Google, the global IT giant, is making a significant change to its salary structure, shifting its focus to performance-based pay. The company will now reward high-performing employees with bigger bonuses and equity awards, while those with lower performance ratings may receive less money. This change aims to recognize and compensate employees who make the most significant contributions to the company’s goals. In an email, John Casey, Google’s Vice President of Global Compensation and Benefits, explained that more employees will have the opportunity to earn the top rating, “Outstanding Impact,” during yearly reviews.
Previously, most employees were rated as having a “Significant Impact,” but the new system will allow managers to give the “Outstanding Impact” rating to more employees, affecting their pay. The changes are “budget-neutral,” meaning that some employees may receive smaller bonuses to fund larger rewards for top performers. Google’s HR head, Courtenay Mencini, confirmed that the goal is to reward top employees while keeping the company’s compensation competitive.
The new system is part of a larger trend in the tech industry, where companies like Microsoft and Meta are also raising performance expectations. The changes will influence Google’s year-end reviews and compensation planning for 2026, with the company continuing to invest in rewarding employees who make a significant impact. Casey noted that the “Significant Impact” rating will still be valuable, and employees who earn it will receive a bonus that exceeds their target.
Google’s move is significant, especially during the current “layoff season” in the tech industry. The company has been making changes to its workforce, including giving ultimatums to employees to come to the office or quit. The new salary structure is designed to motivate and reward high-performing employees, while also ensuring that the company remains competitive in the industry.
The changes will likely have a significant impact on Google’s employees, with some potentially receiving larger bonuses and others receiving smaller rewards. The company’s focus on performance-based pay is expected to drive innovation and growth, as employees are incentivized to contribute to the company’s goals. As the tech industry continues to evolve, Google’s move is seen as a strategic step to stay ahead of the competition and attract and retain top talent.