Though many would like to see a de-emphasis on grades in American higher education, three major reasons prevent this: student motivation, student perception, and the nature of American society. Students need extrinsic motivation and grades are the most effective of all student motivational tools. In addition, as evaluation is always oriented toward goals, grades act as goals for students. Students perceive grades as a reward for diligence. This reflects American society's promotion of competition in all aspects of life. Parents also place high value on grades. In addition, students are prone to judge each other and themselves on the basis of grades. Many employers use grades to evaluate and select students for jobs. Even driver insurance policies often have deductions for students with high grade point averages. Competition and reward is America. It is clear that America is an individualistic society where competition is encouraged. A society's educational system is most effective when it complements social perspectives. Educational institutions that wish to prepare students for success must consider social attitudes and philosophies. Consequently, instead of finding ways to de-emphasize grades, teachers should find ways to improve grading methods. (Contains 10 references.) (JB)