Create a grading rubric to distribute to students in your class. In this rubric, establish the criteria you will use to grade the creative writing papers. Since the quality of the work as a story, poem or other piece of literature may vary greatly based on talent or skill, this should only constitute a very small portion of the grade. Depending on your lesson material, grading criteria may include format, adherence to instructions, length, analysis or spelling and grammar.
Include an analytical writing section along with any creative writing paper. Rather than simply have students create works of literature, have them also analyze their own work and discuss their methods or goals within the story or poem. This gives you something else to grade and improves your students' critical skills.
Read the individual papers and follow the rubric as you read, judging the work based on the established criteria. Even if a paper is uninteresting, it may represent a student's best work.
Write a short note explaining how you came up with the grade at the end of the paper. Cite major problems, shortcomings or errors that clarify the grade given. Also mention positive aspects of each paper. Any time students create a work of art, no matter the quality, they may have invested in it emotionally, so be wary of hurting your students' feelings.