This report describes the performance goals established for Tennessee school systems in accordance with the Education Improvement Act (EIA) adopted in 1992. The report also describes the initiatives undertaken to assist school systems in achieving those goals. Prepared by the State Board of Education and the Commissioner of Education, this report for 1993-94 also summarizes the results of various measures of student, teacher, and school performance. The state's four performance goals target academic gain, student promotion, dropout reduction, and attendance. In general, performance results showed steady improvement over prior years. Some of the outcomes include: (1) state scores on the Tennessee Comprehensive Assessment Program (TCAP) for students in grades 2-8 and 10 were above the median national percentiles on 98 percent of the subtests in reading, language, math, science, and social studies; (2) cumulative gains for Tennessee students were above national gains in reading and language, but below national gains in math, science, and social studies; (3) attendance rates in 1993-94 in grades K-6 was 95.02%, exceeding the 95% goal for the year 2000; for grades 7-12 the 1993-94 attendance rate was 0.2% higher than 1992-93; (4) the promotion rate for grades K-8 improved, while the dropout rate declined; (5) participation in the Advanced Placement program increased; (6) average Tennessee composite ACT scores were very slightly lower (20.2) than the national average (20.8); (7) average Tennessee Scholastic Aptitude Test (SAT) scores continued to exceed national averages; (8) teacher education reform was initiated in colleges and universities; and (9) 95 percent of eligible teachers participated in the Career Ladder program. Fourteen tables are included. Appendices contain statistical data, a summary of student attitudes toward school, and a list of waivers and permits by area (1987, 1990-94). (LMI)