We present a model for competency-based grading for calculus-based introductory physics that encourages students to obtain proficiency with all course content. By allowing students to continually improve their proficiency with skills and content throughout the semester, this formative grading system is designed to create a more flexible learning environment that better accommodates the varying schedules and needs of students. While all students show improvement in their performance following the implementation of this grading system, the largest gains were found for women and first generation students, both of whom often pose a retention risk in science and engineering degree programs.