After the Hammers went above expectations by finishing 10th in 2012-13, the manager accepts that his side's current position of 12th is below what they should be reaching
The Hammers currently lie 12th in the Premier League, seven points clear of the drop zone with three matches to go.
Although seemingly safe, Allardyce is disappointed with the way in which the season has panned out - after a spate of injuries midway through the campaign - and expressed his desire to develop the team in the close-season.
"[Finishing 10th] last season was an overachievement and I think this season has been an underachievement up to now," he told the press.
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"It's been a tough one. The players and I are always learning and always know that we have to try to develop the team and move onto the next level - to change but not change too much.
"You have to get value for money and quality players that are better than you've already got. That's just the process of this business if you want to improve and get better."
Allardyce bemoaned the lack of financial equality in the Premier League, claiming that the top clubs have a huge advantage over the rest of the division.
"The great difficulty today is that you're competing with everybody else in the financial market that sometimes is unbalanced," he lamented. "If we all had the same amount of money to start the season with, it would make it a much more even playing field but it isn't like that now.
"The growth of the wealth of the bigger clubs and what they can pay certainly has a cascading effect going down to the players that you want.
"Sometimes the bargaining power between the end of the season and the start of the season is a very difficult game that you have to negotiate in. Whether you stand up and be counted in terms of what you want to pay, rather than what the player demands, becomes a very difficult job indeed."