Tests that Encourage Students to Learn

As I have written before, I teach an English class at a nursing school (Please see the worst dialogue ever made for nurses for reference). This is my second year teaching the class. One of the problems I had last year was that about 10 of the 40 students consistently got 10 and 20 percents on tests and quizes. As a teacher there is nothing worse than having to mark a blank test page. I would always wonder why the student gave up on the class and what I could have done differently.
This year, although I have not stopped tests and quizes I have stopped marking them. Rather, I have the students mark them. After the students mark their tests and quizes I ask them to give them to me and I write comments on them. I have also told the students that I will not record their grades. The tests and quizes are designed to record how much they are improving and I want them to study hard so that they will improve.
The other day in the nursing school class we had a mid-term examination. The exam had 4 parts. I gave the students a time limit to complete each part and then we went over the answers together with the students correcting their own tests. Students then evaluated their own performance on the test and wrote about how they might be able to improve. A handful of students left one or two parts of the test blank. When we went over the answers, they did write in the answers and wrote in the comment section of their test that they did not study for the test and that they would study harder next time. Although not ideal, this is much better than receiving a blank test from a student.
I remember when I was studying Japanese. Whenever I was returned a graded test I would look at the score and never the teacher's corrections. The only time I would look at the comments/corrections of the teacher was if I had a good score. Because I usually studied hard for a test, and test scores were very influential on my course grade, a bad score was like a slap in the face. Now, I regret not looking at the tests because I had absolutely wonderful professors who wrote very helpful comments on the tests.
The point of a test should be to help the student determine how much of the class he/she had understood and to understand his/her progress. With grades, I believe, tests lose their value.