The problem is then their grade ends up being heavily affected by the quality of work done by other people. It'd be impossible to objectively grade such a task.

The problem is then their grade ends up being heavily affected by the quality of work done by other people. It'd be impossible to objectively grade such a task. The key difference between university and work is that in the former you are supposed to receive a pretty fine-grained assessment of your own skill, which is isolated and repeatable. In work, it's understood that promotion and slotting is a much more arbitrary affair and the marking criteria may not even be documented, let alone applied consistently. Also if your project fails because of bad work done by others, well, tough luck, that's what your salary is for. In university you're paying to be there, not the other way around, so the amount of random failure tolerable is much lower.