Allows students to show their mastery of a specific skill. In most performance-test scenarios, students are required to perform a complex skill or procedure or create a product to demonstrate that they can apply the knowledge and skills they have learned. The instructor or examiner will typically observe this performance and make an evaluation based on their observations. Although these tests are time-consuming, for the most part, and can be difficult to grade because they are somewhat more subjective and certainly less standardized, there are ways around these issues.

For instance, students studying foreign languages can produce an oral presentation, or students pursuing qualifications in the sciences can be asked to conduct experiments under set conditions with instructors observing or making presentations before the class and the instructor. One way to overcome the potential subjectivity of assessments is for performances to be recorded somehow and potentially graded (either based on audio recording or video recordings) by an independent examiner or a group of instructors offering their opinion and coming to a group decision on the grade. Instructors should work with a scoring guide for each grade in this testing scenario.