Norm reference grading compares a student's performance to others in the class, ranking them based on achievement levels. It is easy for instructors to use and works well for differentiating students, though a student's grade depends on others' performance as well. Criterion reference grading compares a student's performance to specified standards rather than other students. It is more likely to encourage collaboration, though standards can be difficult to set and often resemble norm reference systems. Both approaches provide examples of grading scales that divide students into performance levels based on percentages or score ranges.