Active member of the PTA here in a small school. Makes sod all difference.
Primary school is not a meritocracy. It's just the way that it is. At our school it's about whether your parents went to that school, live in the village and are chummy with the staff as to "favoured jobs" and awards are given to those kids who need the motivational boost / encouragement.
Both kids are academic / top of the class. Our schools do badges and certificates. It took my eldest DD, only free reader in the class at the time, 3 years to get a reading award. She has maybe one badge a year - they give two out a week. She's engaged in school life - school council, orchestra, choir, chess club, netball team.
It bothers her. And she makes comments like "well it's not my fault I don't need to try hard" and "I know X or Y needs the encouragement" with a weary sigh. So they get it. And are exasperated by it.
What's frustrating is that sports at our school ARE based on ability. So you could win 50 awards for sports prowess and be in the newsletter every week. But you wouldn't get the same if you shine academically.
Personally I couldn't care less. It WILL come good and it's about keeping the kids engaged and challenged until then. I also don't care if they don't get a reading certificate out of a class of 20. What matters is how they'll compare in a global setting of 10 million kids.
It's all resilience. The kids will take their cues from you. So if you don't show you are bothered, neither will they.