The TKD school my son attends has an unusual approach to testing. The forms, techniques, sparring, etc. necessary for each level are made clear and are posted on the wall, and testing is done on the first Saturday of each month. When the student feels ready he is encouraged to test, but is told to be prepared to fail if he doesn't perform at or above the standard.
Now at this school, monthly tuition is not cheap, but tests are only $5 (the cost of the belt) and if you fail, you can re-test for free the following month or later. Consequently, it is not uncommon for students to fail. There is no shaming, just confronting the fact that they are not yet ready to move up. They are then told exactly what needs work, and have another chance to re-test get it right.