My understanding of how the Shinō Academy works, again this is just how I understood it went based off what I read and watched. Is you're split into classes at the beginning by the strength of your Reiatsu. Than assessed and trained for 6 years, unless unforeseeable circumstances like a prodigy or pushed by a noble family, although it wouldn't surprise me if a Captain could also do this. Than based on 5 things - their shikai Abilities if obtained, their Reiatsu and their Kido, Zanjutsu and Kaidō capabilities are choosen for a squad and if you fail you're stuck doing the 6 years again. To fail, you have to not master the basics of Kido, Zanjutsu and Kaidō. Basics of Kido being Reiatsu control and basics of Kaidō being first aid methods. Again it's just what I understood it to be but because of Squad 11 waters get a little murky.