Google Raises Employee Compensation As Part Of Performance Review Overhaul

Sundar Pichai, CEO of Google

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Google is revamping its performance review process, implementing changes that will lead to higher salaries, as the company tries to ease tensions between employees and management over compensation.

Starting this week, Google is using a new performance review process called GRAD, which stands for Google Reviews and Development. This is part of an effort to streamline the appraisal process, limiting reviews to once a year, instead of twice, and putting more accountability in the hands of managers rather than relying heavily on peer reviews, according to internal documents reviewed by CNBC.

“Under this new process, we expect the majority of Googlers to be modeled for a higher salary than under the old Perf system and the total amount paid will also increase,” one says. documents.

Google Search boss Prabhakar Raghavan reiterated the point at a public company meeting on Friday, according to two people with knowledge of the matter who asked not to be named because the information is confidential.

A Google spokesperson said in an email that the company had “nothing further to share.”

Employee compensation has been a hot topic at Google. In the annual Googlegeist survey, which CEO Sundar Pichai considers a key indicator of employee satisfaction, staff members gave Google particularly poor ratings on how compensation compares to compensation for similar jobs in other companies. Employees also lowered their ratings on the performance appraisal process and career growth opportunities.

The survey results were released in March and highlighted the challenges Google is facing due to the ‘Great Quit’, with workers quitting their jobs at a record rate and tech companies clamoring for talent

Google employees voiced their concerns directly to management, not just in the annual survey. At an all-hands meeting in December, Frank Wagner, Google’s vice president of compensation, answered questions about whether the company was providing a pay rise to deal with soaring inflation, especially since Google’s revenue had skyrocketed during the pandemic with stock market success hitting a record high in November.

Wagner said Google would not implement a general raise to meet inflation, even if executives received a Bosses salary.

Google is now making fundamental changes to how workers are paid and promoted. Under the new GRAD system, promotions will primarily be determined by management rather than a consortium of managers and peers. Employees, however, can still apply for promotions twice a year, according to the documents.

The company is also abandoning its long-standing practice of lengthy promotion packets, which were lengthy forms that employees had to fill out that included criticism from bosses and co-workers. Managers will make promotion decisions as a group instead of employees having to solicit them separately.

Google said in March it would attempt to make changes to its longstanding “perf” process, which has been replicated at other companies in the industry. The information previously reported some of the details of the changes to performance review.

Under the new system, Google employees will have a new tool to set expectations for goals, or objectives and key results (OKRs) as they’re called, according to an internal memo. Employees are also holding “regular check-ins” with their managers each quarter to discuss career development, among other things, pointing to documents, addressing a central complaint among workers.

For employee ratings, Google is introducing a new scale with five different levels.

Most staff will be in the middle, which “reflects the significant impact they are having”. The two ratings below the middle are ‘Moderate Impact’ and ‘Insufficient Impact’ and the two above are ‘Exceptional Impact’ and ‘Transformative Impact’ for those who ‘perform above or below this high standard’.

There is also a new promotion system. In it, an employee’s manager will complete a form assessing whether the person has demonstrated the skills required for elevation.

“Googlers are not expected to already perform higher-level work to verify that they are capable of succeeding at the higher level,” a document reads. It will however require a business need for the promotion.

“Googlers will then be considered for promotions if they indicate signals of success at that level of work,” the company said.

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