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Google has revamped its compensation structure to increase rewards for its top-performing employees, describing high performance as “more important than ever” to achieving its goals.
The changes, first reported by Business Insider, were announced Tuesday in a company email sent to staff titled 'Strengthening our Performance Culture.'
John Casey, Google's VP of Global Compensation and Benefits, told employees that managers would be able to better compensate top performers on their team.
How is Google revamping compensation to drive high performance?
The shake-up in compensation, effective from 2026, will allow more Googlers than before the chance to achieve top performance ratings in their annual reviews.
“We'll increase the ratings distribution guidance we give to leaders for Outstanding Impact,” Casey’s email to staff explained.
As a result, more of the company’s budget for bonuses and equity will go to its highest performers, while lower and middling performers will have their bonuses and equity trimmed to fund the “budget-neutral” change.
“Second, we're increasing the discretionary budget we give to managers so they can further reward high performers within the Significant Impact rating,” the memo continued. “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.”
During their annual review, Googlers are assigned a performance ranking: Not Enough Impact, Moderate Impact, Significant Impact, Outstanding Impact, and Transformative Impact.
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The category in which an employee falls determines a multiplier that is used to calculate the bonus and equity payment they receive each year.
Most staff fall into the Significant category, while the Outstanding ranking is only given to a small minority. Fewer still receive the highly-prized Transformative status.
The email sent by Google’s VP of Global Compensation and Benefits went on to note that Significant Impact is still a “strong rating” that would result in an above-target bonus.
‘Strengthening our performance culture’ – Why Google is redesigning compensation
A refresh of compensation structures is Google’s latest push to drive stronger performance across its teams.
“There's incredible momentum across the company right now,” Casey wrote in the memo. “It's so exciting to see Googlers pull together to deliver on our ambitious product roadmaps. High performance is more important than ever to achieve the goals we've set.”
The compensation leader said Google would continue to “invest in comprehensive and highly competitive compensation and benefits.”
Echoing his words, a spokesperson for the tech giant told Business Insider: “We're making these changes to further reward top performers and continue our momentum across the company.”
In another attempt to encourage stronger team performance, Google recently moved to call staff back to the office more frequently, ending remote flexibility for some teams including HR and technical services.
“In-person collaboration is an important part of how we innovate and solve complex problems,” a company spokesperson said. “To support this, some teams have asked remote employees that live near an office to return to in-person work three days a week.”
Googlers who fail to comply risk being offered voluntary exit packages or facing role elimination.
