I have had a velites kill one man in a battle and go up a chevron, so it is probably man-based. I've also merged two units and had them gain a chevron instead of losing it. They were both vanilla that have only been through a battle or two.

On a somewhat related note: I find that generals gain much more experience in R:TW than in M:TW. In Rome it doesn't take much to get a 10 star general, but I remember working for decades to get a 9 star one in M:TW. This probably has more to do with all the new VnV and retianers more than the actual battles fought.