(a)
(1) The Division of Higher Education may develop and establish a merit increase pay system for employees of all institutions of higher education covered by this subchapter.
(2)
(A) Employees are eligible for a merit increase to be paid as an increase in salary or a lump sum on the employee's merit increase date, and the payment shall not be construed as exceeding the maximum pay level for the grade.
(B) The lump-sum payments authorized in this section shall be considered as salary for the purposes of retirement eligibility.
(3) The merit increase pay system shall be reviewed by the Legislative Council or, if the General Assembly is in session, the Joint Budget Committee.
(b) As used in this section, “merit increase pay system” means a merit-based pay system that incorporates pay and performance evaluation standards and establishes criteria for payments for employees who meet requisite performance categories.
(c) Merit payments may be awarded to employees who satisfy performance evaluation-based criteria developed by institutions in accordance with procedures and policies developed and approved by the division after review by the Legislative Council.