How is assessment different from regular evaluation of students?

Assessing students in class is often called "classroom assessment," as opposed to "program assessment" or "learning outcomes assessment."

You assess students in your classes to determine how much they have learned in your classes and to assign grades. "Assessment of academic programs" is intended to assess how well programs are working by looking at the assessment results of groups of students in those programs. Therefore, an effective assessment program requires that the faculty in those programs have agreed upon the learning outcomes or learning goals for all students in the program, regardless of the courses that they take. Then, the faculty need to agree upon how they are going to determine what the students have learned. When faculty assess students as a group rather than as individual students, look at the assessment results from a program perspective, analyze those results, and determine whether they need to revise anything in the program, then they are conducting assessment of the academic programs.

If you would like to learn more about classroom assessment, here is a fine site at The University of Southern Queensland in Australia.