i think if a teacher knows their students, they will already know what level a student is at. actually taking the grading is a formality, a teacher has usually made up their mind whether a student will be given a grade, before they even start.
also, in my experience, teachers won't always make a student grade if they think they will fail, and it will demotivate them. however, some students need to be failed, in order to give them motivation.
where i study, we are pretty much told whether we will grade or not
it would be interesting to know whether other teachers do this also (maybe this should be a separate thread?)