Criterion-referenced testing was a major focus of psychometric research in the 1970s.
A common misunderstanding regarding the term is the meaning of criterion. Many, if not most, criterion-referenced tests involve a cutscore, where the examinee passes if their score exceeds the cutscore and fails if it does not (often called a mastery test). The criterion is not the cutscore; the criterion is the domain of subject matter that the test is designed to assess. For example, the criterion may be "Students should be able to correctly add two single-digit numbers," and the cutscore may be that students should correctly answer a minimum of 80% of the questions to pass.
The criterion-referenced interpretation of a test score identifies the relationship to the subject matter. In the case of a mastery test, this does mean identifying whether the examinee has "mastered" a specified level of the subject matter by comparing their score to the cutscore. However, not all criterion-referenced tests have a cutscore, and the score can simply refer to a person's standing on the subject domain. Again, the ACT is an example of this; there is no cutscore, it simply is an assessment of the student's knowledge of high-school level subject matter.
Because of this common misunderstanding, criterion-referenced tests have also been called standards-based assessments by some education agencies, as students are assessed with regards to standards that define what they "should" know, as defined by the state.
For example, if the criterion is "Students should be able to correctly add two single-digit numbers," then reasonable test questions might look like "" or "" A criterion-referenced test would report the student's performance strictly according to whether or not the individual student correctly answered these questions. A norm-referenced test would report primarily whether this student correctly answered more questions compared to other students in the group.
Even when testing similar topics, a test which is designed to accurately assess mastery may use different questions than one which is intended to show relative ranking. This is because some questions are better at reflecting actual achievement of students, and some test questions are better at differentiating between the best students and the worst students. (Many questions will do both.) A criterion-referenced test will use questions which were correctly answered by students who know the specific material. A norm-referenced test will use questions which were correctly answered by the "best" students and not correctly answered by the "worst" students.
Some tests can provide useful information about both actual achievement and relative ranking. The ACT provides both a ranking, and indication of what level is considered necessary to likely success in college. Some argue that the term "criterion-referenced test" is a misnomer, since it can refer to the interpretation of the score as well as the test itself. In the previous example, the same score on the ACT can be interpreted in a norm-referenced or criterion-referenced manner.
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