When using COLE 3.0/Schoology, this strategy can be employed using what Schoology calls "grading groups." In the "Members" area of any course, you'll see an area on the right hand side of the screen for "Grading Groups."
You can create as many groups as you want, and students can be in more than 1 group to allow for flexibility. Upon creating a group, you will see a list of students in your course. Clicking on the student names will add them to the group. If you need to edit the group after it's been created (like if you need to add new students), you can edit the group using the settings wheel pull-down.
Once groups are created, you can really start to differentiate the content in your course and do progress monitoring, either on an individual or group level.
And, speaking of the gradebook, creating grading groups also allows you to filter your gradebook assignments to see how different groups are doing on assignments. Using the pull-down where it says "All users" will let you choose to view only certain students in a group. If, for example, you have students who need accommodations due to a 504 or IEP, filtering your gradebook can help you see just that group.
For those schools using PowerSchool's gradebook, you can also create groups in PowerSchool for similar purposes; however, COLE 3.0 and PowerSchool don't communicate with each other in terms of groups. But, if a group assignment is created & graded in COLE 3.0/Schoology and pushed to PowerSchool, it will only record grades for students in that group.
* from Differentiating Instruction in the Regular Classroom, Diane Heacox, 2002
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