http://www.gayle.com/blog/2013/09/18/companies-who-give-cand...
At the core of the problem is that this approach can be used to burn a lot of a candidate's time without an equivalent investment from the company.
I've mentioned this before - I applied (maybe 5 years ago) to a company that first asked me to take a Java test (about 1 hour of work). Then the recruiter called me and sent me a take home project that should take "5-7 hours". I did this, crickets chirped for a month, though I did check in with the recruiter for a while (I gave up eventually). Finally the recruiter called me with a one-line brush off "we've decided not to move forward at this time…"
Granted, this was a bad experience, and it won't always be like this. But I'm pretty close to saying "never" to these exams.
I thought Gayle's suggestions were good. She goes so far as to suggest a 90% passage rate - that you should not be giving these tests to people who are unlikely to pass then, using them to confirm, not screen.