I based it on the high school standards which I applied towards my students. All grades were taken into account when calculating the final grade. Any student receiving a D, no matter how well they did on other exams or in their lab work, could not and would not receive an A. It had less to do with their overall intelligence as the obvious fact that at least for one moment they did not regard their studies and their education as of being important. For that, they were penalized.
You then state that you were: '1 point off to a pass with a C'. Well, a C would still keep you from receiving an A, per the grading system I applied to all my students. The only time that such a grade would be overlooked, was in the event of personal difficulty or tragedy in the life of the student. i.e. major illness of the student, or major illness or death of a family member. In those cases, the exam grade was deleted and replaced with whatever grade they managed on a retest. Each student requesting a retest was reviewed as to legitimacy of such a need, not just by myself; but, by the school administrators as well.