It's all merit based where I work now. There are good and bad things. On the good side most guys have to prove themselves on their recurrent check ride to be considered for upgrade. Along with that the captains are asked about the performance of the FO's. this system has led to long term FO's because they had no business in the left seat. On that note I've seen it held over people's heads if they call out sick which leads to people flying sick for fear of missing that upgrade. It's a good system if your a good employee and work hard but it does jeopardize safety with people wanting to get the job done no matter what.