Economist Yanis Varoufakis details how the studio with no managers handles employees
One of Valve's more recent and high-profile hires has spoken about how the studio handles its employees.
The company behind Half-Life, Portal, and the world's largest PC digital distribution platform turned heads last year when it released its employee handbook to the public.
The handbook detailed how the company operates without managers, with employees free to do what they think is best for the company.
Earlier this month however, Valve fired a reported 25 staff, with director of business Jason Holtman also one of those to leave the firm.
Speaking with Gamasutra, economist Yanis Varoufakis explained how Valve hires, fires, and determines the pay of its staff.
"The way it works is very simple," said Varoufakis of the hiring process.
"Let's say you and I have a chat in the corridor, or in some conference room, or wherever. The result of this chat is that we converge to the view that we need an additional software engineer, or animator, or artist, or hardware person. Or several of them.
"What we can do is, we can send an email to the rest of our colleagues at Valve and invite them to join us in forming a search committee that actually looks for these people without seeking anyone's permission in the hierarchy, simply because there is no hierarchy."
Since the primary goal of Valve's flat structure is a flexible team that works well together, the staff are free to take part in the process.
"And then we form spontaneously the search committee, and then we interview people, first by Skype, and then we bring them in - if they pass the test - to the company for a more face-to-face personalized interview. And anyone who wants to participate does participate," he said.
Although layoffs can happen at any company, the recent firing of several Valve employees came as a surprise since the Valve manifesto said such events were quite rare.
How does a company that claims to make its decisions as a team let go so many members?
Varoufakis didn't explain why so many at Valve were let go, but he did comment briefly on how it would happen in general.
"It does happen. I've seen it happen. And it's never pretty," he said.
"It involves various communications at first when somebody's underperforming, or somebody doesn't seem to fit in with the rest of the company.
"In many occasions people simply don't fit in not because they're not productive or good people, but because they just can't function very well in a boss-less environment."
Perhaps the hardest part of this process for those outside the company to swallow is that just like hiring, firing is a decision made by the team.
"And then there are series of discussions between co-workers and the person whose firing is being canvased or discussed," explained Varoufakis. "And at some point 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."