Well, where I used to work 'twas all pretty simple.
If the student didn't follow the Master Progress Plotter, MPP (grade sheet) he'd get an overall grade of "U" (Unable/Unsafe). A few of these and it's off to the evaluation board, EVB, which would either kick him/her out or allow him/her to continue, perhaps on Special Monitoring Status, SMS.
Explain the required standards, grade consistently and let the student what is expected for each sortie. Then it's not just you being an ass when the student doesn't perform; 'cause it's all there in the MPP. A "good" was required; you performed to a "Fair" or "Unable"; sorry, but you're not what we're lookin' for, Mack.
As an Instructor Pilot you're responsible for the future passengers of this aspiring pilot. Make sure you're not going to second-guess your actions when he /she ends up being responsible for the deaths of 200-some souls!