Why do grades and test scores often differ? A framework of possible differences is proposed in this article. An approximation of the framework was tested with data on 8,454 high school seniors from the National Education Longitudinal Study. Individual and group differences in grade versus test performance were substantially reduced by focusing the two measures on similar academic subjects, correcting for grading variations and unreliability, and adding teacher ratings and other information about students. Concurrent prediction of high school average was thus increased from 0.62 to 0.90; differential prediction in eight subgroups was reduced to 0.02 letter‐grades. Grading variation was a major source of discrepancy between grades and test scores. Other major sources were teacher ratings and Scholastic Engagement, a promising organizing principle for understanding student achievement. Engagement was defined by three types of observable behavior: employing school skills, demonstrating initiative, and avoiding competing activities. While groups varied in average achievement, group performance was generally similar on grades and tests. Major factors in achievement were similarly constituted and similarly related from group to group. Differences between grades and tests give these measures complementary strengths in high‐stakes assessment. If artifactual differences between the two measures are not corrected, common statistical estimates of validity and fairness are unduly conservative.
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