Why can't regular grades be used for assessment?
You assign grades based upon what your students accomplished in your classes. An assessment program is designed to determine how well and/or how much students as a group have learned as a result of going through an entire program. It is possible that the faculty will discover that there are gaps in the students' learning, no matter how well individual courses were taught. It is possible that faculty teaching common courses may emphasize different learning goals or learning outcomes, and so students who took the same courses from different faculty may have learned different things. It is possible that students forget what they learn in their classes. So an assessment program is designed to determine whether the program is accomplishing what the faculty intend it to accomplish. Faculty as a group then look at the assessment results, analyze them, determine whether anything has to be changed to make their program more effective, and implement those changes.
However, if you do want to read of ways that grades can be used for assessment purposes,
I recommend Barbara Walvoord and Virginia Anderson's Effective Grading (San Francisco: Jossey-Bass, 1998).