Administer tests that assess beginning literacy skills in kindergarten and first grade. These include letter-naming, initial sound, and phoneme segmentation fluency. DIBELS (Dynamic Indicators of Basic Early Literacy Skills) has standardized assessments that measure these skills, which indicate reading readiness.
Assess oral reading fluency. You can use a formal assessment or create your own test. Choose a passage from a book that is on the child's instructional level. Make a copy of the passage so you can keep score as the child reads. Set a timer for one minute. Mark through words that the child misses. Calculate the score by subtracting the number of incorrect words from the total number of words in the passage.
Test students' knowledge of comprehension strategies. Have students read a passage from a story. You can use the same passage to assess their oral reading fluency. Then ask them to retell what they read in their own words. Balanced Reading.com has a free assessment with a rubric for scoring.
Assign grades based on test scores. Establish a grading system that uses letter or number grades depending upon your school's grading policy. For example, DIBELS assessments classify students as low-risk, some risk and at-risk. Assign grades A and B for low-risk, C for some risk and D or F for at-risk.
Grade according to your established rubric. For example, after you assess reading fluency, assign grades based on the number of words read. Scholastic and DIBELS have established oral reading goals for children in first through sixth grades.
Grade comprehension according to the students' ability to retell the passage they read. For example, a retelling that indicates very little understanding of the passage indicates the need for remediation. A brief retelling with no specifics would indicate need for improvement. A thorough retelling, indicating full understanding of the reading, indicates proficiency in comprehension.