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"Grading on a curve" refers to a method of assigning grades that achieves a predetermined statistical distribution, regardless of the absolute level of performance.

"The curve" refers to the Normal Distribution curve, which is the usual distribution of test scores in practice.

For example, giving the top 10% of the class A's, even if no one gets more than half of the exam credit, or failing the bottom 20% of the class, even if everyone scores above 90%.

An advantage of grading on the curve is that it tends to eliminate bias in grades caused by the difficulty of the material or the quality of the instruction. It has the disadvantage that it does not reflect student mastery in absolute terms. It also discourages students from assisting each other with learning the subject.

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