Course Evaluation Instruments (CEIs) are critical aspects of faculty assessment and evaluation across most higher education institutions, but heated debates surround the value and validity of such instruments. While some argue that CEI scores are valid measures of course and instructor quality, others argue that faculty members can game the system, most notably with lenient grading practices to achieve higher student ratings. This article synthesizes the literature on course evaluation instruments as they relate to student grades to assess the evidence supporting and refuting the major theoretical frameworks (i.e. leniency hypothesis and validity hypothesis), explores the implications of research design and methods and proposes practical recommendations for colleges and universities. This paper also goes beyond the CEI-grade relationship and provides a framework that illustrates the relationships between teaching quality and CEI scores, and the potential confounding factors and omitted variables which may significantly deteriorate the informativeness of the CEI score.