Should grading take all students' performance into account?
I'm going to give this from a student perspective, so take it with a grain of salt. But I can say that I would hope I was graded independently of any of my peers on a given assignment*. Simply put, I want to be evaluated on my progress relative to the course objectives. I'm not interested in my progress relative to everyone else's.



* That being said, once the independent grade is assigned, I don't care about or mind any post-grading corrections (a.k.a. "curves"). But again, that's after my exam is independently graded - so I can at least see the raw grade first.