Nestlé announces a new performance evaluation system

Times are changing at Nestlé. The world’s biggest food group has introduced a fresh strategy for measuring performance and determining the cream of the crop. The new system offers large bonuses for high performers and little to nothing for the lowest performers in an updated six-tier structure. Top employees could see payouts rise to 150% of their target, while those receiving an “unsatisfactory” rating will receive between 0% and 50% of the target.

The big picture: Nestlé is in the throes of a grand turnaround plan led by new CEO Philipp Navratil (a longtime employee appointed to the top job in September 2025 in the aftermath of a scandal involving his predecessor) to arrest declining sales. He swiftly announced plans to axe 16,000 jobs over the next two years, refocus on core businesses (coffee, pet care, nutrition, food and snacks), and off-load underperforming units.

For a business with over 270,000 employees and a sprawling portfolio as diverse as Nespresso, Toll House cookies, and Purina (for pets), that was no small feat. Full-year sales for 2025 came in at 89.5 billion Swiss francs (~$116 billion), down 2% YoY. Net profit dropped 17% in the same period. The report was compounded by a global recall of some baby formula products in January over concerns of potential contamination.

The backdrop: Performance and incentive management has been a hot topic for us at Revenue Brew of late, especially as organizations contend with an uncertain economic backdrop. Xactly’s 2026 “State of Sales Compensation” report shows some companies are betting on a smaller group of sellers to hit targets. For example, account executives with one to three years of experience have seen OTE decline across all percentiles since 2021, while AEs with five or more years gained an average of $26,000.

As we outlined here, incentive compensation is becoming more pivotal to get right and much harder to perfect.