It sounds like you are thinking of assessments in summative terms. Summative assessments are used to measure student learning vs. established academic standards. This can be as simple as asking them to explain to you what they know about X. It takes a lot of time to listen to eveyone in the class, so most of the time we use some other format, like writing or multiple choice. These introduce problems because they are measuring things in addition to content knowledge, like the students reading or writing abililty.
Formative assessments measure students progress during instruction. These are what we use to check for understanding and modify our teaching. If students don't do well on a formative assessment it's because the instruction is not working--time to modify.
There are literally thousands of other things to think about! Take some good courses, read a lot, and practice your craft!
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