(a) The director shall establish, in cooperation with the appointing authorities, a system of service ratings, based upon standards of employment and output of employees in each class of positions in the classified service, which may be amended from time to time as the necessity arises, and such service ratings shall be considered in such manner and with such weight as shall be provided by the rules and regulations:

(1) In determining salary increases or decreases, within the established limits.
(2) As a factor in promotional tests.
(3) As a factor in determining layoffs, when forces should be reduced because of insufficient funds or work.
(4) In determining the order in which names are to be placed on the reemployment lists.
(5) As a means of discovering employees who should be promoted, demoted, transferred, or dismissed.
(b) Each appointing authority shall report to the director, in such manner and at such times as the rules and regulations require, the service ratings of employees in his or her division or department and shall also disclose such other information as the director may request, to enable the director to determine the service ratings of all employees. Each employee shall be given reasonable opportunity to inspect the records of the department which show his or her service ratings.