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Valve Employee Handbook Leaked, Provides Further Insight

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Last week, I wrote an article regarding Michael Abrash, a Valve employee whose blog post divulged the company's interest in wearable hardware, while detailing the unique culture of Newell & Co.'s HQ. Declaring that "Valve is different," Abrash painted a picture in which there were no bosses - in fact, no rigid hierarchy of any sort - a prevailing culture of creativity (including the freedom to take on or abandon projects at will), and a workforce comprised of members that were accountable directly to one another, rather than a permanent superior. Newell elaborated on this during an interview with Bloomberg, influenced by id Software's success with Doom. During his time with Microsoft, Newell discovered that the shareware version was the most popular piece of software on PC, more so even than Windows. Inspired by the notion that a company outside of the normal, corporate architecture could achieve such success, he sought to pursue a less rigid, more collaborative kind of company than was the status quo.

More interesting is the release of Valve's employee handbook, which gives a rather lengthy overview of the company's environment, strategy, and general philosophy about cooperative work. Its release found itself through an unlikely source: After Newell mentioned the handbook on a podcast, Valve was contacted by a listener, who requested a copy. Valve designer Greg Coomer obliged, and soon the document was posted online. Some of this will be familiar for those who have read Abash's post (or yours truly's article on said post), but for those curious about the full story, find out more after the jump!

The handbook (available for download at this link) corroborates a good deal of Abrash's account, including descriptions of a decentralized, self-managing workforce. From page 4:

Hierarchy is great for maintaining predictability and repeatability. It simplifies planning and makes it easier to control a large group of people from the top down, which is why military organizations rely on it so heavily. But when you're an entertainment company that's spent the last decade going out of its way to recruit the most intelligent, innovative, talented people on Earth, telling them to sit at a desk and do what they're told obliterates 99 percent of their value. We want innovators, and that means maintaining an environment where they'll flourish.

The company's pay scale also takes the "peer review" approach. Rather than stratified wages - i.e. a manager making more than a level designer - pay is determined by one's "stack ranking." Numerous categories are considered, such as one's technical prowess, efficiency (rather than simply putting in more work hours than one's peers), how well one aids the group of his or her choosing, and how well one's actions leads to the given project, among other factors. The higher one's stack rating, the higher one's "value" to the company - and consequently, the higher one's pay. In short, it's an ever-changing meritocracy, as opposed to giving financial rewards according to one's set job description, or increasing pay simply because of continued employment.

The handbook discusses the desire for "T-shaped" employees: those that have a particular area of expertise, while possessing a broad enough array of knowledge to fit a variety of roles. Since employees are encouraged to decide how best to apply themselves to a particular project, having a diverse skill set - or at the very least, having the intellectual and creative curiosity to educate oneself about an unfamiliar role - is highly desired.

Still, the system is not without its flaws. Introducing new hires to the Valve environment isn't always a graceful affair: Employees are expected to be self-driven and adaptable; thus, there is little in the way of conventional "mentoring." Moreover, one is faced with the problem of supervision. The handbook notes that due to a lack of conventional management structure, problematic employees can become deeply embedded in a project before they are identified, thus causing long-term damage to the company. Speaking with Joystiq after his "brony" confession, Gabe Newell recalled a particularly unpleasant episode.

On Half-Life 2, one of the engineers made a bunch of really bad decisions [...] here was no monitoring system along the way so it took us about six months longer than it should have for us to catch it. It cost everyone on the team a whole bunch of extra work.

Lastly, due to the spontaneous, self-assembling nature of project teams, long-term planning doesn't always work out. I'm not going to point any fingers, but let's just say we can all expect Half-Life 2: Episode 3 to be available for download sometime between "when the moon turns to blood" and "giant scorpions crawling up from the fiery abyss, heralding the ascent of Lord Lucifer; a shroud of ash slowly dissipating, to reveal a throne made from the skulls of traitors and blasphemers" o'clock.

So what do you think, gamers? Is the handbook a brilliant, forward-thinking guide to employee relations, or is this collectivist hogwash, birthed from the mind of some tech-savvy Karl Marx? Sound off in the comments section below!

3 Comments

jmerriex said:

A lot of this sounds REALLY good on paper, but in practice it does get... murky. I can definitely now understand why my dealings with the company on a professional level have always been... difficult and drawn out.

But, at the same time, you cannot deny they are really good at churning out very stellar and original products. My wonder is, how long until someone exploits their clear weakness. Companies are already trying and it seems to me that Valve isn't really trying to combat that.

I guess we'll have to wait and see.

BJD said:

A brave and wonderful change from the usual corporate HR drivel, which is all about what you can't do and leaves one feeling cold. Similar to the thinking of Ricardo Semler, just with more fun, pictures and company holidays!
The main difference with Valve and most other development houses is the fact they are internally funded, so can focus on quality rather than rush products out the door to please shareholders. This isn't available to everyone, but it will be interesting to see what impact Kickstarter funding will have on other companies, where the end consumer can be directly funding a project, driven by passion rather than profit.
In the mean time, well done (again) Valve.

Lucas said:

Without reading all the fine print, my first impression is...brilliant. Let's see whether they sink or swim. If it works well, other companies may follow suit.
The lack of managerial oversight may cause a problem. However, even managers can be incompetent. And even in traditional workplaces with a pyramid structure, it can be EXTREMELY difficult to get rid of a bad hire, for legal reasons. So getting rid of bad employees is a problem with or without oversight.
But, I am no HR expert, and have little knowledge of business admin.

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