In a major policy shift aimed at boosting employee performance, Google is overhauling its compensation structure to more generously reward top-performing staff with enhanced bonuses and equity awards. According to a report by Business Insider, the tech giant will scale back payouts for employees with lower performance ratings under the new framework.
The revised compensation plan, set to impact 2025 end-of-year reviews and 2026 remuneration, was detailed in an internal email titled "Strengthening our performance culture" by John Casey, Google&rsquo;s Vice President of Global Compensation and Benefits.
&ldquo;High performance is more important than ever to achieve the goals we&rsquo;ve set,&rdquo; Casey wrote. The email emphasized that more employees will now have the opportunity to earn the &lsquo;Outstanding Impact&rsquo; rating during annual reviews, significantly boosting their bonus and equity awards through the company&rsquo;s individual multiplier model.
Central to this strategy is Google&rsquo;s internal employee evaluation system, Google Reviews and Development (GRAD), which annually ranks employees across five categories &mdash; from &lsquo;Not Enough Impact&rsquo; to the top tier of &lsquo;Transformative Impact&rsquo;. The most common rating, &lsquo;Significant Impact&rsquo;, is considered a strong performance benchmark and largely determines an employee&rsquo;s compensation.
As part of the revamp, Google will allow managers to assign the &lsquo;Outstanding Impact&rsquo; rating to a broader pool of employees. Additionally, discretionary budgets will be increased to allow more flexibility in rewarding those within the &lsquo;Significant Impact&rsquo; category.
To accommodate these changes, Google will slightly reduce bonus and equity multipliers for employees rated under the &lsquo;Significant Impact&rsquo; and &lsquo;Moderate Impact&rsquo; tiers. However, Casey reassured staff that these remain valuable performance ratings: &ldquo;Significant Impact will still get you more than your target bonus.&rdquo;
The overall changes are budget-neutral, with Google maintaining its investment in &ldquo;comprehensive and highly competitive compensation and benefits,&rdquo; Casey noted.
The policy update reflects a broader trend among tech giants such as Meta and Microsoft, who are tightening performance expectations in the face of economic pressures. While Google has avoided large-scale layoffs, the company is clearly pivoting toward productivity-driven incentives to maintain its growth trajectory.
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In a major policy shift aimed at boosting employee performance, Google is overhauling its compensation structure to more generously reward top-performing staff with enhanced bonuses and equity awards.

Google Revamps Compensation Structure to Reward High Performers