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It's a double-edged sword. For good faculty, the job security allows us to explore big impactful questions that may take years to develop. For poor faculty, it's an impediment to getting rid of them. Department chairs can increase their teaching load, have them teach at 8am, or other undesirable things to potentially influence them to leave, but it's hard to get rid of some tenured folks.
I'll answer your second question first: I do not care if you come to class. I provide a service that (hopefully) helps you get from A (ignorance) to B (less ignorance). If you can get to point B without me, great! Why I think some professors prefer rigid attendance policies is because in our experience, the students who come to class perform the best. This, incidentally is why we want you to avoid "cramming" for exams too. Research suggests that steady intake of knowledge is better for you in the long run that single instances of knowledge intake. So, my stance is that you've paid for the service upfront, you can use as much or as little of that service as you like. But I [optimistically] think those who are proponents of taking attendance are so because they have your best interest at heart. On grading: Wow. What a topic; on which we could probably speak for days. In general, I hate it. But what it is intended to do is provide a signal, both to you [the student] and to the outside world of how good you are at something. First, if students took it as such (and not as a commentary on their worth as an individual) life would be much easier. It's easy for me to say, "You suck at this balance sheet analysis, but I still think you're a good person overall." But too frequently what students hear is the first two words and the last one. Second, the external world wants some information on how risky you'll be. So we make judgments on the quality of the student. I have a duty to you [my students], but also to future employers and the State of Connecticut to assess how risky you are. So when you earn an A in my class, you're demonstrating that you'll prove little to no risk of failure to a future employer. The problem comes in assessment. If we had a perfect predictor of success, we'd use it. Unfortunately, we don't. So we use the tools at hand (exams, projects, essays, presentations, etc.). "Genuinely wanting to learn the material" is potentially one predictor of success. Motivation counts for a lot. But it's not the only thing that should be used to assess you. So, to [finally] answer your question, I have a ton of leeway when it comes to assessment. I personally would rather use more tools rather than less to arrive at that assessment, because I think it paints a more accurate picture of you. I'd like to believe that my colleagues feel similarly, so I'd say that it's not common to drop an exam grade because a student "genuinely wanted to learn the material." I see a couple of things problematic about this: 1. How am I to tell what constitutes a genuine desire to learn? How am I to tell that other students don't also possess a genuine desire to learn? 2. Historically, there is a very high positive correlation between a genuine desire to learn and ...doing well on exams.
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