Can students grade themselves?

While presenting at ISTE 2011, I was demonstrating the effectiveness of using technology to provide narrative feedback to students. I explained the power of such feedback, in terms of learning, and I told the audience that I never place a letter or number grade on anything.

When the time for Q&A arrived, a curious attendee asked, "When it comes time for a report card grade, how do you do it?" He appeared stunned by my response.

"I let the kids decide the grade," I said. I could tell that he and most others in the audience were perplexed, so I elaborated. "I meet with each student," I continued, "I ask them to review their production for the quarter, along with all feedback. I ask them to evaluate the work. Then I say, 'So, what's your grade?' It's amazing how honest they are. Some even give themselves F's."

Can this system work in your class? If so, what's keeping you from doing it?"