Should we grade in P.E.

I guess the question really leads us back to the purpose of grading.

Tentatively, I would say no. We should give feedback to help students improve their health and their performance, but we should do our utmost to ensure that students focus on improving their health and physical fitness habits, and spend as little time as possible mimicking behaviours in order to get a good grade, but possibly making no substantive change in their actual attitudes towards their health.

Feedback to parents should not be on performance, which is clearly unfair but on attitudes, and since attitudes are so subjective, the nature of feedback to parents should make this clear, which certainly a number does an excellent job of hiding.

If the purpose of grading is to coerce kids into complying with expectations, then use the traditional grading system and you'll have the same results as all other PE classes.

If you get creative and find a way to reward kids for improving run times, flexibility, balance, etc. you can use grades to encourage all students to improve their fitness levels.

I would vote to not use grades and create a program actually focused on fitness and not just teaching sports. Find ways to get kids excited about have fun and getting fit. PE should feel more like play. Leave the sports-specific trainings for kids who want that in their sport leagues.

Grades aren't necessarily an either or proposition, but there are so many traps you can fall into that turn PE into drudgery for non athletes, I would think long and hard about their purpose. Hopefully you will not be in a "department" because that group-think usually results in the worst practices.

Whilst agreeing with the notions that a) feedback is more important than grades and b) there should be a strong emphasis on health and fitness, you also need to think about being consistent with approaches in your school in other learning areas: if everyone else grades and you don't there can be a danger of the subject becoming devalued and marginalised. Physical education has an academic component that should be valued and promoted: it is where some kids excel, and that needs to be recognised.

You mentioned that you were going to be a new teacher soon, so I suggest you do that in your chosen classroom. As a previous Art Teacher who has obviously branched out, I can tell you that teachers teach, and that means giving feedback on the skills that you're covering in your classroom.
Don't worry about measuring the student's attitude, and hopefully you won't be asking students to mimic certain behaviors, even if they are healthy ones. Instead, give them a reason to want to use the information you present and then encourage their bodies to do what they should w/ that info! Then grade the results of how they showed the evidence of having used that info themselves; synthesizing with their bodies how to kick that ball or jump that rope...