[MarkCole]

I don't see that this solves any problem in the interview process.

This would just incentivize people who aren't going to take the job to apply. People would specifically apply to interviews just for the money with no intention of ever taking it. There would probably even be people who are wholly unqualified who would study and fake resumes etc just to make money from turning up.

On the other hand, I do believe that doing any work after an interview should be compensated in some way, even more so if they plan to actually use the work product for something. Travel to/from an interview should also be compensated in my opinion.