How to grade students' lab worksheets to prepare them for a final lab exam?
While I don't TA physics, but Geology, our labs tend to have the same structure. Luckily the labs are small enough that I can get to know the groups ect, So I can determine how hard they are working on the labs ect, so I generally grade 70% effort and 30% correctness. The difference is though, that you are teaching engineering majors, where I tend to teach non geology or STEM majors. Getting something in the lab 100% correct for my students isn't as important and following the scientific process, but, for a class of engineers, I would have higher expectations since the content they are learning is helpful for their careers later. IE, they should have a vested interest beyond the grade. 

My experience with the Lab exams is that the students either do very well or very poorly. I would be somewhat lax on the labs, especially on first time mistakes. But there isn't much you can do if they aren't working hard and aren't completing the labs correctly and they will likely fail the test if thats the case anyway.