IMO, if it is a legitimate part of an education (I debate this in my head, because there is a slippery slope of enforcing mainstream norms to the exclusion of minority viewpoints), then it should be graded separately. It only compounds the underlying hypocrisy and often seeming meaninglessness of grades by reducing subject grades because of behavior factors.
In various employee review systems I've used, there is separate scoring between character and team based measures and specific job performance measures.
On the other hand, for participation, look at an advanced educational context like a graduate seminar and it isn't quite adequate to measure only test and project performance. There is an aspect of learning that isn't as measurable that takes place in the dynamics of a seminar. If someone does not show up, they won't have partaken of that.
I'd also be curious to see the coursework teachers take (if any) on developing/teaching character.
The other thread on issues with a math teacher illustrate alternate risks. Overall an interesting topic, as I can't even decide if I think required community service in an IB program is a good or a bad thing.
