I have interviewed over 100 candidates for my current company, thereby participated in post-interview meetings hearing other interviewers views on the candidate. I definitely feel that the selection process would fail many of the current, even some high-performing, employees.
I have no data-points for Google, but do recall an open aptitude test they had made available with a few problems so challenging that I felt nearly 100% sure that many of the current Google employees could not solve. Folks from Wolfram Research (the company behind wolfram-alpha) showed how to solve the problems [1] using Mathematica, their flagship product. (Turns out Google themselves had one of things incorrect!)
I have no data-points for Google, but do recall an open aptitude test they had made available with a few problems so challenging that I felt nearly 100% sure that many of the current Google employees could not solve. Folks from Wolfram Research (the company behind wolfram-alpha) showed how to solve the problems [1] using Mathematica, their flagship product. (Turns out Google themselves had one of things incorrect!)
[1] http://mathworld.wolfram.com/news/2004-10-13/google/