Google has announced significant changes to its salary structure, aiming to reward high-performing employees while adjusting compensation for those with lower ratings.
The modifications, set to impact end-of-year reviews and 2026 compensation planning, reflect a broader trend in the tech industry where companies are raising performance expectations to drive productivity.
Key Changes in the Compensation Model at Google
The revised salary structure will introduce higher bonuses and equity awards for employees who receive the Outstanding Impact rating during annual performance reviews.
Previously, most employees fell into the Significant Impact category, but under the new system, managers will have greater discretion to assign top ratings to more employees2.
Additionally, managers will receive expanded discretionary budgets to reward high performers within the Significant Impact category.
However, these changes are budget-neutral, meaning that some employees will receive reduced bonuses to fund the increases for top contributors.
Google’s Performance Review System: GRAD
The changes specifically affect Google’s Googler Reviews and Development (GRAD) system, which rates employee performance on a scale from “Not Enough Impact” to “Transformative Impact.”
Most employees typically fall into the Significant Impact category, but the new structure allows more employees to achieve the coveted Outstanding Impact rating, directly influencing their compensation.
Google’s move aligns with a broader trend in the tech industry, where companies like Microsoft and Meta are also intensifying performance-based compensation policies.
These firms are increasingly prioritizing high performers, ensuring that top contributors receive greater financial incentives while maintaining competitive pay structures.
Leadership Perspectives
John Casey, Google’s Vice President of Global Compensation and Benefits, emphasized that high performance is more important than ever to achieve the company’s goals.
He stated that the changes are designed to further reward top contributors while maintaining Google’s commitment to competitive compensation and benefits.
Google spokesperson Courtenay Mencini confirmed the adjustments, stating that the company is investing in rewarding employees who make a significant impact while ensuring that compensation remains highly competitive.
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