Why These Ridiculous Academic Examinations ?

Reading time: 40 sec
Whenever there is a situation where a person has no fear of making mistakes, then he will do his best. In an examination/viva hall generally, people will have a fear of making mistakes due to obvious reasons (They may get low grades for their poor performance.  And society demotivates people with low grades). So why these teachers/professors are expecting students to do their best in such situations? In other words, since students can’t express their full potential in examinations, why do we even need such systems?