I agree with most of what you are saying but not with your "no fail" policies. I have ran many courses and we have no problem failing people. The problem I have seen is sometimes we get non-permanent staff and they do not have the experience so don't know what to look for when they are assessing so end up not noticing mistakes. Happens a lot in the defensive, or the other problem is when you have lazy staff that don't want to do paperwork. If you fail a candidate it requires more paperwork than if you pass him, so some staff have passed them with low marks instead of failing them so they can relax earlier.
Ok, well that's your experience, but i can tell you, for absolute certainty, that "no fail" policies have existed in LFCATC. Instructors were told that if a candidate failed, then it was a leadership failure, and you failed to "mentor" that individual through the item he was having difficulty with, and therefore the candidate wasn't culpable. We were told that if, for example, he failed to state the mission statement in orders, then he was to be "mentored" until he got it, and then carry on (i'm not making this up). They literally did not let us fail anyone. Any failure of a candidate on any item was to be corrected on the spot before the assessment continued. There was even one case where the OC took an assessment guide from a failed section attack behind closed doors, without the instructor, and arbitrarily moved checkmarks out of the ineffective column into the effective column based on poor handwriting, not enough commentary, "disagreed" with certain points (about a section attack he did not observe).
We were told in no uncertain terms that nobody was to fail. It wasn't even sugar-coated. The only person who didn't pass that course was one individual who failed every attempt at every PO (except his 3rd or 4th attempts where he walked through his hard assessed by the hand by the instructors), and quit by refusing a 4th attempt at his recce patrol, and said to the OC that he'd rather go home, because he didn't want to go to leadership school in the first place - his unit just sent him there, and he didn't know where he was going or what he was doing.
I don't know how it is now, but I'm telling you, a couple summers back, there was a no-fail policy. I was there man!
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...oh, and then they all got promoted by their units on the grad parade.