Grades tend to diminish students’ interest in whatever they’re learning. A “grading orientation” and a “learning orientation” have been shown to be inversely related and, as far as I can tell, every study that has ever investigated the impact on intrinsic motivation of receiving grades (or instructions that emphasize the importance of getting good grades) has found a negative effect.
I strongly agree with the impact this paragraph mentioned, it is very important to know that grading can be overwhelming and could make one loses confidence while learning. So it is indeed possible to have negative impact.