Impact of formative assessment on learning outcome – an analysis with an Indian B-school

Purpose Effectiveness of pedagogical tools has long been an area of academic interest. The transition toward outcome-based education, technological progress and evolving learner expectations have compelled educators to adopt more innovative instructional approaches. This study aims to examine the effectiveness of formative assessment as a pedagogical tool in enhancing students’ satisfaction, engagement and learning outcomes in management education, particularly within the Indian context. It also seeks to address the existing research gap by exploring the interrelationships among these constructs within a single integrative framework. Design/methodology/approach The study employed a quantitative research design using data collected from postgraduate management students in India. Partial least squares structural equation modeling was used to empirically test a conceptual model linking formative assessment effectiveness, student satisfaction, engagement intention and learning outcomes. The analysis examined both direct and mediating relationships among these variables to understand how formative assessment mechanisms influence students’ academic experiences and outcomes under the outcome-based education framework. Findings The results indicate that effective formative assessment significantly enhances student satisfaction and engagement intentions, which in turn positively influence the learning outcomes. The findings suggest that continuous feedback and active instructor–student interaction contribute to improved student performance and motivation. This study provides empirical evidence supporting the role of formative assessment as a key pedagogical strategy in management education and reinforces its potential in fostering deeper learning and improved academic achievement. Research limitations/implications The study is limited to postgraduate management students in select Indian institutions, which may restrict the generalizability of findings across other disciplines and regions. Future research could extend the framework to diverse educational contexts or use longitudinal data to capture changes in learner engagement over time. The results offer theoretical implications by empirically validating the effectiveness of formative assessment within an emerging economy context. Practical implications For educators and policymakers, the study underscores the importance of integrating formative assessment practices into course design to enhance student engagement and learning outcomes. It provides actionable insights for instructors seeking to develop more interactive, feedback-driven and learner-centered pedagogical strategies aligned with outcome-based education objectives. Social implications By fostering active learning and continuous improvement, formative assessment can help develop more skilled and engaged professionals. Improved learning outcomes in management education can lead to better-prepared graduates, positively impacting industries and society. Enhanced student engagement contributes to better teamwork, leadership and problem-solving skills, which are essential for real-world business challenges. Institutions adopting formative assessment can create a culture of continuous learning, aligning education with workforce needs. The study highlights the broader societal benefits of refining assessment methods to develop competent professionals who can adapt to dynamic business environments and contribute meaningfully to the industries they work in. Originality/value This study contributes to the limited body of empirical research on formative assessment within Indian management education. By offering a holistic and context-specific understanding of how formative assessment influences satisfaction, engagement and learning, it extends existing literature and addresses a significant gap in the empirical validation of pedagogical effectiveness under outcome-based education frameworks in emerging economies.