It is critical that the expectations for participation, i.e., the list of behavioral indicators of good participation, match the goals and type of course. For example, in an accounting or math class, knowing facts from a case or reading may be irrelevant, and good completion of homework problems may become more important. Once the behavioral list is created, it provides a fairly simple mechanism for grading participation. After a couple of classes, this procedure becomes fairly easy. Of course, not every student will receive a rating every day, especially in a larger class.
Interim feedback is important to students, and can be provided in various forms.
I also conduct conferences with students if they request them. Prior to the interim assessment, and at the beginning of any conference I conduct, I ask students to think about how they would rate themselves on these criteria. Low assessments by either myself or the student provide stimulus for discussion about improvement, and together we develop strategies to help the student overcome shyness or other difficulties. It is important that the students take the responsibility for their own behaviors, though. I am sure this is not the final version, but it does help with handling the sticky elements of evaluating class participation.