Interactive projects and presentations are a much better way to assess a student's knowledge and understanding because they are much more interested. When students take tests they get bored and start to lose interest and not care about what they are doing but when they are doing an interactive project brings students back to liking what they are learning because they are more engaged.
Yes, there are better methods than tests to assess a student's skill, including long-term projects, presentations and reports. A test is a one-time snapshot of a student's knowledge, and it is adversely affected by many things, including stress, illness or family problems. Projects that are completed over time at the student's leisure more accurately represent a student's grasp of the information because those measurements are not affected by the events of a single day.
Using only a standardized test to assess student knowledge is unfair to students who are not good test takers. Furthermore, it detracts from learning because teachers are reduced to merely teaching students how to take tests. Rather, assessing student skills should involve various evaluations that include, in addition to testing subject knowledge, cognitive activities, logic and reasoning assessments and motor related exercises.
No two people are exactly the same. No two people have the exact same mind or way of learning. As much as standardized testing is tailored, refined and updated to have a wide application, ultimately a standardized test is mainly a test of a student's ability to take that particular test. In order to accurately measure a student's skills and how well they are learning a far more individualized approach is needed.
School systems must create a baseline from which students' knowledge of core subjects is assessed. The world that students enter after they graduate is competitive, and students must learn that as a fact of life in order to be successful. Testing also helps show students the areas in which they are most successful