(Indianapolis, Ind.) - With the new year will come a new increase in pay for state employees in Indiana.

Governor Mitch Daniels sent a letter to state workers Tuesday informing them following a two-year pay freeze most will be eligible for a modest pay increase in 2011.

“It has been very disappointing to me that we have not been able to recognize financially your hard work over the last two years,” Daniels wrote. “Of course, few of the taxpayers who pay our salaries have had pay increases, and many have lost income or their jobs. Still, I have really regretted our inability to give pay raises during this recession.”

The raises, which begin appearing on paychecks in February, will average 1.3 percent and be based on each employee’s performance review.

According to the Governor’s office, the raises will be a flat amount: $1,000 for employees who earn an evaluation of outstanding (approximately 5 percent of employees); $750 for those who exceed expectations (10 percent of employees), and $500 for those who meet expectations (75 percent of employees).

Employees who are evaluated as needing improvement or who do not meet expectations will not receive a pay increase.

Daniels says he and his executive staff will not accept pay increases in 2011.