I was discussing martial arts schools belt tests with someone yesterday. This parent said that her children took martial arts, but she was very concerned by one fact - you can't fail the tests. If you're up for a belt promotion, and pay the (steep) belt fee, you pass. No one ever fails.
They put limits on how fast you can rise, of course. You can't get promoted more than X times a year, and the rate slows down as you go up in rank.
But you can clearly see the concern here - if you never fail, there is no value in success, either. There isn't any differentiation between success and failure. Why try hard when not trying gets the same results?
I've filed this under motivation, but it's really demotivation. There is significant value in just showing up, but martial arts schools can sometimes take it too far. If the only value is just showing up, you teach kids not to try, just to arrive. Ironically, by preventing them from ever failing, you set them up to never succeed.