Valve_Handbook_LowRes

Valve pays people very well compared to industry

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Unformatted text preview: r if you do so often, and outside the constraints of official peer reviews. When delivering peer review feedback, it’s useful to keep in mind the same categories used in stack ranking because they concretely measure how valuable we think someone is. Stack ranking (and compensation) The other evaluation we do annually is to rank each other against our peers. Unlike peer reviews, which generate information for each individual, stack ranking is done in order to gain insight into who’s providing the most value at the company and to thereby adjust each person’s compensation to be commensurate with his or her actual value. Valve pays people very well compared to industry norms. Our profitability per employee is higher than that of Google or Amazon or Microsoft, and we believe strongly that the right thing to do in that case is to put a maximum – 27 – HOW AM I DOING? Fig. 3-1 Method to working without a boss 1. 2. 3. 4. amount of money back into each employee’s pocket. Valve does not win if you’re paid less than the value you create. And people who work here ultimately don’t win if they get paid more than the value they create. So Valve’s goal is to get your compensation to be “correct.” We tend to be very flexible when new employees are joining the company, listening to their salary requirements and doing what we can for them. Over time, compensation gets adjusted to fit an employee’s internal peer-driven valuation. That’s what we mean by “correct”—paying someone what they’re worth (as best we can tell using the opinions of peers). ================================================== If you think your compensation isn’t right for the work you do, then you should raise the issue. At Valve, these conversations are surprisingly easy and straightforward. Adjustments to compensation usually occur within the process described here. But talking about it is always the right thing if there’s any issue. Fretting about your level of compensation without any outside information about how it got set is expensive for you and for Valve. ================================================== step 1. step 2. step 3. step 4. Come up with a bright idea Tell a coworker about it Work on it together Ship it! VA LV E M E THOD D IA G . 3 The removal of bias is of the utmost importance to Valve in this process. We believe that our peers are the best judges of our value as individuals. Our flat structure eliminates some of the bias that would be present in a peer-ranking system elsewhere. The design of our stack-ranking process is meant to eliminate as much as possible of the remainder. – 29 – V ALVE: H ANDBO O K FO R NEW EMP LO YEE S Each project/product group is asked to rank its own members. (People are not asked to rank themselves, so we split groups into parts, and then each part ranks people other than themselves.) The ranking itself is based on the following four metrics: 1. Skill Level/Technical Ability How difficult and valuable are the kin...
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