Based on state law as specified in Tennessee Code Annotated §49-1-601, the State Board of Education has established performance standards for schools and school systems. The State Department of Education has determined that the performance standards fall into two categories: those that are minimum standards or expectations and those that are maximum goals to be attained.

On the Tennessee Report Card for schools and school systems, meeting minimum expectations is considered a "C" or "average". Higher or lower performance is rated accordingly. Meeting those standards identified as maximum goals to be attained is considered an "A" or "exemplary," and ratings lower than exemplary are based on how close to the goal schools and school systems are. Because of the varying scales used for the different standards, it is not appropriate to average the different ratings together.