The criteria against which actual performance is measured in the process of controlling are called:

Option 1 -> Grades are typically evaluation marks used in educational contexts, not the term for performance measurement criteria in controlling processes.

Option 2 -> Classes refer to categories or groupings of items/people, not the benchmarks used to measure performance in management control.

Option 3 -> Standards are the established benchmarks, norms, or criteria set during planning against which actual performance is compared in the controlling process.

Option 4 -> Appraisals are the actual evaluations or assessments of performance, not the predetermined criteria used for measurement.

Hence, Option 3: Standards -> In the controlling process, standards are the predetermined criteria or benchmarks established during the planning phase. These serve as reference points against which actual performance is measured to identify deviations and take corrective actions. -> correct