I now have enough information from multiple authoritative sources to give a thorough answer. Let me compile everything.
All muscle power in the hand - including the small intrinsic muscles - is graded using the MRC scale (0-5), also called the Oxford Grading Scale:
From: MRC Classification of Motor Nerve Dysfunction - Rockwood and Green's Fractures in Adults, 10th ed.
The small muscles of the hand are divided by nerve supply, and you test each by the specific movement it performs:
Clue: If APB is weak/wasted = median nerve palsy (seen in carpal tunnel syndrome).
Clue: Wasting of the hypothenar eminence + weak ADM = ulnar nerve palsy.
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Always palpate the muscle belly or tendon while testing - to confirm which muscle is actually working (some movements are possible by substitution from other muscles).
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Compare both sides - the dominant hand is often slightly stronger.
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Grade 4 is broad - it covers a wide range, from barely resisting a touch to almost-normal strength. Hence Grade 4+ (or 4-) is commonly used.
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Wasting before weakness - in chronic denervation, observe for wasting of thenar or hypothenar eminences and guttering between metacarpals (interossei wasting) before testing power.
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Froment's sign - a proxy test for adductor pollicis (ulnar nerve): patient pinches paper between thumb and index finger. If the IP joint of the thumb flexes (using FPL as a substitute), adductor pollicis is weak.
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For formal assessment, a handheld dynamometer (grip dynamometer or pinch gauge) reduces subjectivity, especially at Grade 4-5, and is useful for tracking recovery after nerve repair.
Sources: Rockwood and Green's Fractures in Adults 10th ed.; Bradley and Daroff's Neurology in Clinical Practice; Schreuders et al., Journal of Hand Therapy 2006