I think the alternative is exactly what you said: Ask the students to tell you improvement they noticed in themselves. I do this. You get odd answers. One said "I like to come more." But the answers get better. That same student later said: "I reread if I don't get it." So you know the student is getting better.
I perceive portfolio assessment to be a positive means of enhancing student self-concept and to demonstrate some progress with low-level literacy students. However, I think, it is not the most appropriate tool with students whose long-term goal is the GED. In those cases the students need exposure to testing because the ultimate goal is to pass standardized tests which do compare them with test results of other students. The portfolio method has some downsides, as does testing. It is still very subjective. I am aware of one situation in which a student was profusely praised, raised up in public as an example of literacy success - all based upon portfolio approaches. But when initially evaluated with standardized testing he was found to be still functioning at a low level. Yet he had been told, based upon portfolio approaches and what were obviously very subjective evaluations, that he was at a pre-GED level. The phony buildup did not help the student; it enabled rather than empowered the student and ultimately caused harm rather than good.
Ed. Note: What do you think? Is the portfolio or the test the truest measure of functioning? Why would an adult perform demonstrate two distinctly different levels of ability on two different assessment measures?