From the dropdown select the "Gradebook setup" option.

Click "Add" and select "Add grade item" from the drop down.

Click "Show more" and complete the following items.\
Complete the 'Grade items' as required.\
Select the Grade display type (Real (actual grades), Percentage and/or Letter grades can be shown).\
Select the appropriate number of decimal places you wish to use (The default number is 2)

Select whether you want the marks Hidden from students. If necessary, you can choose to hide a grade until a particular date enabling the "Hidden until" feature.

Select whether you want the marks Locked so that they cannot be updated by the related activity. If necessary, you can enable the "Lock after" feature and add a date.

Set an ID number so that you can identify the activity when it is included with others in a custom mark calculation.

Select the Grade type. Your choices are None, Value (a numerical value with a maximum and minimum), Scale (an item in a list) or Text (feedback only). Only Value and Scale may be aggregated.

If you selected Value or Scale, complete the Scale, Maximum grade, Minimum grade and Grade to pass fields as appropriate.

Set a maximum and minimum grade if necessary.

Under Parent category, to include this item in an existing Grade category, select the category from the drop-down list. (You can change this later if you need to.)

Add Grade Item