Gabe Newell may be Valve's CEO, but that doesn't mean he's the "boss." According to the company's "economist-in-residence," Yanis Varoufakis, Valve does not use managers to ensure productivity, but instead allows its employees as a "community of partners."
What does that mean exactly? Speaking on the Econtalk Podcast, Varoufakis explained that decisions about hiring, firing, and how much an employees gets paid, is decided by a panel of employees from the company at large. Though these processes vary, the one overarching factors arre that everything moves quickly, organically and, for lack of better word, casually.
When a Valve team decides they need to hire someone, they invite everyone in the company to help them form an impromptu recruitment committee, who then all begin holding preliminary interviews. If they make it to the second, face-to-face interview, then the whole search committee gets focuses on that person. The key thing here is that at no point is anyone a simple advisory or leadership role: everyone agrees or it doesn't happen.
Once they hire somebody, then somebody need to figure out how much to pay them. Salaries are determined by peer reviews because Valve's pay structure is based on low salaries and massive bonuses: "In companies like Microsoft or elsewhere, usually the bonus is something between 8, 15, 20 percent of the basic salary," says Varoufakis. "In Valve, I'm told, there's no upper limit to bonuses. Bonuses can end up being 5, 6, 10 times the level of the basic wage."
Firing an employee, while more subtle, is surprisingly similar. While hiring employees gets crowdsourced, firing an employee is handled by the people surrounding that person. The process generally kicks into gear when one or more people notice the person isn't meeting expectations. "If it seems there is no way that a consensus can emerge that this person can stay, some attractive offer is made to the particular person, and usually there's an amicable parting of ways." According to Varoufakis, many people get fired, not because they aren't able to accomplish their jobs, but rather because they simply can't meet their potential in a boss-free environment.
Valve has become well-known for its distinctive corporate practices. Though conventional wisdom would say that an egalatarian workplace should fall apart, it's somehow translated into some of the gaming industry's most successful products and services. Varoufakis says the system works because everyone at the company "hand-picked to be excellent at they do." Put it another way, Valve is a Utopia for workaholic designers and programmers.
(Via Gamasutra)
