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Google reshapes bonus system to reward top talent, mid-tier ratings take a hit
John Casey, Google’s Global Head of Compensation, outlined the company's plan to shift incentives without increasing the overall compensation budget.
This performance rebalancing comes amid product momentum for Google, with successful rollouts like Gemini 2.5 Pro and the Cloud Next suite and reflects a broader strategy to align compensation more directly with impact.(Photo: Unsplash)
Google is overhauling its employee appraisal and bonus framework to sharpen its focus on rewarding high performers, even if it means slightly dialing down payouts for those in the middle tier.
According to a report by The Times of India, in an internal email John Casey, Google’s Global Head of Compensation, outlined the company's plan to shift incentives without increasing the overall compensation budget.
Under the revised system, more employees will now be eligible for the coveted “Outstanding Impact” rating during annual reviews, a category that comes with higher bonuses and equity awards, starting with the 2026 compensation cycle. In parallel, managers will be granted a larger discretionary pool to further recognize those rated as having “Significant Impact".
However, in order to free up funds for this top-tier recognition, Google is trimming bonus and equity payouts slightly for employees in the “Significant Impact” and “Moderate Impact” categories. Despite the reductions, Casey emphasized that most employees in these brackets will still receive more than their base target bonus.
This performance rebalancing comes amid product momentum for Google, with successful rollouts like Gemini 2.5 Pro and the Cloud Next suite and reflects a broader strategy to align compensation more directly with impact. While the company insists the move is budget-neutral, the tweak may spark discontent among mid-tier performers who could see a drop in expected incentives despite strong performance.
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