I have an issue with this thinking, but I don't mean to pick on you...it's common within organizational politics.

Managers suggest that an employee must "go above and beyond" their ordinary duties to get an exceptional rating.

But that just means that "going above and beyond" is, in fact, a duty. The problem is it's an ill-defined duty which is even more susceptible to the whims of what the manager thinks counts as "above and beyond." Good managers give clear rubrics of performance.

To me, "meets expectations" says that the employee's error rate was at acceptable levels and "exceptional" means they had almost no errors whatsoever.