It is interesting to compare notes about what happens inside other schools.
In my son's grammar, it seems that the emphasis is for the child to reach their full potential rather that on straight marks. We have had an interim report that shows the effort and the level the child is working at. The next report will show targets based on the actual level and the CATs test they did in autumn. So the progress are measured against the expectations for the child, not as a comparison with others.
As for jah's comments, my son's school had a very similar system.
My daughter's grammar school only streams for Maths. 150 girls are divided into 7 sets; the top set being bigger than average and the bottom set smaller than average (about 16 girls). They expect to put all girls in top 6 sets in for higher Maths of which they expect most to get A* or A and just a handful to get B. The bottom set is put in for intermediate paper. They expect most to get B and a handful to get C. They do not expect anyone to get less than C.
In year 7, the only streaming is in Maths , with two levels and smaller classes for the lowest groups to allow children to catch up. The streaming is done differently from year 8 onwards, and they expect everyone to take the full maths GCSE and maily A-Bs marks.