Google and Amazon are moving to more generously compensate top performers at their organizations, according to a pair of recent reports from Business Insider.
The decisions reflect a broader desire among corporate leaders to drive productivity, often while dealing with reduced headcount and compensation budgets.
But employees are more attuned than ever to compensation trends in today’s environment of heightened transparency, and may feel discouraged if their company moves the goalposts on pay or performance. That’s why HR teams considering shakeups to their performance review processes need to clearly communicate their rationale for doing so, experts told HR Brew.
Big tech sweetens bonuses for top performers. Google will give more staff the opportunity to achieve one of the highest performance ratings in its reviews, according to an internal memo published by Business Insider on April 29.
The company will put more of its discretionary budget toward compensating high performers, while “slightly reducing the bonus and equity” allocated for lower-performing employees, said John Casey, Google’s VP of global compensation and benefits.
Amazon is also revising its compensation structure by increasing rewards for employees who have received the top possible performance rating for four consecutive years, the outlet reported on May 5. These long-standing top performers will receive pay equivalent to 110% of their position’s pay range, while those receiving Amazon’s top rating for the first time will be eligible for compensation equal to 70% of their role’s pay band, down from 80%.
An evolving approach. Against the backdrop of these changes to big tech firms’ compensation structures, CEOs are increasingly focusing on cost optimization and productivity, said Brent Cassell, VP, advisory with research firm Gartner.
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The share of CEOs surveyed by Gartner who identified “growth” as a topic strategic priority for 2025–2026 dropped by 9%, while those who identified financial considerations like cost containment as a top priority increased by 24%. This shift “does reflect a need to do more with less,” Cassell said.
Research also suggests that paying top performers more generously relative to lower-performing peers “does have a positive impact” on organizations, he added. The question HR professionals must consider when they set the bar for employees with the highest ratings, then, is “how big is too big, or how big is big enough?”
Should employers decide to make changes to their performance management and compensation processes, it’s important they communicate why, Cassell said. If employees aren’t prepared for the change, “that can be a trust-breaking moment. And when that trust is broken, we know that that harms engagement and intent to stay,” he said.
HR leaders have had to contend with a “wacky job market” over the past few years, said Tanya Moore, chief people officer and partner at business and technology consulting firm West Monroe. They led teams through a historically tight labor market—where workers were demanding “incredibly high compensation packages”—only to face a slowdown that spurred many employers to pull back on pay and promotions.
West Monroe pivoted to a pay-for-performance model after Moore joined the firm two and a half years ago, with workers who are outperforming their peers eligible for additional compensation. She said the company made the shift in response to employees who expressed interest in being “better differentiated” for their performance and pay.
