* If it's being framed as being applied to a small number of items on one machine, I'd mark down for premature optimization. Normally such assignments have a specific point, and going off the deep end with efficiency measuring often misses it.
* If it's being framed as being applied to huge data sets, asymptotic complexity is the metric to go off of.
* If it's being framed as a latency-dependent (UI, servers) then actual timing is the metric to grade off of.
I'd say that if you have an algo that is faster for small numbers, it usually doesn't really matter that it's faster. Small numbers go fast no matter what. Unless it's latency dependent, it's encouraging students to work on things that don't matter at all.
EDIT: spacing EDIT2: spelling