Valve

Valve is a leading video game developer and distributor. Once a year, a designated group of employees (the group changes every year) interviews everyone in the company, asking for feedback on each individual that person has worked with over the past year (this information is used primarily for constructive feedback) and asking the employee to rank each member of his own project/product group on the following four metrics:

• Skill level/Technical Ability
• Productivity/Output
• Group Contribution
• Product Contribution

Each of these metrics is given equal weight in compiling a stack ranking of all the employees in a given group. Once the intra-group ranking is done, the information gets pooled for the company as a whole and is used to determine compensation. The system is based on a belief that these four metrics are the most appropriate for determining the "correct" compensation and that they in turn are best determined through a peer-based valuation process (which the company believes is less likely to be subject to bias given its flat organizational structure).^[1]

Valve is a leading videogame developer and distributor. According to their employee handbook, "When you give smart talented people the freedom to create without fear of failure, amazing things happen.^[2]

At Valve, employees are not told what to do but rather are expected to work on what they believe to be of most value to the company. Valve acknowledges that "deciding what to work on can be the hardest part of your job" and advises employees to ask themselves questions such as "Of all the projects currently under way, what's the most valuable thing I can be working on?" and "What's interesting? What's rewarding?" What leverages my individual strengths the most?"

As a result, most of the work at Valve is accomplished via self-organized, temporary, multi-disciplinary project teams called "cabals". They form organically as people decide to join a group based on their belief that the group's work is important enough for them to contribute their skills. Often someone will emerge as the "lead" on a project. However, their role is not to manage the team in a traditional sense but rather to act as a kind of information clearinghouse. By having an understanding of the whole project, they can act as a resource for team members to check decisions against.^[3]