Compensatory grading is best described as:

Compensatory grading refers to an approach where performance in one area can offset or balance lower performance in another area. This method acknowledges that a student may excel in certain skills or subjects while struggling in others. By allowing higher performance in one area to compensate for lower performance in another, educators can provide a more holistic assessment of a student's capabilities and learning.

This practice is especially relevant for students with disabilities, including those who are deaf or hard-of-hearing, as it recognizes their diverse strengths and challenges. Rather than categorically penalizing a student for low performance in one domain, compensatory grading promotes a more nuanced understanding of their overall educational progress. This is particularly beneficial in fostering motivation and encouraging continued effort in learning.

The other choices do not accurately reflect the concept of compensatory grading. Ignoring low performance fails to address the learning needs or behaviors that might require intervention. Grade inflation undermines the integrity of academic evaluations and does not genuinely represent a student's understanding or skills. Strict adherence to grading rubrics without exception can overlook individual differences among students and reduce the ability to assess their full range of abilities.