Based on damage dealt, IIRC.
And nowhere near fast enough. Before I modded it for myself to advance at a rate more comparable to other kill skills, it advanced at an agonizingly slow rate. I think I can count the number of times I've used a trainer for One-handed in all my play-thrus on one hand (pun not intended

)... I've lost track of how many times I've had to train with Faralda or Sybille for Destruction to catch up.
And that's on top of Destruction's "requires enchanting abuse to be effective in the first place" problems.