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Google announced major changes to its employee performance review system that will reward high performers with greater bonuses and equity while reducing compensation for others, according to an internal email sent to staff earlier this week.
“High performance is more important than ever to achieve the goals we’ve set,” wrote John Casey, Google’s vice president of global compensation and benefits, in the company-wide message. The revisions to Google’s annual review process will allow more employees to achieve the coveted “Outstanding Impact” rating.
The company is restructuring what it calls the “Googler Reviews and Development” (GRAD) system to “further reward top contributors,” Casey explained. The changes mean “more Googlers will have the opportunity to achieve that rating during annual reviews, and their bonus and equity award will be modeled using the O’s individual multiplier in 2026.”
Google spokesperson Courtenay Mencini confirmed the changes, stating: “We’re making these changes to further reward top performers and continue our momentum across the company.”
However, to fund these increased rewards, Google is “slightly reducing the bonus and equity individual multipliers for Significant Impact and Moderate Impact ratings,” according to Casey. The company emphasized these changes are “budget-neutral” overall.
“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,” Casey told staff, though he assured them that “Significant Impact will remain a strong rating — achieving it will still get you more than your target bonus.”
Read Google’s compensations head full letter to employees
“Hi Googlers,
As recent moments like the Gemini 2.5 Pro launch and Cloud Next have shown, there’s incredible momentum across the company right now — 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, and so we’re making some changes to further reward top contributors, in all teams across the company.
First, we’ll increase the ratings distribution guidance we give to leaders for Outstanding Impact (O). This means more Googlers will have the opportunity to achieve that rating during annual reviews, and their bonus and equity award will be modeled using the O’s individual multiplier in 2026.
Second, we’re increasing the discretionary budget we give to managers so they can further reward high performers within the Significant Impact rating.
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. It’s important to note that Significant Impact will remain a strong rating — achieving it will still get you more than your target bonus.
The above changes are budget-neutral, and overall we’re continuing to invest in comprehensive and highly competitive compensation and benefits.
These changes apply to the end-of-year reviews and 2026 compensation planning.
John Casey”
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