The estimate is derived from the analysis of test scores and possibly other relevant data from a sample drawn from the population.
The term normative assessment is used when the reference population are the peers of the test taker.
Grading curves serve to attach additional significance to these figures, and the specific distribution employed may vary between academic institutions.
A serious limitation of norm-reference tests is that the reference group may not represent the current population of interest.
As noted by the Oregon Research Institute's International Personality Item Pool website, "One should be very wary of using canned 'norms' because it isn't obvious that one could ever find a population of which one's present sample is a representative subset.
Another disadvantage of norm-referenced tests is that they cannot measure progress of the population as a whole, only where individuals fall within the whole.
It does not identify which test takers are able to correctly perform the tasks at a level that would be acceptable for employment or further education.
The ultimate objective of grading curves is to minimize or eliminate the influence of variation between different instructors of the same course, ensuring that the students in any given class are assessed relative to their peers.
This also circumvents problems associated with utilizing multiple versions of a particular examination, a method often employed where test administration dates vary between class sections.
Regardless of any difference in the level of difficulty, real or perceived, the grading curve ensures a balanced distribution of academic results.
However, curved grading can increase competitiveness between students and affect their sense of faculty fairness in a class.