Students who did poorly on the final exam There are a handful of students in my course who came to class, did acceptably well on the midterm, and contributed to the (group) assignments, but did poorly on the final exam. The exam was a combination of multiple choice and long-answer "problem solving" questions. The class is heavily applied and has a strong emphasis on team project work but there was also a 50% exam component.

These students were surprised that they did so poorly in the course.

Is this an indication of a poor exam or poor instruction on my part? Is there something that I can do throughout my course to avoid this situation in the future?

Some articles (ex: http://chronicle.com/article/Stop-Telling-Students-to-Study/131622) advocate moving away from summative evaluations altogether for example.
Apart from the natural response of blaming someone else for one's shortcomings (as students often do), it is difficult to see where the problem may lie. I have studied under a summative system and always found my grades were very clear and understandable to me, particularly if I understood why answers were graded as they were. Now I usually did not question someone's judgement unless I felt it was absolutely necessary.

Now, many years later, I am teaching in a system where courses are set up with learning objectives. At first I found this quite strenuous since each objective must be underpinned by clear grading criteria for each of the grades A-E and F. Note that the major difference is that the learning objectives means you do not grade on a curve but in terms of how students fulfill the goals.

Working with goal oriented criteria demands a lot from the teacher in first setting up the appropriate goals and then to make sensible criteria for how to judge fulfilling them. At first it seems tempting to describe the fulfillment as good, better, much better and outstandingly good or something of that sort but the point is to pinpoint what characterizes the standard for the specific grade. Since many criteria make up a final grade one must also explain the ways in which the different criteria are weighted together but that is a only a minor problem reminiscent of the summative system.

What I have found in the end is that not only should the criteria give the students better ways to understand where they stand but they actually provide me with more fuel to explain why they got the result they did. I now have a thought-through list of arguments for a specific grade which is not relative to others but relating to a set of goals and how to fulfill them.

If this is manageable everywhere is beyond my horizon to speculate on but I must say that after battling with the system (after it was imposed on us) I have found that it actually works in my favour—and hopefully also the students'). It makes the grading transparent. It is also possible to stake out issues that may reduce grades such as spelling errors in essays or missing labels in graphs or whatever details may matter.

Now so far this concerned the setup of the course in terms of grading. It is of course necessary to also add structure to a class that forces students to work with the new knowledge during the course. This could of course be any activity that makes students read the literature and reflect on its content. As an undergraduate I was in a system where studying was mainly done during a few 24-hour days before the exam. Once it was passed most was forgotten. As a graduate student I was in a system with lots of homework and other activities and I found that I really did not have to study that hard for the exam. So activities may play a role to help students reflect on the material. Exactly what activities can and should be used depends on the subject but the main objective should be to have students digest and reflect on the material. 

A final issue concerns examination. Does the examination reflect the type of knowledge in the course? This is a big question and one which needs thought. There are many alternative ways of examining apart from written exams and since I hate correcting exams I try to test other ways. Again, what works depends on the type of course but look into other ways of examining the course to see if that will help.

I do not know if this is helpful as an attempt to answer your question but the topic of learning outcomes is difficult and whereas the learning at university level really IS the student's responsibility, it is the learning activities and assessments we make that can help them reach results.