I shouldn't pretend to be an expert about this, but I do talk to teachers regularly who struggle with the problem of grading student papers. It intersects with the problem of reviewing the papers that peers submit to journals, and, indeed, with the problem of evaluating what we read in general. (It also intersects with the problem of plagiarism, which I'll return to in another post.) Few people, of course, complain about good writing, and few are in doubt about what to do with such papers: enjoy them. It's the bad writing that gives people a pain. And the complaint I normally hear is that badly written papers are disproportionately time-consuming to grade/review. When they are published, they are, of course, simply time-consuming to read and understand.
To my mind, this complaint is rooted in the misconception that academic writers have the right and the power to waste their readers' time. If they write badly, on this view, a writer is always unilaterally making a draw on the reader's time and effort, about which the reader has no say. We are to imagine that the reader is powerless to stop reading when subjected to such treatment by a writer but nonetheless has full rights to gripe and complain when it happens. What is forgotten is that the harm is not being done by the writer to the reader but by the writer to his or her own damnable ethos, i.e., to the reader's opinion of the writer, i.e., to the writer's shot at a good grade or a publication. We have to remind the reader that he or she is in full control of how much time to spend in the company of an author and how to spend it.*
We have to level the playing field. All writers should be given a fair, equal shot at the reader's attention, whether as an examiner or a reviewer. Indeed, the well-written paper should, ultimately, get more attention (and that means more time) than the poorly written paper, but I'll return to that issue in a moment. The best way to level the field is to have a set of standards for what a paper should be able to accomplish in the first three paragraphs, or the first two pages, or the first 10 minutes of reading. You can have your own reading strategy, so I'm leaving this somewhat open. My actual advice, if you're interested, is to be pretty clear about what you want to be told in the first 600 words, what the conclusion should look like, what the literature list should contain (and how it should be set up). We can expect writers to have polished their prose especially in the introduction, so it's entirely fair to form an opinion about the writer's style based on the impression that the first few paragraphs leave you with. Is this a clear, lucid thinker? Is this a careful, conscientious writer?
Assignments vary in length and complexity, and the amount of time you're going to spend grading each paper will vary accordingly. But don't be ashamed about the fact the grade is usually determined already in the first few minutes. Sometimes, a student/peer will fool you, intentionally or not, but most of the time the quality of a paper's introduction actually is predictive of the grade it will get, or its publishability in a journal. What is important is that each paper you read has the same opportunity to impress you. If it squanders that opportunity by being sloppily written and poorly organized, so that when you run out of time you've learned very little about what is on the writer's mind, that's not your fault, nor the fault of circumstance. It's the incompetence or indifference of the writer that is to blame. And that is actually relevant for the grade. Spelling does, in that sense, count.
I said that good papers should, ultimately, get more attention than bad ones. How might that work if all papers are graded and reviewed in the same amount of time? This is where feedback comes in. There's nothing more unfair than the classroom in which the C students all get detailed criticism of their arguments and grammar, while the A students get a nice big A, a smiley, and one-word comment like "Brilliant!" "But, surely," it will be said, "the C students must be told where they can improve." Yes, of course. But so, surely, must the A students! Getting an A in a course or writing a publishable paper does not mean can't improve. It just means you're starting at a high level.
So here's my advice. Let detailed feedback, beyond the mere grade or accept/reject decision, depend on the writer's willingness to receive it. Give the student their A, B, C etc. in a quick and efficient manner, based on some pretty objective characteristics of the paper. Then, if the student wants to hear more, give them an additional assignment: have them rewrite the introduction into three, 27-minute paragraphs, or have them produce an after-the-fact outline. (That's if you're me; give them whatever small assignment you like.) Then meet with them and discuss it. The students who want to improve, no matter what their grade, will do the assignment, and now you have their full and specific attention. You can spend time on them without feeling like you're wasting it. The students who don't care (and they get all kinds of grades, I will remind you) will not do the extra bit of work. That's fine too. Everyone's happy.
In the case of a review report, you don't usually have an opportunity for this kind of interaction, of course. So I would suggest saving your detailed line-by-line criticism for a paper that you think should be published. If you are going to recommend a revise and resubmit, limit your feedback to the parts that should be reworked, and let the more detailed feedback come in the next round, after the author has demonstrated a willingness to do that work, and a basic comprehension of the need for it.
In short, my advice is not to resent the task of evaluating the work of others. One of the basic functions of academia is to give people an accurate sense of how smart they are in a particular subject. And there really are differences between people on that scale. For every domain of knowledge, at every level of education, there are those who deserve As, those who deserve Cs, and those who deserve Fs. Part of your job is to assign those grades as fairly and efficiently as possible. It's a perfectly legitimate business.
*This paragraph has been rewritten for clarity. (See comments.)