Clerkship grading is a core feature of evaluation for medical students' skills as physicians and is considered by most residency program directors to be an indicator of future performance and success. With the transition of the U.S. Medical Licensing Examination Step 1 score to pass/fail, there will likely be even greater reliance on clerkship grades, which raises several important issues that need to be urgently addressed. This article details the current landscape of clerkship grading and the systemic discrepancies in assessment and allocation of honors. The authors examine not only objectivity and fairness in clerkship grading but also the reliability of clerkship grading in predicting residency performance and the potential benefits and drawbacks to adoption of a pass/fail clinical clerkship grading system. In the promotion of a more fair and equitable residency selection process, there must be standardization of grading systems with consideration of explicit grading criteria, grading committees, and/or structured education of evaluators and assessors regarding implicit bias. In addition, greater adherence and enforcement of transparency in grade distributions in the Medical Student Performance Evaluation is needed. These changes have the potential to level the playing field, foster equitable comparisons, and ultimately add more fairness to the residency selection process.