> In the end, if you make it too hard in an employee market, you will have good to great candidates drop off... if you make it too easy, you will wind up at the bottom of the barrel. Market pay will also vary wildly and dramatically, and perception is equally varied.
I mean, you're talking about a different thing than "job performance" here.
Job performance is a satisficing measure: you only need to get someone who's good enough to perform the duties you need of them. (Yes, even in software engineering.)
You're talking about ranking measures. Does it matter if someone is "the best" if they're still not good enough to do your job? Does it matter if someone is "the bottom of the barrel" if they are good enough to do your job? I would say no, in both cases.
IMHO, the hiring bar is way too high in most bigcorps; they care about vanity metrics about having "the best", when 100% of the work assigned to these hires could be easily done by people who are not, in fact, "the best."
The point of a job interview, in the abstract, is to filter out the candidates who aren't qualified to perform the job duties even after a few weeks of on-the-job training. This leaves you with a pool of people who are all qualified. At that point, you should either just hire one of them at random, or try to optimize for a second criterion, such as "is willing to take the lowest compensation to do the job" (which usually translates to "has the fewest formal qualifications to do the job, while still actually being qualified in practice.")