Grades are measures used to rate student progress in areas of academic achievement. Grades serve several purposes, but their primary objective is to communicate about students’ progress and status in achieving learning goals. Assigning grades is an inherently comparative process. To make these decisions, instructors may compare a student’s performance with that of a peer group (norm referencing), with a standard or criterion (criterion referencing), or with the student’s earlier performance (self-referencing). When assigning grades, teachers may also consider other factors than achievement alone, such as effort, attendance, and improvement. These practices may diminish the power of grades to accurately report students’ progress in learning material and can be a factor in grade inflation. Grade inflation represents the tendency to give increasingly higher grades over time unaccompanied by corresponding increases in student achievement. In the United States, increasingly higher grades have been awarded across secondary and postsecondary institutions in recent decades. A number of causes exist for this recent rise in grades, including changes in teachers’ attitudes toward assessment, changes in students’ attitudes toward education, and changes in institutional practices and priorities. While grade inflation has a number of consequences for both students and teachers, one of its most serious effects is that it gives students a false impression of their abilities and makes it more difficult to discern excellent performance.