New Delhi, May 6: Amazon is said to be making changes in its compensation model, with a focus on giving better rewards to those who consistently perform well. As per reports, the company plans to increase compensation for high-performing employees, while reducing the amount paid to workers who do not meet expectations.

The move can be seen as a part of a larger shift seen across the tech industry, where major companies are focusing top performance and tighter cost control. As per multiple reports, other technology firms like Google, Microsoft, and Meta have adopted similar strategies for performance-based pay. TCS Rolls Out Full Quarterly Variable Pay to 70% of Employees Based on Performance.

These companies are reportedly bringing stricter review processes and are offering lower rewards to underperformer employees. As per a report of Business Insider, which referenced an internal guidelines, which suggest that Amazon is making changes to its compensation structure to acknowledge and reward employees who consistently perform well over the long term.

Amazon Salary Structure

Amazon takes several factors when deciding on employee compensation, with a focus on performance ratings, referred to internally as "Overall Value." Employees are reportedly categorised into five performance levels, which include Top Tier (TT), Highly Valued 3 (HV3), Highly Valued 2 (HV2), Highly Valued 1 (HV1), and Least Effective (LE).

Amazon employees who achieve a "Top Tier" performance rating for four years in a row is said to receive 110% of their designated pay range, which is higher than the standard limit. As per reports, those who receive the Top Tier rating for the first time will now receive 70% of their pay band, a decrease from the 80% they would have received last year. The internal pay guideline said, "this approach ensures a steadier compensation progression," referring to the company's total compensation target (TCT) metric. TCS Q4 Results-Hiring Updates: Tata Consultancy Services Adds 625 Employees in Q4 of FY25, Reverses Workforce Decline From Previous Quarter.

A spokesperson from Amazon reportedly said that the revised model “better distinguishes” individuals who regularly exceed expectations. “As always, employees' contributions drive the outcome of their annual compensation review,” the spokesperson added. “What’s different this year is that our approach to compensation changes now better distinguishes between newer high performers and those who have consistently exceeded expectations for their role and level.”

(The above story first appeared on LatestLY on May 06, 2025 03:43 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).