ניסיון - Nisayon - Trial
"All the affairs of the world, whether for the good or for the bad, are trials [nisyonos] for a man"… [Mesilas Yesharim [Path of the Just] Rabbi Moshe Chaim Luzzatto]
When a person is destined to reach a level which is much higher than his present rung, it is necessary for him to undergo a descent first. [Lubavitcher Rebbe]
Before a person experiences a miracle - נס - , he is given a trial - ניסיון. There is no ascent [aliyah] without a prior descent [yeridah]. The lower the descent, the higher the potential ascent.
G-d tries the righteous, for knowing that the righteous will do His will, He desires to make them even more upright, and so He commands them to undertake a test, but He does not try the wicked, who would not obey.
Thus all trials in the Torah are for the good of the one being tried. [Nachmanidies, Commentary on the Torah; Genesis, p. 275; Chavel translation; ]
From here, we learn a number of important points. First, the purpose of a nisayon is not to reveal anything new to G-d, but to increase the spiritual reward of the person by bringing forth his or her latent greatness into actual deeds of righteousness.
Second, a person is only sent a nisayon that he or she has the potential to "pass," provided the person uses his free will properly.
Third [and this is implicit in the first point], the nisayon is intended for the good of the person—to elevate the person spiritually.
Nes can also be translated as "banner": The test is meant to "lift a banner" and reveal to the world, and to the person himself, the potential hidden within a human being.