Google CEO Eric Schmidt told all Google employees they can expect a 10 percent raise in the new year.

In an apparent move to stave off defections to competitors, Google announced it is giving all its employees a $1,000 cash bonus and a raise of 10 percent, according to a source familiar with the matter.

The raises, which take affect January 1, 2011, apply to all 25,000 employees at the Internet giant, according to an e-mail to employees penned by Google CEO Eric Schmidt and first revealed by Business Insider. "We want to make sure that you feel rewarded for your hard work," Schmidt wrote. "We want to continue to attract the best people to Google."

In addition to the raise and bonus, Google will move a portion of employees' bonuses into their base salaries, ensuring that they received the entire amount, Schmidt said in his e-mail:

I'm pleased to share some very, very good news with Googlers worldwide. But first let me say, on behalf of everyone on the management team, that we believe we have the best employees in the world. Period. The brightest, most capable group of this size ever assembled. It's why I'm excited to come to work every day--and I'm sure you feel the same way. We want to make sure that you feel rewarded for your hard work, and we want to continue to attract the best people to Google.

So that is why we've decided...to give all of you a 10% raise, effective January 1st. This salary increase is global and across the board--everyone gets a raise, no matter their level, to recognize the contribution that each and every one of you makes to Google.

There's more. 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. That's also effective January 1st. You'll be receiving an email shortly with further details about these changes to your compensation. And one last thing...today we're announcing that everyone will get a holiday cash bonus, too.

Googlers, you are what makes this company great, and our goal here is to recognize you for your contribution, in a way that's meaningful to you. Thank you for all that you do, and for making Google a place where magic happens.

Eric

A Google spokesperson said retaining employees was key to the company but did not elaborate. "While we don't typically comment on internal matters, we do believe that competitive compensation plans are important to the future of the company," the spokesperson said.

The move comes as Google grapples with a wave of high-profile defections to Facebook. Last month, Lars Rasmussen, one of the lead engineers behind Google Maps and Google Wave, announced he had left the Internet search giant for Facebook. Rasmussen told the Sydney Morning Herald that Facebook's offer was "much more compelling both financially and in terms of the work there."

At his new employer, Rasmussen joins former Googlers Bret Taylor, Facebook's chief technology officer, who was part of the Google Maps team, and Carl Sjogreen, now a product manager at Facebook, who was also involved with Google Maps.

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Steven Musil is the night news editor at CNET News. Before joining CNET News in 2000, Steven spent 10 years at various Bay Area newspapers. E-mail Steven.