Do Grades Matter?

In working with my students, I've been struggling with whether or not to give grades.  Since I can look up the opinions on either side of the argument and get no where I would rather use this time to reflect on my own experiences with students in my class.  We have just completed a project where students had the opportunity to create scale models of various objects.  For a project like this, there was a posed hypothesis by a colleague saying that there won't be any way of predicting who will actually complete the project because some "A-Students" will not turn anything in, and others who do not perform academically will blossom with such a project.

Well our project was due this past week and sure enough, there was a wide range of achievements.  Some students brought in fantastic projects and others brought in projects thrown together at the last minute.  The surprising thing was that the students' achievement had no correlation with their current grades in the class.  The lowest grades in the class did turn in projects and some work.  Other students who had solid grades did not turn anything in, and every combination of the possible grades and progress on the project seemed to manifest itself.