Even as the Pentagon's contentious pay-for-performance system fades away, it remains a hot button of controversy. The Defense Department is moving 226,000 civilian workers from the short-lived National Security Personnel System. Most will rejoin the familiar General Schedule that covers the bulk of federal employees. The transition is proceeding quickly. Seventy-five percent of those affected will be out of the NSPS by the end of September, long before the January 2012 deadline, John James, director of the transition office, told a Senate panel Wednesday. This may be the odd case of bureaucracy moving with too much speed, said Sen. George Voinovich, R-Ohio, the top Republican on the Homeland Security and Governmental Affairs federal workforce subcommittee. 'Take your time and do it right,' he told James. Under the law terminating the program, none of the workers will lose pay because of the transition. But perhaps as many as 50,000 whose NSPS salary is higher than that provided by their GS grade will get smaller raises than their colleagues, under a process known as 'pay retention.' They are not happy about that. 'If we are in fact faced with a situation where tens of thousands of employees are placed on retained pay, we believe you will be dealing with a disgruntled and demoralized workforce which has now been shifted in and out of different pay systems over the last three years,' Patricia Niehaus, president of the Federal Managers Association, told senators. On the other side of this situation are the majority of Defense Department employees who have been moved from the NSPS. They received a pay increase when they returned to the GS. 'Of the 53,057 employees that have been transitioned through the pay period that began on May 23, 2010, approximately 71 percent received a pay increase, with the average salary `bump' of $1,363 per year; and 8 percent remained at their same rate of pay because their salary matched a step within their new GS grade,' James said. The rest, 21 percent of those already moved, are on pay retention. If that ratio holds, more than 47,000 workers would get 50 percent of salary increases available to other employees until their GS salary schedule matches their pay. 'In gradual increments, the pay schedule is catching up to the employee's salary,' James said. When it does, 'pay retention ends, and the employee will begin to receive the full government pay increase.' The Federal Managers Association decries that predicament, particularly for older workers whose retirement income will be based on their pay while working. But the American Federation of Government Employees isn't so upset. 'Although we do not wish to see any employees disadvantaged by their conversion out of NSPS, I think it's important to put this situation into perspective,' Patricia Viers, president of AFGE Local 1148, told the Senate panel. Employees on pay retention 'already got what could be considered an early raise and have benefited from being at these higher pay levels for some length of time.' It is somewhat unusual for a union to offer something less than a full-throated advocacy for every penny workers could be entitled to. Before the transition started, AFGE represented about 668 NSPS staff members, according to Defense Department figures. A larger problem involving NSPS pay is the racial and class discrimination that Viers said an internal Pentagon evaluation found last year. 'Being black had a more negative effect than membership in other racial groups,' she said. 'So we know that a significant number of good employees lost money under NSPS.' Also, lower-wage workers were less likely to get high performance ratings. The Bush administration once had high hopes that the NSPS would lead the way in replacing the GS system with one in which pay raises were based more on performance than longevity. But the NSPS never won the confidence of employees. Congress terminated it last year. 'Since its inception, NSPS was plagued by employee distrust and a lack of transparency,' said subcommittee Chairman Daniel Akaka, D-Hawaii. 'As one of three senators to vote against NSPS in 2003, I was pleased that this system was repealed. Federal employees, especially those charged with defending our nation, are entitled to a personnel system that is fair and transparent.' 