CA Gov't Code Section 19992.3

(a)

Performance reports shall be considered, in the manner prescribed by department rule, in determining salary increases and decreases, the order of layoffs, and the advisability of transfers, demotions, and dismissals.

(b)

If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 3517.5, the memorandum of understanding shall be controlling without further legislative action, except that if such provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.