Purely for the purposes of playing devil's advocate - I have colleagues now who do not pull their weight, but want their name included on things. In fact, I suspect most everyone deals with this at some point in their career (industry or academia). Doesn't this kind of mixed group simulate and therefore prepare them for real life?

As for my own personal take - I attempted to get around the terror of group work while still reaping the benefits of it. I do require group work especially for design labs. However, as part of their grade, each student has to rank the contributions of each of their lab members and then justify their score with a few short bullets on what they physically did. They also have to self-grade their own contributions and justify.

These evals count for 25% of their grade for the design lab. I reserve the right to revoke any grade (up or down) if I do not think it matches reality since these design labs go for 2-3 weeks, I watch them in the lab, and I get a short weekly check-in from each group about where they are. If one student winds up pulling the weight of the rest of the group week after week, their grade will be significantly higher than their teammates.