The Grading System has been around for ages, even before the Graders were in power. Back before Ramathians became more civilized and space travel hadn't been invented, they depended soley on hunting and catching their food. The Grading System was devised to determine who was in charge of the hunt.
The individual with four stripes on their face (usually two short and thin stripes on each cheek) was the one that was in charge of the hunt. So whether the hunt was a failure or a success depended upon them fully. Ramathians with one stripe were beginner hunters and Ramathians with two or three stripes were usually the more experienced hunters.
Like many things, the Grading System has evolved over time. Some see it now as just a waste, others seek hard to attain their stripes. Instead of the leader of the hunt bearing four stripes, stripes are now given out according to either heroic acts or useful deeds. Each stripe represents on formidable feat. The "stripes" are often given out by the ruling family.
Just like Ramathian tattoos, the stripes are carved into the flesh with a sharp tool or someone's handy tail blade. The stripe is then infused with a sealing sort of dye and then a tail flame is used to burn the flesh so that it won't heal back. Flinching during this process has been known to cause some family shame.