Let me explain how schools work where I come from. The final year of high school is spent largely doing a series of examinations standardized across the state, called the Higher School Certificate. (It's a bit more complicated than that, there's a school-based contribution to the exams which gets normalized with another set of exams, but let's just pretend it's one big set of exams now, which tests everything you learn in your last two years of school.) The marks are all tallied up, and every student in the state recieves a grade between 0 and 100 which ranks exactly how well they did in their exams (if you get 95.4 then you did better than 95.4% of the state, et cetera). These numbers (called Tertiary Entrance Rankings when I went through, though I think they've changed name several times since then) determine what courses and universities you can get into (none of this namby-pamby admissions essay slash extracurricular bullshit stuff like in the US)... or for those who don't go to university it will be a major line item on your CV when you start looking for work, so obviously all students are very keen on making sure they get a high TER. This provides an obvious point for competition between schools -- schools will compete between themselves to get the largest number of high TERs, and parents choosing schools for their children will look at this information when choosing schools.

It's heartless, and it's cut-throat, and it's incredibly stressful for the students, and it works great.