Grayson used to be very hard on himself when he would do poorly in school. Over time, he realized that he should treat himself with care, acceptance, and kindness, like he would treat a good friend. Grayson’s realization shows he is developing .

self-compassion        

Explanation:

Self-compassion: In psychology, the term "self-compassion" is described as a process in which an individual tends to extend compassion related to oneself in reference to failure, perceived inadequacy, and general suffering. It entails an individual being kind and warm towards oneself while encountering personal shortcomings and pain rather than avoiding them or hurting oneself by criticizing.

In the question above, Grayson’s realization shows he is developing self-compassion.