Wait. Isn't Yellowdig an automatic grading system?

Yes and no. 

Yellowdig does pass a grade to your LMS that reflects a student's level of effort. So in that sense, Yellowdig's point system is indeed a grading system.

However, Yellowdig's point system was not designed to be an assessment of the quality of students' work. It does not tell you what a student knows or has learned, though Yellowdig activities do positively correlate with grades. Nevertheless, the way Yellowdig promotes learning outcomes is different from the way graded exams promote learning outcomes. Graded exams assess student knowledge; Yellowdig does not.

What is the purpose of a grading system that doesn't assess students?

By way of an answer, let's break this down into sub-questions.

1. What is the purpose of using a discussion platform? 

Is it to create a better learning community? To build a stronger sense of connection, community, and support between your students, you, and content relevant to your learning community? To provide your students a space where they can exchange ideas and information to improve their learning?

Or is the purpose of a discussion platform to assess your students' knowledge?

We would argue that it is the former. There are many other, better ways of assessing individual student knowledge (e.g., tests, quizzes, paper writing). There aren't many other, better ways of creating an active community space where students can enjoy the benefits of interacting and engaging with each other.

Yellowdig's point system is a gamification system—a system that uses game elements to facilitate or incentivize user interaction. Points and grades motivate specific patterns of engagement. By rewarding activity that fosters useful conversations, the points drive students to behave in ways that create dynamic, interesting, and engaging communities. These communities—and the conversations that take place in them—benefit learners and instructors.

Yellowdig points are designed to motivate all students to achieve 100% of the goal. Unlike grades for summative assessments, which are meaningful only if "curved" in some fashion, Yellowdig grades are fundamentally formative.

2. What is the purpose of attendance and participation grades?

Few instructors evaluate students solely on the basis of papers and exams. Often, instructors evaluate students partly on the basis of attendance and participation. Crucially, attendance and participation grades are effort-based evaluations, not performance-based evaluations. If students speak up in class and listen actively to their classmates, they are likely to get an "A" in participation. And if students show up every day, they will get an "A" in attendance.

Rewarding students for Yellowdig activity is just like rewarding students for attendance and participation. If students regularly post in their Community, that's a form of attendance. And just as insightful comments are acknowledged and rewarded in classroom settings, so insightful Yellowdig posts and comments are acknowledged and rewarded through instructor accolades and student reactions, which confer points to the recipient.

Yellowdig points serve the same pedagogical functions as attendance and participation points: They engage students, incentivize student interactions, and promote the free exchange of ideas. But unlike standard measures of attendance and participation, Yellowdig participation is easily and precisely quantifiable. Taking attendance drains valuable class time, and precisely quantifying in-class participation requires judicious note-taking or exceptional memory. On the other hand, Yellowdig gives instructors precise statistics on how students are engaging and the degree to which students are engaging. Yellowdig maintains the pedagogical advantages of attendance and participation grades without sacrificing evaluative rigor or objectivity.