As a comparison as to how things "can" be done in a more fun/fair way, when my son had compulsory music lessons in years 7 and 8 at secondary school, the year end "test" included a compulsory music performance, of playing an instrument for a couple of minutes.
Obviously, grossly unfair for pupils who'd never actually had formal music lessons in playing an instrument to be marked against those who could play at a good level because of prior lessons/practice.
So during the year, the teacher had learned which pupils played which instruments (if any) or had lessons etc., just by chatting, asking questions, "hands up" if you play guitar etc etc.
When it came to the year end test, they were told they couldn't play an instrument that they'd had formal lessons for!
Result was an even playing field. Obviously those who'd had lessons in something were better at reading music, timing, etc., and no doubt some would have played previously but not admitted it, etc. But generally it meant a kid who'd never even played a recorder wasn't competing against some guitar solo genius who could play as well as The Shadows because he'd had private lessons since the age of 18 months!!
The final "performances" were apparently great fun, with the pupils all enjoying it, lots of pupils playing "London's Burning" on the recorder apparently! The teachers marked them on various criteria, such as getting timing right, or reading the music right, etc., not just the end quality of the piece. They also marked on progress made as the teachers had listened to them all practicing a week or two before to gauge the improvement! Our DS said everyone enjoyed it, and that the marking was generally considered to have been fairer, and more importantly, there was no bullying or humiliation for the worst as none of them stood out as being particularly brilliant!