Differential grading is an assessment method where students are evaluated based on their individual performance and progress rather than a standard grading scale. This approach allows educators to consider each student's unique circumstances, learning styles, and abilities, promoting a more personalized learning experience. In differential grading, teachers may use various criteria, such as effort, improvement, and mastery of specific skills, to assign grades. This method aims to encourage students to focus on their personal growth and understanding of the material, rather than merely competing against their peers for a fixed grade.