With an exam, there is the intermediate step prior to grading where the student has to take the exam independently. When grading time comes, teachers may find themselves in an awkward position. If they have been very directive in their suggestions for revision, they feel they are grading their own advice. If they have not been directive, but left the decisions up to the student, they may feel more comfortable with the grading. But if students make bad decisions, teachers might feel they have let the students down by not having been more directive.
Grades can also interfere with student-teacher interaction in another way.
A lot of students want their A's, and they're not bashful about saying so. That may or may not improve the atmosphere of the conference. No matter how well teachers manage to take off the coach's hat and put on the judge's hat when grading time comes, the contrary roles still fight one another. This is why many teachers prefer, with good reason, to rely primarily on peer groups and the writing center to help students through the composing process. In peer response, students meet in small groups, in class or out of class, to share and critique each other's drafts.