LinkedIn is overhauling employee bonuses, memo shows

LinkedIn Illustration by Klaudia Radecka/NurPhoto via Getty Images LinkedIn is changing how it awards employee bonuses.

Bonuses in 2027 will be based solely on individual performance, instead of 50% company performance.

Major tech companies have been ramping up performance pressure on employees.

LinkedIn is overhauling how it awards annual corporate bonuses, according to an internal memo viewed by Business Insider.

The Microsoft-owned professional social network currently awards bonuses as a combination of company performance (50%) and individual performance (50%).

Starting in 2027, employees' end-of-year bonuses will be based solely on their individual performance during the fiscal year.

"At Linkedin, we believe you should be recognized and rewarded for the impact you make," the memo states.

"That's at the heart of our pay-for-performance philosophy, and our bonus plan is an important part of how we recognize and reward you for your contributions." Bonus targets will remain unchanged and the new policy excludes employees with sales quotas.

"We're updating our bonus plan to create a more direct connection between individual performance and bonus payouts," a LinkedIn spokesperson said.

The change shifts compensation away from a model in which employees shared in the company's financial success and gives managers greater influence over bonus decisions to incentivize top performance.

Other major tech companies have been ratcheting up performance pressure on employees by tying more compensation to individual performance.

Some of these changes offer bigger rewards to top employees while tightening expectations for those who fall short.

LinkedIn's parent company Microsoft has this year overhauled its performance review system, making performance distinctions significantly sharper.

The bonus change follows a period of cost-cutting at LinkedIn.