BUSINESS | WORKPLACE

Business Insider reports that LinkedIn is moving corporate employees to a bonus structure based entirely on individual performance beginning in fiscal 2027.

LinkedIn is changing how it calculates annual bonuses for corporate employees, according to exclusive reporting from Business Insider, which reviewed an internal company memo. The Microsoft-owned platform currently bases bonuses equally on company performance and individual performance. Beginning in fiscal year 2027, the company-performance portion will be removed and eligible corporate employees’ payouts will instead be determined entirely by individual performance. Bonus targets will remain unchanged, and the new formula will not apply to quota-carrying sales employees. Business Insider first reported the internal change.

The change moves LinkedIn away from a compensation model in which employees shared some exposure to the company’s overall performance. Under the existing system, half of an employee’s bonus calculation reflects LinkedIn’s results and half reflects the worker’s individual performance. Under the new structure, individual ratings will carry the entire weight of the employee-level calculation. LinkedIn told Business Insider that the change is intended to create a more direct connection between individual performance and bonus payouts.

That changes more than the arithmetic. When company performance contributes to a bonus, strong business results can lift payouts across a broader group of employees. A system based completely on individual performance places more weight on ratings, manager judgment and internal calibration. Employees working through the same fiscal year and contributing to the same company results can therefore see sharply different compensation outcomes depending on how their individual performance is assessed.

The shift also places greater financial value on workplace visibility. Employees have always had incentives to demonstrate impact, but a compensation formula centered entirely on individual performance increases the stakes around which projects get noticed, how accomplishments are documented and how managers differentiate workers during review cycles. The potential upside is clear for employees who receive strong ratings. The risk is that subjective elements of performance management can have a larger influence over take-home compensation.

LinkedIn’s move comes as major technology companies continue to tighten performance management and place greater emphasis on measurable individual contribution. Business Insider noted that the change follows broader performance pressure across the technology sector and changes inside LinkedIn’s parent company, Microsoft. Other outlets reporting on the BI disclosure have similarly characterized the shift as part of a wider move toward stronger pay-for-performance systems.

There is a broader labor story underneath the bonus formula. Companies increasingly want compensation systems that distinguish between levels of employee contribution rather than distribute rewards primarily around collective business results. That can make compensation feel more closely tied to merit, but it can also transfer more of the uncertainty around annual payouts from the company’s performance to the employee’s evaluation.

For workers, LinkedIn’s change reinforces a workplace reality that has been building for years: performance is not only about producing good work but about how that work is evaluated inside increasingly formalized systems. The company will still determine the size of the overall bonus pool, but beginning in fiscal 2027, the employee’s individual score will play the decisive role in determining how much of that pool reaches them. That turns the annual review into something more consequential than feedback. It becomes a larger part of the paycheck.