Good question, as I went to a school where we didn't calculate GPA, and had three grades - Acceptable, Acceptable with Distinction, and No Record (AC, AD, NR). It went to A-B-C-NR after I graduated. The NR grade was a godsend for some that didn't quite grasp subjects in one term (7 weeks), so you could retake the course with no penalty. Let's just say there were quite a few of us that had NRs in courses and either got better, or changed majors. The downside is that there were still course credit milestones you had to reach each year, and if not, you got a not so friendly reminder from the administration.
The AC-AD system was difficult for some companies when recruiting, as they wanted to see a specific GPA. There might have been a corresponding GPA for each grade, maybe 4.0 and 2.75, however a student with mostly AC grades just missing out on AD would have a perceived "low" GPA. In concept, a great idea to take pressure off grades and focus on learning, however it didn't always match expectations vs other colleges.