Polarization grading in AlGaN/GaN-based high-electron-mobility transistors (HEMTs) is a promising device design option that can improve linearity, speed, power, and noise performance for use in millimeter-wave applications. This work investigates the potential of compositionally graded HEMT heterostructures to enhance device breakdown through lateral electric field engineering while maintaining a high device cutoff frequency (f(T)) due to reduced longitudinal optical (LO) phonon scattering. The impact of polarization grading on electric field profile is compared with conventional gate-integrated mini-field plates (mini-FPs). It is also observed that polarization grading can augment the efficacy of gate-connected FPs, further enhancing performance. Using physics-based 2D device simulations, it is demonstrated that polarization engineering via polarization grading enhances breakdown (V-BD) while preserving high f(T), resulting in a Johnson's figure of merit (JFOM = f(T) x V-BD), that is, approximate to 2.4x that of a conventional abrupt-junction HEMT. This improvement represents a significant advancement over the approximate to 1.25x to approximate to 2x increase achieved with the use of mini-FPs alone in HEMTs.