Higher risk of low performance ratings in 2023

Alphabet and Google CEO Sundar Pichai during a press conference at the German Chancellery in Warsaw, Poland, on March 29, 2022.

Mateusz Wlodarczyk | Nurphoto | Getty Images

According to internal communications from CNBC, more Google employees will be at risk of poor performance reviews, and fewer employees are expected to achieve good grades under a new performance review system that begins next year.

In a recent Google At the all-hands meeting and in a separate presentation last week, executives provided more details on the new performance review process. Under the new system, Google estimates that 6% of full-time employees will fall into a low-ranking category that puts them at higher risk for corrective action, up from 2% previously. At the same time, it’s getting harder to get good grades: according to Google projects, 22% of employees are rated in one of the top two categories, up from 27% previously.

For example, to be included in the new, top-scoring category, “Transformative Impact,” an employee must have “achieved the near impossible” and “contributed more than we thought possible.”

Earlier this year, Google announced the new process for performance reviews, known as Google Reviews and Development, or GRAD.

But CNBC recently reported that employees were complaining about procedural and technical issues at GRAD just before the year-end deadlines, making them concerned they won’t be accurately evaluated. Fear is compounded by a wave of layoffs in the tech industry. While Google has so far avoided the widespread job cuts that have hit other tech companies like MetaEmployees have become concerned if they might be next.

At a December meeting on the matter, employees expressed frustration at executives who have long advocated transparency but don’t provide direct answers to questions about headcount. Some employees believe the new performance appraisal system could be a way for the company to reduce headcount.

Headcount was a topic that occupied employees in the second half of 2022. CEO Sundar Pichai found himself on the defensive in September as he was forced to explain the company’s changed position after years of rapid growth. Executives at the time said there would be small cuts, and they didn’t rule out layoffs.

And in November, in an all-hands meeting, a number of employees asked for clarification on executives’ plans for headcount, even asking if executives had mismanaged headcount when Google grew its headcount by 24% in the third quarter of 2022 increased over the previous year.

As of the third quarter, the company employed 186,779 full-time employees. It also employs a similar number of contractors.

Recent documents on the GRAD also say the company will review bonuses, salaries and equity and expects to “spend more overall per capita on compensation.” It also says the company still plans to pay within the top 5% to 10% of market rates.

Google did not immediately respond to a request for comment.

“Much Pain and Anger”

At the company’s most recent all-hands meeting on Aug. 8, many of the top-scoring questions described stress surrounding the year-end performance review, according to audio of the meeting made available to CNBC. The questions also indicate that some employees do not trust that management is transparent about the number of employees.

“Why did Google push support check-in quotas to frontline managers days before the deadline?” an employee asked in a question read by Pichai. “I’ve been through a lot with Google in 5+ years, but this is a new low.”

“It seems like a lot of last minute support check-ins were forced through part of Cloud to meet a quota, which caused a lot of anger and annoyance,” asked another employee. “With only two weeks to the correct course, how is this helpful feedback? How can we prevent this in the future?”

“The support check-in process is confusing and is increasingly becoming a source of stress and anxiety for Googlers, particularly given the current economic climate and rumors of layoffs,” was another high-level employee question.

Earlier this month, CNBC reported that employees received “support check-ins” in the last few days before year-end, often associated with lower performance ratings. They also said executives had changed parts of the process in recent days.

“I know it’s been bumpy,” Google’s chief people officer Fiona Cicconi finally said, briefly acknowledging the problems with GRAD in a recent all-hands meeting.

“It’s not ideal to have support check-ins this late in the review cycle, and we know it takes time for people to absorb and act on the feedback,” Cicconi acknowledged, adding that “Googlers spend a lot of time should have to find out. Correctly.”

Several employees also asked executives if they had quotas for placing people in lower performance categories to reduce headcounts in 2023. Although executives said they don’t have quotas, employees didn’t seem to be persuaded.

One question asked executives if Google was becoming a “stack ranking company like Amazon” and referred to the process of using quotas to categorize employees into specific performance bands.

“Uncertainties surrounding GRAD processes have put severe pressure on lower-level managers to share information” about performance reviews and sometimes enforce “conflicting points,” reads another highly voted question.

Another reading: “Layoffs across the industry has been an issue affecting Googlers, causing stress, anxiety and burnout,” another reading. There have been no official announcements on this, which raises even more concerns. When will the company address this deal with the topic?”

But executives largely avoided answering the questions directly. CEO Sundar Pichai kept saying he “doesn’t know what the future holds”.

“We’ve tried really hard to prioritize where we can so we can better weather the storm, regardless of what lies ahead,” Pichai said. “We really don’t know what the future holds, so unfortunately I can’t make any forward-looking commitments, but everything we’ve planned as a company over the past six to seven months has taken all the hard work of trying to find our way to go through as best I can, that’s all I can say.”

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