Computing Grades

When I taught freshman calculus recently, I gave three hour exams plus homework and a final exam.

Here are the raw hour exam scores. To preserve privacy, I used names like "S27" for the students.

  Exam 1 Exam 2 Exam3
average 75.3 55.9 67.6
std deviation 14.6 12.8 18.5

Histograms add insight:

Exam 1.gif Exam 2.gif Exam 3.gif
Exam 1Exam 2Exam 3

The grades of student "S40" are: 85   76   77 so her lowest exam score was on the 2nd hour exam. She noted that that the 2nd hour exam was the most difficult yet her score was one of the highest grades in the class. It seems both incorrect and unfair not to take that into consideration in computing her course average.
Can you devise some better way to compute course averages?

In another course, to compute the final course grade, I told the class I would drop the lowest score from their hour exams. Thus, I would be counting only the two best hour exams. Say we do this with this class' exam grades.
Again, student "S40" might note that since the 2nd hour exam was the most difficult, and her grade was one of the highest in the class, it seems both incorrect and unfair to drop her score of 76. Can anything useful be done to resolve this?