In the dojo I go to, we aren't allowed to grade until we have the minimum amount of time since last grading AND also the minimum amount of attended classes since last grading. Only then are you allowed to give it a try. Of course, you don't pass unless sensei thinks you have what it takes...
Usually, people pass.
I think this method is good. I've seen clubs where students have 3:kyu, and (imho) they do not have the skill one would expect from that rank.