The field of education is moving rapidly toward a standards-based approach to grading. School leaders have become increasingly aware of the tremendous variation that exists in grading practices, even among teachers of the same courses in the same department in the same school. Consequently, students' grades often have little relation to their performance on state assessments--an issue that has education leaders and parents alike concerned. Effective grading reform requires four steps. Although each step addresses a different aspect of grading and reporting, all of the steps are related. Together, the four steps are the foundation of grading policies and practices that are fair, meaningful, educationally sound, and beneficial to students. They include: (1) Be Clear About the Purpose; (2) Use Multiple Grades; (3) Change Procedures for Selecting the Class Valedictorian and Eliminate Class Rank; and (4) Give Honest, Accurate, and Meaningful Grades. (Contains 1 figure.)