Teaching Grammar

I used to teach all the subjects in my English school. The subjects ranged from reading, writing, listening, grammar, phonics, to science, math , and project. Among all these subjects, grammar is the least favorite subject from my students.
Instead of drilling them with lots of paper-based exercises, I noticed that if I spent less time explaining the rules and more activities-based drills. It created a more joyful learning atmosphere and my students seemed to learn faster and actually remembered it better. However, this method is a two-blades swords, by decreasing the paper-based exercises, it also decreases students's familiarity to the test/evaluation formats. Different teachers, students, classroom settings will all effect on the results.

So how do you manage your class when teaching grammar? Please share with us!