Google is making key changes to its performance review and compensation system. The aim is to reward top-performing employees more generously. In an internal email titled “Strengthening our performance culture,” John Casey, VP-global compensation and benefits, Google, outlined the new approach that will take effect in the 2026 compensation cycle.
The revised structure allows managers to assign the sought after “Outstanding Impact” rating to more employees than before. This rating, part of Google’s annual GRAD, short for Googler Reviews and Development system, determines how bonuses and equity are distributed. By widening access to this top tier, Google hopes to motivate more employees to aim higher and perform beyond expectations.
The changes will apply during end-of-year reviews and influence 2026 compensation packages.
Alongside this change, Google will boost the discretionary bonus budgets for managers. This will enable them to give better rewards to high performers within the “Significant Impact” rating — currently the category maximum number of Googlers fall into. However, to fund these incentives without increasing overall costs, the company will slightly lower the bonus and equity multipliers for those in the “Significant” and “Moderate Impact” brackets.
Casey emphasised that these adjustments are “budget-neutral” and part of a strategy to reinforce a culture of excellence without cutting back on overall compensation competitiveness. The email also noted that “Significant Impact” remains a strong rating, still eligible for above-target bonuses.
The tech industry has been witness to giants such as Meta and Microsoft also emphasising performance-driven cultures. While Google hasn’t resorted to major layoffs, this revamped rating system is designed to push employees to strive for excellence and better align rewards with impact.