John James, director of the Pentagon's National Security Personnel System would not estimate how many of the 226,000 total employees under NSPS, which Congress killed last fall, might be placed under retained pay status by the end of 2011. (CHRIS MADDALONI / STAFF)
More than 11,000 civilian employees who have been transitioned out of the Defense Department's controversial pay-for-performance system will receive halved pay raises for the time being, the Pentagon said today.
John James, director of the Pentagon's National Security Personnel System (NSPS) Transition Office, told lawmakers that those employees — 21 percent of the 53,057 who had been shifted back to the General Schedule as of May 23 — earn more than their new GS grades allow. Under the government's pay retention rules, that means they will receive half the annual pay raise all other GS employees receive until their grade's step 10 pay cap catches up to their salaries.
James would not estimate how many of the 226,000 total employees under NSPS, which Congress killed last fall, might be placed under retained pay status by the end of 2011, when all conversions must be finished. But if the 21 percent rate continues, nearly 47,500 employees could be placed under pay retention.
The Pentagon last December originally estimated that only 4,000 employees would be placed under pay retention.
Pat Niehaus, president of the Federal Managers Association, told the Senate Homeland Security and Governmental Affairs subcommittee on government management, the federal workforce and the District of Columbia that slashing pay raises for tens of thousands of high-performing employees will crush morale, and could drive them to retire or seek other jobs. She said some employees have told her they're already considering retiring because of the pay retention issue.
"You will be dealing with a disgruntled and demoralized workforce which has now been jerked in and out of different pay systems over the last three years," Niehaus said. "Many of these dedicated employees have crunched the numbers and determined that the General Schedule will not catch up with them by the time they retire over the next decade."
Niehaus called for the Pentagon and Congress to come up with a solution to avoid cutting those employees' pay raises, such as phasing out the reduced raise over the next five years or moving them to a more flexible pay system.
But the American Federation of Government Employees had little sympathy for those employees, and said many other employees suffered under NSPS.
"While employees who made so much under NSPS that they are put on pay retention … may believe their performance was so superior to their colleagues that they deserved every penny of it, the truth may be that some of them got those raises because they were in high places, working for powerful people, or were otherwise not negatively affected by the discriminatory practices revealed in NSPS," Patricia Viers, president of AFGE's Local 1148, told the subcommittee. Those employees "already got what could be considered an early raise and have benefited from being at these higher pay levels for some length of time. These situations need to be put into perspective."