If these things are not written down as policy then perhaps it is time to do so. If a policy is clearly defined then all would have to be held accountable to it. Perhaps the manager is just going by his own personal feelings on the issue instead of a clearly defined policy? If this is not acceptable then that is the issue which needs to be addressed I would think.
Personally I think it is a little hard to have all involved factors enclosed in a policy. When you think about promoting someone, there are some non-easily-measurable aspects, such as leadership, attitude, proactiveness , etc…
Saying that someone “exceeds the expectations” is sometimes a little subjective for some types of jobs, and IMO it needs to depend on someone’s personal criteria to some degree.
Some things are measurable, and of course needs to be taken into consideration, but I think that a promotion decision involves some other things.
Maybe this decision should be taken by the manager in conjunction with the test lead (in this specific case) or someone who has a more direct relation to the engineer that is going to be promoted.