However, Mr Hensman said it had resulted in some distortions in terms of learning, with students choosing subjects based on how easy they are to achieve the credits they require to pass NCEA Level 2.
"Anecdotally, it seems that many students give up when they achieve the minimum credits required, so while NCEA is succeeding in generating external motivation in students, it seems to be at the expense of internal motivation and may undermine the joy of learning.
"Principals are not opposed to NCEA but we are giving serious thought to how to make the best of it without these unintended consequences."
The assessment system, which affects about 170,000 students nationwide ran into difficulty last year when students were forced to sit NCEA exams despite being affected by a 7.5 magnitude earthquake, which had been felt by most of the country.
That was followed by exam mistakes, particularly in mathematics papers, across all levels.
Ministry of Education Head of Early Learning and Student Achievement Karl Le Quesne said their vision for education in New Zealand was that all students were able to reach their full potential, regardless of ethnicity or socio-economic status.
"One of the ways we have made solid progress is through NCEA, which offers a broader range of achievement options for students.
"We know there is an achievement gap between Maori, Pasifika and lower-decile students and those from other ethnicities and high-decile schools.
"We are working hard to address this and are increasingly seeing results, in particular through NCEA achievement results," Mr Le Quesne said.
Latest ministry figures showed 75.4 per cent of Maori 18-year-olds in Hawke's Bay and Tairawhiti were gaining NCEA Level 2 - a vast improvement on 60.9 per cent in 2011.
"What we have found is that the flexibility of NCEA, alongside innovative learning programmes such as Trades Academies, and practical support initiatives focusing on individual students at risk of not achieving, are engaging young people who would previously not have achieved NCEA Level 2."
In regards to teacher and student workloads, Mr Le Quesne noted that the New Zealand Council for Educational Research (NZCER) published a survey last year that showed support for NCEA was stable, perceptions about its credibility in the wider community had continued to improve and recognition that NCEA could help with inclusion had increased.
In the survey, fewer teachers reported workload concerns than previously documented, showing that teachers were attending to students' pathways choices and were looking to NCEA's flexibility to help design courses that met most students' needs.
Mr Le Quesne said NCEA assessment was contributing to teacher workload.
Havelock North High School principal Greg Fenton said he agreed with Mr Hensman's comments.
"I am certainly of the opinion that the NCEA system is a better form of educational assessment than the old School Certificate and University Entrance models, but there is a price to pay, and teachers workloads and the student stress associated with ongoing assessment is that price," Mr Fenton said.
Outgoing Hastings Girls' High School principal Geraldine Travers also endorsed Mr Hensman's comments, with one proviso.
"Anecdotally I believe the issue with students giving up once they have reached the required number of credits is a boy issue," Mrs Travers said.
"Girls are much more likely to continue to want to gain every credit available."
"We do, however, see some girls being really discriminating about external credits as they are really conscious of their grade point averages and won't engage with an assessment which is likely to lower that," she said.
A Wellington-based education expert believed students needed to be better equipped to excel in exams to help avoid disappointment.
William Guzzo, general manager of high school tutoring company Inspiration Education, said "schools are doing a good job of teaching the curriculum but there's more to succeeding in exams than just knowing the subject".
"Time and time again, we get new students coming to us for help, in tears about their exams results. They've all been let down not by a lack of subject knowledge, but by a lack of exam strategy," Mr Guzzo said.
That lack of strategy, he said, was due to schools not having the time and resources to teach students good exam execution.
Mr Hensman said he was feeling positive for the year ahead, with NCEA results steadily improving year by year and the region producing a surprisingly high proportion of scholarship passes.
