Instead of letter grades, my students receive an abbreviation of one of the following terms on their assignments. Some are entered in the gradebook (summative), but others are not (formative). Formative assessments are given during the learning process and are a way for me and my students to see how they are progressing. Summative assessments at benchmark points in the learning process to see how well the material has been acquired. Most of the wordage and philosophy comes from Kelly Daugherty's presentation that she shared with the TPRS group before school began last fall.
Advanced: I am confident and am reaching for the next level.
Proficient: I am confident with the material we've learned and can comfortably work with some new information.
Developing: I am comfortable with familiar and basic tasks and information, but struggle working with new or unfamiliar information and tasks.
Emerging: I am uncomfortable completing the task without help. If someone is there to talk me through it, I can be successful.
Beginning: I need help to understand how to accomplish the task.
My students have agreed that they much prefer the terminology to the letter grade, especially when they receive a "Beginning" (formally known as "F" for "Fail"). It communicates to them that the process has not ended with them as failures, but rather is just beginning and is hopeful.