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Every year, millions of students receive grades that reportedly measure their learning. And every year, these same grades fail spectacularly at their intended purpose while actively killing learning. 

Despite plenty of research about the ill effects of traditional grading, we cling to this system with remarkable stubbornness, like a company still using punch cards in the age of cloud computing.

Why? 

Mainly because grades are easy to give out and easy to understand. Or at least they seem to be. 

An A means excellent, an F means failing. 

What could be simpler? 

But this simplicity is precisely the problem. Learning isn’t simple, and pretending it is creates more harm than we realize.

The industrial hangover

Our grading system is a relic of the industrial age, designed when schools needed to process large numbers of students efficiently. Letter grades provided standardization and scalability – the educational equivalent of the assembly line. 

While this made sense for mass education in an industrial economy, it’s strikingly misaligned with today’s needs for creativity, critical thinking, and collaboration.

Consider two fundamental problems with this inheritance:

• Grading systems treat academic success as a limited resource where only some students can excel, when in fact learning and understanding don’t need to be restricted this way
• They reduce complex learning into oversimplified numbers that hide more than they reveal

The motivation murderer

Research consistently shows that grading undermines intrinsic motivation and learning quality. Multiple studies by Deci and Ryan demonstrate that external rewards, including grades, reliably decrease students’ interest in learning for its own sake. 

Butler’s research found that students who received only comments on their work showed more improvement and engagement than those who received either grades alone or grades with comments.

This plays out in predictable ways:

• Students choose easier tasks to ensure better grades
• They avoid intellectual risks
• They focus on what will be tested rather than true understanding and what interests them
• They compete rather than collaborate

The evidence is overwhelming. Educational psychologists have found that when students focus on grades:

• Their creativity diminishes
• Their preference for challenging tasks decreases
• Their interest in the subject matter declines
• Their quality of thinking deteriorates

“Is this on the test?” syndrome

Walk into any classroom today and you’ll hear the same questions:

• “Is this going to be on the test?”
• “Do we need to know this for the exam?”
• “Which courses are the easy A’s?”

These aren’t the questions of engaged learners.

They’re the questions of grade optimizers.

Of course, you can’t blame students. Like all people and organizations, they respond to incentives.

Research by Black & Wiliam shows that when students are focused on grades, they’re less likely to:

• Ask deep, conceptual questions
• Explore topics beyond the curriculum
• Take on challenging material
• Engage in creative problem-solving

The cumulative deficit trap

Perhaps the most insidious effect of grades is how they create and amplify learning gaps. 

Here’s a simple example:

• A student learns multiplication but doesn’t fully grasp that 7 x 8 = 56.
• They memorize it for the test and get 80% overall.
• The class moves on to area calculations.
• Now they’re trying to find the area of a 7 by 8 rectangle while still shaky on the underlying multiplication.
• They manage 70% through memorization of recipes (formulas) and test-taking strategies.
• Then comes the topic of volume. 

Each topic builds on increasingly unstable foundations.

And the cumulative deficit grows.

The result is 2 of 3 students being disengaged in school. Perhaps just as bad, students begin to negatively label themselves and close themselves off from critical numeracy and literacy skills, i.e. “I’m not a math person” or “I’m not into reading”.

Instead of actually learning, they just fight for academic survival. 

The grade disguises the gap while simultaneously ensuring it grows larger.

The real world disconnect

The grading system doesn’t just fail in an academic setting. 

It also fails to prepare students for actual workplace challenges in several critical ways:

Real World Reality vs. Grading System:

• Collaboration is essential vs. Grades promote competition
• Problems are open-ended vs. Tests have clear right answers
• Feedback is ongoing and qualitative vs. Grades are periodic and quantitative
• Success comes from iteration and improvement vs. Grades are often final and fixed
• Innovation requires risk-taking vs. Grades punish mistakes

Research by Gardner and others shows that the skills most valued by employers, i.e,, creativity, adaptability, collaboration, and problem-solving, are precisely the ones diminished by traditional grading systems.

A conversation with entrepreneurial force Gary Vaynerchuk highlights the disconnect beautifully.

Vaynerchuk is a master communicator yet his high school grades reveal the following:

• D in Speech
• D in English
• F in German
• D in Algebra
• A in Physical Education

About his grades, Vaynerchuk says:

A lot of data in the world is dirty. It’s fake. Grades are not a tremendous indicator of what is going to happen.

Why schools resist change

Schools cling to grades because:

• They’re efficient to produce
• They provide clear metrics for administrators
• They can be gamed
• They facilitate standardized testing
• They’re familiar to parents

But efficiency shouldn’t trump effectiveness. 

Studies of grade-free schools show their graduates are often more motivated, more creative, and better prepared for college than their traditionally-graded peers.

Grade inflation: The final absurdity

Even as grades fail at their intended purpose, they’ve become increasingly meaningless through inflation. Research shows the percentage of A grades has increased from 15% to over 45% in recent decades, while measures of actual learning have remained flat or declined.

At Harvard, 79% of grades are now A’s.

Moving forward

The solution isn’t to tweak the grading system but to fundamentally rethink assessment. Some promising alternatives include:

• Mastery-based progression
• Portfolio assessment
• Narrative evaluation
• Student self-assessment
• Qualitative feedback systems

But those solutions deserve their own discussion which I’ll write more about later as we think about the model we’ll employ at the Schools of Entrepreneuring. 

For now, we need to acknowledge that our grading system isn’t just imperfect – it’s actively harmful to learning. We’re using a system that demonstrably reduces creativity, dampens motivation, promotes shallow learning, and fails to prepare students for real-world challenges thus weakening our collective future.

The real question isn’t whether to move beyond grades, but how quickly we can replace them with approaches that respect learners’ curiosity and potential.

Adopting them will require reevaluating entrenched habits and accepting that efficiency at the expense of true understanding is no longer tenable.The reality is that grades have served their purpose and run their course. Now it’s time to build an education system that inspires, supports, and reflects real learning. A system that prioritizes mastery over marks and skills over scores.

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If you read this far, some related essays you’ll also like:

1. The Great Disengagement: America’s students have checked out
2. Degrees of deception: How America’s universities became debt factories
3. Bread, circuses and education
4. The School of Entrepreneuring
5. From myth to measurement: Rethinking US News & World Report College Rankings
6. The perverse incentives driving America’s government schools
7. The endless ladder
8. Students are solving the wrong problems
9. Your kids grades are bullshit
10. Ghost nonprofits and the manufacturing of virtue