TikTok’s parent company, ByteDance, is preparing a major overhaul of its employee compensation strategy, with plans to sharply raise bonuses and increase cash-based rewards for high-performing staff in 2026. According to an internal memo cited by Business Insider, the company intends to expand its global incentive pool by 50 per cent compared to last year, underlining its focus on retaining key employees and attracting fresh talent during a period of corporate and regulatory change.

The additional compensation will be distributed through ByteDance’s annual performance review cycle, with the biggest gains reserved for employees who score highly on the company’s rigorous internal evaluation system. In the memo, ByteDance described the move as an effort to “meet the moment,” as the broader technology sector navigates uncertainty, restructuring, and heightened competition for skilled professionals.

Importantly, the bonus increase will not apply evenly across the workforce. ByteDance has made it clear that only employees who exceed defined performance thresholds will benefit from the enhanced payouts. The company’s review framework is known for its strict grading standards, and managers are reportedly encouraged not to shy away from assigning low ratings where warranted, even if it leads to internal friction.

This performance-first approach has been building for several years. In 2024, TikTok revamped its evaluation system to create a wider distribution of scores, discouraging managers from clustering most employees around average ratings. The upcoming bonus changes reinforce that philosophy by placing even greater emphasis on distinguishing top performers from the rest.

For 2026, ByteDance said it will invest 35 per cent more in bonuses for employees who receive an “M” rating, which signifies that they “consistently meet expectations,” or above. Those who earn an “E” rating for “exceeds expectations” are expected to receive even more substantial rewards, further strengthening the link between individual performance and compensation.

One of the most notable changes is a shift in how bonuses are paid. A larger portion of incentives will now be delivered in cash rather than stock options. This adjustment comes as ByteDance prepares to spin off part of TikTok’s US operations into a new joint venture, a move that has introduced uncertainty around the future value and liquidity of employee equity. As one employee told Business Insider, the increased focus on cash payouts is likely to resonate with staff who prefer immediate and predictable rewards.

Beyond bonuses, ByteDance is also restructuring its workforce model. The company plans to reorganise roles into 10 distinct job levels while simultaneously raising performance expectations at each stage. For employees who continue to receive equity, the vesting period will be reduced from four years to three, allowing faster access to shares.

These compensation changes arrive alongside significant corporate developments. TikTok recently informed its US workforce that part of its business will be spun off into a joint venture backed by investors including Oracle, Silver Lake, and MGX. The deal, expected to close in January, will still see ByteDance retain control over global operations such as e-commerce, advertising, and marketing, according to a memo from TikTok CEO Shou Chew.

Industry analysts view ByteDance’s move as a strategic effort to stabilise morale and prevent talent attrition during a sensitive transition. As tech companies worldwide rethink pay structures following layoffs and restructuring, ByteDance’s decision signals a clear message: top performance will be rewarded, and retaining the best people remains a priority even amid uncertainty.