In reply to Sean Kelly:
It has always been a flawed method, as it's not universally applicable.
The much better method is to use the map annotation, which shows the local difference between grid and magnetic norths, and the yearly variation. If it isn't marked on the map, find out the local difference, and draw it on your map.
You simply have to remember to turn the compass capsule the appropriate number of degrees when changing from grid to magnetic, or magnetic to grid.
If, for instance, you take a magnetic bearing, and want to convert to a grid bearing, if grid N is W of mag N, rotate the capsule to the W (anticlockwise); if grid N is E of mag N, rotate the capsule to the E (clockwise). Don't look at the numbers on the capsule dial as you do it, just concentrate on how many degrees you have to move it, and in which direction. Once you have moved it, then you can take the reading (if needed).
Whatever the capsule position, and how you are holding the compass, imagine a N arrow pointing to the 'top' of the capsule. Then, looking at the map annotation, it should be obvious what to do to convert from mag to grid, and vice versa.
All you are doing is moving the capsule N between the two little N arrows on the map legend. Use the numbers, not the actual arrows, since the arrows may be schematic only, and do not necessarily depict the actual difference.
Post edited at 20:00