Perhaps classes on ability necessary to the sport should be the only way to go?
Bob is the winner of the #1 division, Amy is the winner of the #2 division, and so on.
All the tuples of athletes who tied get to be in one class; e.g. if three people crossed the 10,000 meter finish at 29:13, they are in that ability class together, tying for that class' first place. :)
:)
Then you end up with perverse incentives. The #1 person in the 2nd division doesn't really want to work harder to move up to the 1st division, because they're likely to never get beyond 10th or 9th or so. And the 10th place holder in the 1st division might find it more prestigious to slow down a little to try to take the #1 spot of the 2nd division.