Google's 10% salary increase and $1000 cash bonus may be part of "competitive compensation plans" seen by the company as vital for its future. Google's move is now seen as a way to keep its employees from being poached by competitors like Facebook.

Business Insider earlier reported that Google gave its employees a $1000 tax-free cash holiday bonuses and a minimum of 10% salary increase set to be implemented starting January 1, 2011 accross all Google offices. These so-called merit increases will be gauged on each employee's performance. The news was purely internal but it was leaked to the public by a reader of the Business Insider.

Google is yet to officially deny or confirm the news but a spokesperson from Google was quoted by Techcruch, as saying, "While we don't typically comment on internal matters, we do believe that competitive compensation plans are important to the future of the company."

With competitors like Facebook luring its Google employees with stock options, Google's salary increase and cash bonus may be seen as its latest move to plug the brain drain it currently suffers. Afterall, there is plentiful of opportunities outside Google, with job postings in the IT industry increasing by as much as 69% more since last year, according to GigaOm's Om Malik.

"We've heard from your feedback on Googlegeist and other surveys that salary is more important to you than any other component of pay (i.e., bonus and equity). To address that, we're moving a portion of your bonus into your base salary, so now it's income you can count on, every time you get your paycheck," said CEO Eric Schmidt in the internal e-mail posted in the Business Insider.

Piaw Na, who claimed to be a former worker at Google, said that Google's actions to move portion of bonus to Google worker's base salary is "to make the shift from compensation-at-risk to compensation-in-salary a bit easier to swallow."

"There's also been recent signs that Google's been underpaying employees. Given the red-hot employment market for highly sought after talent in the Bay Area today, a 10% adjustment does not sound unreasonable, and may well be made up by the smaller stock grants and annual bonuses that can now be handed out," said Piaw Na in a forum at Quora.com

But the cash bonus and salary increase may not be something new, all though a 10% across the board raise is remarked by one former Google employee as "unusual." In previous years, Google had handed our G1 and Nexus to its employees.