I interview for my company, too, and don't ask these kinds of algorithm questions because the reality is these problems aren't typical of day-to-day work for the positions we are hiring for.
I'm interested to know what your interview process is. If you wouldn't mind sharing, how does the interview process work at your company?
We have the candidate sit at a workstation and write a functioning program to solve a relatively realistic but self-contained problem using the language of their choice. It usually involves extracting and working with some data from a few big CSV files -- we have pretty legitimate datasets set aside just for the interview. There really aren't any restrictions during this: the candidate can use any resources they would normally use, including Google or Stack Overflow.
We don't have the interviewer watch everything they're doing over their shoulder. They're allowed to just work on the problem on their own.
I'm interested to know what your interview process is. If you wouldn't mind sharing, how does the interview process work at your company?