In his 2001 op-ed, "Grade Inflation: It's Time to Face the Facts" in the Chronicle of Higher Education, Harvard Professor Harvey Mansfield issued a brutal criticism of the rampant practice of grade inflation.
...[A]t Harvard, the supposed pinnacle of American education, professors are quite satisfied to bestow outlandishly high grades upon students. We even think those grades reflect well on us; they show how popular we are with bright students. And so we are quite satisfied with ourselves, too.
There is something inappropriate -- almost sick -- in the spectacle of mature adults showering young people with unbelievable praise. We are flattering our students in our eagerness to get their good opinion. That our students are promising makes it worse, for promise made complacent is easily spoilt. What's more, professors who give easy grades gain just a fleeting popularity, salted with disdain. In later life, students will forget those professors; they will remember the ones who posed a challenge.
....Grade inflation compresses all grades at the top, making it difficult to discriminate the best from the very good, the very good from the good, the good from the mediocre. Surely a teacher wants to mark the few best students with a grade that distinguishes them from all the rest in the top quarter, but at Harvard that's not possible...
...The loss of the notion of average shows that professors today do not begin with their own criteria for the performance of students in their courses...With an eye to student course evaluations and confounded by the realization that they have somehow lost authority, professors begin from what they think students expect. American colleges used to set their own expectations. Now, increasingly, they react to student expectations -- even though, by contrast to stormy times in the past, students are very respectful. Thus another evil of grade inflation is the loss of faculty morale that it reveals.
Professor Mansfield has done his part to combat grade inflation in the Government Department at Harvard with his two-tiered grading system --he gives each student two grades, one that reflects his or her true performance in the class, and another inflated grade that gets submitted to the registrar. However, new data compiled by Stuart Rojstaczer and Christopher Healy (via Catherine Rampell at Economix Blog) shows that the problem of grade inflation today is more widespread than ever.
In this first chart which shows the distribution of letter grades at all American colleges over time, you'll see that 43% of grades awarded are A's and an additional 34% of grades are B's. If we are to understand that a C represents average performance, the data suggests that 77% of students perform above average -- by definition, a mathematical impossibility!
This second chart illustrates that the problem exists at both public and private institutions, but that the problem is much more severe at private colleges and universities.
In the past, I've mocked those schools like the University of California, Santa Cruz that have done away with letter grades in favor of written evaluations. But if letter grades no longer convey information to future employers or grad schools anyway, maybe there's something to be said for throwing letter grades out the window.