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Google is revamping its employee performance review system, with changes set to take effect for end-of-year reviews in 2025 and compensation planning in 2026, according to Business Insider.
The revised system, part of Google’s GRAD (Googler Reviews and Development) program, aims to better reward high achievers. The GRAD scale ranges from “Not Enough Impact” to “Transformative Impact.”
While most employees typically receive a “Significant Impact” rating, the updated framework allows managers to give the higher “Outstanding Impact” rating to more people. This enables increased bonuses and equity awards for those top-rated performers.
To further support this focus on performance, Google is giving managers more flexibility within their budgets to provide larger rewards even to those rated “Significant Impact.” However, the overall changes will remain budget-neutral. In other words, funds for top-tier bonuses will come from slightly reduced rewards for those in the middle-performance range.
Although “Significant Impact” remains a strong rating, bonus multipliers for it and for the lower “Moderate Impact” category will be slightly scaled back. Google says this reallocation ensures competitive compensation, especially for top contributors, while keeping the company within its overall pay targets.
Google’s decision aligns with a growing trend among tech companies, where companies like Microsoft and Meta are also tying compensation more closely to individual performance in an effort to drive productivity.
