This report examines grading practices, the uses of grades and the influence of grades on the student, faculty, administration and society. The author also indicates how grading practices can be and are being altered to provide an educational tool that accurately reflects the many dimensions of student performance. It is noted that grades seem unnecessary for many of the administrative purposes within an institution, other than as an indicator that a certain course has been passed by a student. Furthermore, selection for academic awards, honor programs or special classes could be based on faculty nominations supplemented by evaluative information provided by the faculty. It is concluded that more varied and effective grading procedures are available; however, that they are seldom employed may be caused by the uncertainty over what is really wanted of grades. In light of this, the components and structure of grades need closer scrutiny so that the issues raised by the grading process--involving, as they do, all levels of society--can be dealt with. (WVM)