I tend to tell the programmers what I want the system to do VERY rough (I have A, I need B, figure it out)
Then I ask them to write the specs, then I review it
Then I ask them to make the flow charts and the pseudo code.
Then I ask them to design the database structure.
After that I ask them to write the code.
This way I can weed out the people that can't come up with a solution fairly fast or can't work independent.
This may not be the best solution for everyone, but having a smaller company with only 4 programmers this appears to be the most efficient way for us
This probably wouldn't work on a freelance / project basis as they are usually dealt with on an agreed price rather than per hour and they are usually not in-house.
P.S. reason to ask developers to write specs is to show that they fully understand the assignment