This phase could well be seen as training of the troops.

Training occurs automatically at the start of every turn. Through training, a unit can get rulevar 64 Experience Points a turn, up to a total of (rulevar 63 * 0.5) experience points.

Training, however, only goes so far to improve a unit, so a unit will suffer diminishing returns; after it gains (rulevar 63 * 0.5) through initial training, it will only gain (rulevar 64*0.5) experience points a turn up to (rulevar 63 * 0.75) XP points, and then (rulevar 63 * 0.25) XP points a turn up to rulevar 64 experience points.

This automatic experience growth is increased by the [ HQ staff experience & commander combat modifier in the unit’s HQ (50 Exp causes 50% increase in training) * HQ Power the HQ has on the unit ]

If you want to get more than rulevar 64 Experience Points you'll have to earn it through combat.

Maximum experience a subformation can reach is rulevar81.