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Alternative assessment is an assessment that is able to measure students’ larger dimension of language learning compared to traditional assessment. However, in practices many teachers are prone to use traditional assessment based on consideration that it is practical and efficient. On the other hand, traditional assessment is unable to measure students’ dimension in language learning instead measuring students’ comprehension level. Basically, alternative assessment is able to measure students’ larger dimension of language learning not only in comprehension level but also it engaged the students to create a tangible work whether in written or spoken. This thesis therefore aims at examining the teacher and students’ perception toward the use of portfolio as an alternative assessment at Senior High School of Muhammadiyah 12. The perceptions include: the knowledge about portfolio, how the teacher assessed the students’ portfolio, the benefits obtained from portfolio use, and the challenges of portfolio use. The method used was a qualitative with case study design. Questionnaire, interview, as well as documentation were used as a technique in obtaining the data. Both questionnaire and interview were administered to both teacher and students. This study involved an English teacher as well as a number of nineteen students of XII grade of Social Science was involved as the participants of the study. The data obtained from both teacher and students were analyzed through thematic analysis This study can be concluded that the teacher had positive perception toward the use of portfolio as an alternative assessment. However there was a gap between the teacher and students’ responses in questionnaire, based on the students’ responses, mostly the students responded neutrally in the questionnaire. According to the knowledge on how the teacher assessed the students’ portfolio, both the teacher and students asserted that rubric gathered from 2013 curriculum is used as a guidance in assessing the students’ portfolio. Both the teacher and students claimed that portfolio has benefitted the students to write well, enhance their vocabulary mastery, and so on. In contrary, both the teacher and students also encountered some challenges in using portfolio. The teacher challenges include providing the feedback for the students’ portfolio needs lots of time and the teacher found the students copied other portfolio. The students’ challenges include they have insufficient vocabulary mastery as well as the difficulty in producing good sentences. This study implicates on assessment used by teachers in educational field. It can promote the use of alternative assessment to assess the students’ capability in larger domain. Hence, regarding the finding of portfolio that benefits the students to enhance their vocabulary, the consideration to include portfolio as a part of curriculum should be considered by the educational parties in Indonesia. It can be a part of teaching method that can be used effectively to enhance the students’ vocabulary and help them to write.