Assessment has become a routine feature of school life, internationally. Little is known, however, about the consequences for young people of assessment and grading in physical education (PE) -- a subject often associated with physical recreation. This paper explores young Norwegian's perceptions of assessment and grading in PE from a sociological perspective. In doing so, it contemplates the penetration of neo-liberal discourses as part of wider processes of globalization and Europeanization in school PE in Norway. The study utilizes data generated by 31 focus groups involving 148 youngsters from the 10th grade (15-16-year-olds) in eight purposively sampled secondary schools in Norway. Norwegian PE teachers continue to use tests in order to set grades in PE. The upshot is that students' enjoyment of and engagement in PE, as well as their self-identities and self-esteem, can be compromised by apprehension towards assessment and grading. These processes seem likely to undermine or even erode the potential sociopsychological benefits of PE for some young people by reinforcing the impression that the subject is fast becoming just one more outcome-oriented subject on an academic treadmill. In this regard, the ascendancy of neo-liberalism -- associated with the twin challenges of globalization and European integration -- appears to merely reinforce the hegemony of competitive individualism within PE in Norway, as elsewhere.