Indiana Governor Mitch Daniels told state employees Tuesday that most will be eligible for modest pay increases next year. Governor Mitch Daniels says the merit-based pay increases for state employees will be determined by positive performance reviews. State employees will get an extra $1000 for outstanding evaluations, $750 for exceeding expectations and $500 for a review showing they met expectations. Daniels says employees who are evaluated as needing improvement or not meeting expectations will not receive a pay increase. State employee pay has been frozen for the last two years. However, performance has been rewarded through the state’s spot bonus program and the governor’s public service achievement awards. Daniels has asked leaders of the state’s executive branch agencies to forego a salary increase. Daniels says for the third straight year he is declining the pay increase allotted for him by the state legislature.