Google is making key changes to its performance review and bonus system, resulting in slightly smaller bonuses for most employees while aiming to better reward its top performers, according to an internal email accessed by The Times of India.
John Casey, Google’s Global Head of Compensation, informed employees that the adjustments are part of the company’s efforts to sharpen performance-based rewards, especially in light of successful launches such as Gemini 2.5 Pro and Cloud Next.
Under the updated structure, a larger number of employees will now be eligible for the company’s highest performance rating — “Outstanding Impact”. Those who achieve this rating will receive larger bonuses and increased equity allocations in their 2026 compensation packages.
Managers will also have increased flexibility to reward employees rated under the “Significant Impact” category — the second-highest performance tier. They’ll be allowed more discretion in allocating team bonus budgets.
However, the changes come with a cost. To accommodate increased rewards for top performers, the company will slightly reduce bonus and equity payouts for those in the “Significant Impact” and “Moderate Impact” categories.
“We will slightly reduce bonus and equity payouts for those receiving a rating of Significant Impact and Moderate Impact,” Casey wrote in the email. Still, he noted that employees in the “Significant Impact” group would continue to receive more than their target bonus, even after the reduction.
The company emphasised that the changes are budget-neutral and are not part of a cost-cutting exercise. Rather, they are meant to better recognise exceptional performance within the workforce.
The revised system will take effect during the year-end performance reviews and will determine compensation packages for 2026. While the move aims to boost motivation among high performers, it may leave mid-level performers facing reduced rewards.
