I use standards based grading in a hybrid classroom. I will write more about hybrid learning at a later date, but here is the general idea. Students rotate through 3 stations. The first station is the independent station. At this station, students work individually. About half of the time I have students learning new information via tutorials or videos. The other half of the time students reflect on their learning through journal writing and practice skills.
The second station is the direct station. At this station, students work in a small group (about 5-11 students) with the teacher. This station ends up being differentiated. The teacher can reteach what was to be learned at the independent station if students are struggling or they can go into more challenging extension. This station could be used for guided practice and review as well. I also use this station for administering formal exams.
The last station is the collaborative station. At this station students work in smaller groups made from their larger rotation group (2-4 students). This station should be for higher level thinking. It is a place for projects and applications. The station could also be used for mixed practice or targeted practice if needed.
The way that this learning environment relates to SBG is that the various stations allow for focus on general and individual areas of weakness. Students could be assigned different assignments from their classmates if they need to make progress towards mastery of different objectives.
When I choose the assignments for practice sessions at each of the stations I can use my gradebook to decide who needs to work on what. For example if I have a large number of students missing one objective, I can put them in a group and reteach this content at the direct station. Then I could focus on a different objective for the other groups at direct station. I could look for smaller groups with a common missing objective and assign different collaborative station assignments for those groups. I can even give individual assignments at the independent station.
You can certainly implement SBG in a traditional classroom, but the grouping and regrouping in a hybrid classroom really makes targeted instruction and remediation very doable.