Valve’s in-house economist on how Valve hires, fires and pays its staff


As a workforce Valve operates much like a swarm of magic bees or a flock of industrious birds, with no single employee deemed more important than any other, and no managers or bosses directing teams of subservient underlings. Valve’s Handbook for New Employees describes the uniquely flat structure of the company, which has served the developer throughout the conception and release of some of the most celebrated PC games in history. So the method works, but it’s not without its quirks. As reported by Gamasutra, Valve’s in-house economist Yanis Varoufakis revealed to the EconTalk podcast details of how Valve hires and fires members of the team. As well as how they decide who gets paid what.

As expected, Valve is some sort of socialist wonderland, with self-motivatedteams spontaneously collaborating and shifting desks around and combining andmorphing into development Mechazords. Desks are on wheels, which means anybody can sidle on up alongside whatever project they’re most needed on, or whichever one looks most personally interesting to them. Oh, and they’re all paid loads of money.

“In companies like Microsoft or elsewhere,” Varoufakis revealed,”usually the bonus is something between 8, 15, 20 percent of the basic salary. 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.”

When it comes to hiring staff, first the decision is naturally and mutuallyreachedthat a certain kind of skilled person is required, before a company-wide invitation is issuedto spontaneously form a hierarchy-free talent scouting search committee. Interviews are first carried out over Skype before candidates are brought in for face to face meetings. The decision to hire is a day-long event in which emails are bounced around the company until a consensus is reached and no single employee decides to veto the decision. Just how bees hire people.

As expected, firing people is made more awkward than usualwhen subjected to this crowdsourcing approach, as to be sacked from Valve is effectivelyconfirmation that not one person at the company really wants you to continue working there. “It does happen. I’ve seen it happen. And it’s never pretty,” says Varoufakis. “It involves various communications at first when somebody’s underperforming, or somebody doesn’t seem to fit in with the rest of the company.”

More often than not, according to the economist,it’s an inability to operate underthe boss-less structure of Valve that leads to firings at the company, rather than incompetence or stationery-theft.

Go listen to the podcast or read the Gamasutra piece for a fuller look at the phenomenon of”spontaneous order” at Valve.

Full disclosure: the last bonus I got was for £15 and if I ever tried to move my desk I thinkit would collapse back into its constituent IKEA parts.