I think - this is just me, mind you - that interviews are the best way of weeding out really bright kids from pretenders. It means you can't hide behind any words and have to rely on who you actually are. Although, granted, that's not quite as efficient.
On the other hand, if you make school optional and create a culture of liking or perceiving as essential to attend school for one's well-being, then motivation is way different, and grading is then really an impediment.