The Legislature should limit the use of merit pay increases to cases in which a state agency can show that an employee has met objective and measurable performance standards that help the agency achieve its goals and objectives. Background Texas state government employed 271,986 full-time equivalent employees as of May 31, 1998. In theory, an employee's pay is set at a level commensurate with his or her job responsibilities. Typically, more experienced employees will be assigned positions with greater responsibility, which is reflected in higher pay levels.
Classified employees demonstrating outstanding performance are eligible for annual merit raises.
State law does not prescribe any procedures for determining how merit raises will be allocated within an agency or set any requirement that such increases be related to meeting the agency's performance goals. Each agency develops and maintains its own program for allocating merit increases, which usually are supported by personnel evaluations completed by the employee's immediate supervisor. The only other limitation on merit raises caps the total amount an agency may spend on merit raises and other promotions to 1.7 percent of the amount expended by the agency on the prior year's salaries. However, these reductions are almost never used. Appropriations are tied directly to agency goals.