Few of us would argue that correction is one of the most important things we can provide as language teachers. Taking someone’s own, often carefully crafted response or utterance and helping them to perfect it is something that students often only receive in the classroom, making it valuable, desired and ultimately expected by your students.
The reason that students value the correction they receive inside the classroom so much is because they simply don’t get it on the outside. This seems especially so in English, where cultural politeness prevents most natives from correcting grammar mistakes as long as they understand the speaker (and the rest of the time we may just smile and nod!).
However, if used incorrectly or too frequently it can have a disastrous effect on fluency, confidence and morale. The goal of correcting every mistake is not only nigh on impossible, but is detrimental to students.