Scholarship of Application. Background: Capstone courses constitute the culminating experience in engineering curricula. A core characteristic is the student team and project-based nature, with many team deliverables. The ensuing difficulty is to fairly assess the individual team member's contribution toward the team effort. Contribution: The method presented here is based on weekly peer evaluation of the individual team member's contribution, which subsequently yields a participation factor (PF), in turn scaling the team grade in accordance with the individual student performance. Intended Outcome: This method allows the timely adjustment of the individual student effort to match the group expectations and rewards high-performing students by making higher individual grades than the team average possible, while penalizing underperforming free riders by not benefiting from other student's performance. Application Design: The method allows students to continuously calibrate their own and their teammate's expectations and improve their peer score by adjusting their individual efforts. This feedback also requires students to practice professional communication, and in particular giving and receiving critical feedback, and thus is highly aligned with industry needs. Findings: Results evaluated over three iterations of the assessment process indicate a weak positive correlation (0.26) of the peer evaluation with the individual instructor-graded deliverables as well as the individual student grade point average (GPA, 0.23). Further, survey-based data indicate student agreement that the PF is a fair reflection of the individual performance, and a neutral perceived overall assessment system effectiveness, with reported primary barriers being the difficulty in assigning fair peer grades and of open, critical discussion.