The manager shall prepare personnel rules governing the terms and conditions of employment of executive-professional employees. Rules affecting pay, benefits, discipline and discharge of such employees shall be effective upon their approval by resolution of the council. Rules governing other terms and conditions of employment of executive- professional employees shall be effective when filed in the office of the recorder and notice posted in a conspicuous place in the city hall. The rules promulgated by the manager shall establish a system of merit rating and rules for administration of the system.