Though I agree that the system proposed by the independent that you've sited is unfair I think at some point a tough decision of "best of a bad lot" needs to be taken. You can never satisfy everyone and systems are very rarely truly "fair". After all, life's not fair so you're starting from an unfair starting point whatever you do!
As to what the "best of a bad lot" is, I'm not too sure. It would take a bit too much time and effort for me to work out my answer and at the moment I can't really affect the policy unfortunately. As far as PhDs go I don't think the system is broken. It just perhaps needs a tweak like more post docs and less PhDs.
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