Google has announced it will modify its performance rating system to reward high performers with larger bonuses and equity awards, while potentially reducing compensation for lower-performing staff.
In an email titled “Strengthening our performance culture,” John Casey, Google’s vice president of global compensation and benefits, informed employees that more of them will have the opportunity to achieve the “Outstanding Impact” rating during annual reviews.
“High performance is more important than ever to achieve the goals we’ve set,” Casey wrote, noting that the changes are being made to “further reward top contributors” at the company.
Google managers can now reward more employees as top performers
The changes specifically affect Google’s annual review system known as Googler Reviews and Development (GRAD), which rates employee performance on a scale from “not enough impact” to “Transformative Impact.” Most employees typically fall into the “Significant Impact” category.
Under the new structure, managers will be allowed to assign the coveted “Outstanding Impact” rating to more employees, which directly affects compensation. Additionally, managers will receive increased discretionary budgets to reward high performers within the “Significant Impact” category.
However, Casey acknowledged that these changes would be “budget-neutral,” meaning some employees will receive less to fund the increases for top performers.
HR head says that this change would mean some employees may get less bonus
“We want to be upfront that to fund this we’ll be slightly reducing the bonus and equity individual multipliers for Significant Impact and Moderate Impact ratings,” Casey told staff in the email. “It’s important to note that Significant Impact will remain a strong rating — achieving it will still get you more than your target bonus.”
Google spokesperson Courtenay Mencini confirmed the changes, stating, “We’re making these changes to further reward top performers and continue our momentum across the company.”
The compensation adjustments come amid a broader trend in the tech industry, with companies like Microsoft and Meta implementing policies to increase performance pressure on employees. These changes will apply to end-of-year reviews and 2026 compensation planning at Google.
“The above changes are budget-neutral, and overall we’re continuing to invest in comprehensive and highly competitive compensation and benefits,” Casey concluded in his email to staff.
