Google Revamps Salary Structure Incentivising Top Performers But There's A Catch

Tech giant Google is revamping its employee performance review process to offer bigger bonuses and equity grants to high-performing staff members. The new compensation structure at Google will take effect in time to influence 2025 end-of-year reviews and 2026 compensation, but there's a catch.

In an email to staff, accessed by Business Insider, John Casey, Google's Global Head of Compensation, said the managers would be able to allocate the "Outstanding Impact" score to more employees than previously.

"This means more Googlers will have the opportunity to achieve that rating during annual reviews, and their bonus and equity award will be modelled using the O's individual multiplier in 2026," Mr Casey wrote

While those with the higher ratings will receive increased payouts, there appears to be a tradeoff -- one that would affect other employees. To support the shift, employees in the "Significant Impact" and "Moderate Impact" brackets will have their usual bonuses and equity slashed.

"We want to be upfront that to fund this, we will slightly reduce bonus and equity payouts for those receiving a rating of Significant Impact and Moderate Impact," Mr Casey wrote in the email.

"These changes are budget-neutral," he added, "and overall we're continuing to invest in comprehensive and highly competitive compensation and benefits."

Notably, Google's internal review system, Google Reviews and Development (GRAD) is used to rate the performance of employees annually. The system categories employees across five tiers, from 'Not Enough Impact' to the top rating of 'Transformative Impact'. Most employees typically receive a 'Significant Impact' score, considered a strong rating.

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Google orders remote workers to return

The fresh compensation structure comes in the backdrop of Google ordering its remote workers to return to the office if they want to keep their jobs and avoid being made redundant. The tech giant has told staff members in several units that their roles could be at risk if they do not start reporting to their closest office at least three days a week for a hybrid work schedule.

"As we've said before, in-person collaboration is an important part of how we innovate and solve complex problems," a Google 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."

Remote employees in Google's Technical Services unit are being offered a one-time paid relocation expense to move within 50 miles of an office.