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Josh Eyler discusses the problem with grades on episode 401 of the Teaching in Higher Ed podcast.
Quotes from the episode

The more we focus on grades, the less we focus on learning.
-Josh Eyler
The grades are not the end of the story. They are not even the bulk of your story. They are a chapter of your story.
-Josh Eyler
Resources
Episode 65 with Josh Eyler: Teaching Lessons from Pixar
teachinginhighered.comEpisode 231 with Josh Eyler: How Humans Learn
teachinginhighered.comHow Humans Learn, by Josh Eyler
bookshop.orgThe New Education, by Cathy Davidson
bookshop.orgDavid Buck on Twitter
twitter.comUngrading, an Introduction, by Jesse Stommel
jessestommel.comEvergreen State College Evaluation
evergreen.edu