Teachers and administrators at Health Sciences High and Middle College in San Diego, California, wanted to create a grading system that reflected understanding while still encouraging students to practice. They developed course competencies, or performance assessments, that teachers use to measure what students know and can do with the concepts they've been taught. Competencies comprise such activities as oral presentations, projects, performances, and writing. The faculty voted that practice work would not contribute to students' grades, but rather that grades would be based entirely on students' demonstration of understanding as measured by the performance assessments. As a result, homework completion rates, grade point averages, and the pass rate on the high school exit exam have all substantially improved. (Contains 1 figure.)