly successful, and included in the Advanced Rails Recipe book.