Government salaries are based on objective measures today -- years of service and job role. There is no "merit" part or anything subjective.

To move to a system where "good people make more money", someone has to decide who the "good" people are. That person is susceptible to corruption. Moreso than in a private enterprise and with wider consequences, because government is not a business. So overpaying people doesn't have the same consequences as doing it privately.

NSPS was an attempt to push towards something more merit based (still pay band structured, NSPS bands spanned 2-3 GS grades). NSPS was rolled back in 2010 or so because the requirement was that everyone had to be on it by 2009 (early 2010?) and that didn't happen.

There are various *demo (lab, acq, I think some others) that are basically the same as NSPS (in principle) and ostensibly merit based. But they're also capped because of the correspondence to GS grades. Pay can increase much faster, in theory, than under GS but also you can be denied any raise except the general pay increase (below inflation, so a real pay cut even if a nominal pay raise) if your performance is poor.

Years of service is a form of corruption, since years of service isn't a proxy for performance

GS pay raises are only time-based in-grade, called steps. Each grade has 10 steps and if you start at step 1 it can take up to 18 years to reach step 10 (less if you have good performance because then you can get a bonus step increase). Most people don't start at step 1, though, so maxing out typically takes less time.

There are some jobs that will push you through grades on some regular cadence (usually 6-12 months in each grade), but those are usually "internships". New hires getting brought in at $50-60k/year GS-5 or GS-7 positions and moved up over 2-4 years into a GS-11 or GS-12 position. After that, they're back to competing for positions again for anything higher than GS-11/12 or whatever their target grade was.

corruption is a word with a meaning