What Is Your Idea of Truly "Fair" Grading?

A few terms ago, I was in a course with an unnamed
instructor, when he informed our entire class that most
instructors at xxx are very lax when grading. He said, and
this is a true story, that if the students deserve a "C,"
they are given a "B," if the student deserves a "B," they
are given an "A." His casual remark made me sick. I still
don't know if he was being candid or crazy. He did
sometimes act a little off. Regardless, I've haven't seen
this instructor around the campus for some time. But his
comments caused me to think over the different aspects
of "fair" grading.
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