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The Art of Firing: The Valve Way

Startups in today’s tech economy are constantly changing. Companies today are starting smaller, growing faster and pivoting more than they ever have before. Of course, startup culture isn’t a great fit for everyone. Employees that cannot meet their deliverables or uphold company culture just have to be let go. One of the less happy results of high-speed growth tactics (like organizational scaling and hiring sprees) is that startups have higher employee turnover and termination rates than more established companies do.

Traditional HR models can seem a little outmoded and unhelpful to modern startups. Even if firing team members is more common for startup leadership and HR departments, it isn’t any less tricky. In fact, sometimes it’s a little trickier. Of course, the same issues of legality and employee resentment arise. But modern startups are built on a certain culture and demand a highly specific creativity. Team members have to share that “do or die” attitude that keeps the company and the big idea behind it afloat. So, how can a startup legally and clearly communicate these expectations to employees? And when and how can a team leader signal when someone is not meeting these expectations?

OnlineMBA’s latest video examines one progressive new approach: the peer-driven HR department of the gaming software startup Valve. Valve approaches its HR decisions as a team. The team is assured that no one will be let go for the wrong reason. Expectations are clear and employees are notified as soon at the first sign of underperformance. And before someone is terminated, employees consider the decision together. Check out the video and consider how a team-driven model could be applied in your own workplace.


Video Transcript

Valve, the video game software company responsible for popular games like Portal, Half-Life, Left 4 Dead, and many more– is a go-to source for how to hire and keep awesome employees. Their progressive handbook is all about empowering employees with the tools they need to make amazing things happen. However, the less than pleasant side of building the perfect team is firing – if someone is a bad fit, they’ve got to go. Here’s how Valve masters the art of firing:

  1. Peer-Driven: Just like everything at Valve, a termination decision is made as a team. The Valve employee handbook has a section titled “Welcome to Flatland” introducing the non-existent hierarchy at the company. In this same sense, firing decisions are made by a panel of employees who have firsthand knowledge of how the employee in question isn’t fitting in. This teamwork style decision making ensures no one is fired just because they rub one person the wrong way – but instead terminations happen for legitimate reasons.
  2. Set Expectations so there are no Surprises: Valve built its company on employee self-direction. Employees pick their projects and make business decisions about what to move forward with every day. Because employees have so much independence, they can’t blame anyone else for their short-comings, therefore, when termination day rolls around, no one will be surprised and instead it will simply seem like the best decision for the company.# If someone isn’t meeting the set expectations, start documenting these cases early on so you have a paper trail of the decision for legal purposes.
  3. Don’t forget the feelings: While standard firing advice should be taken to heart such as not apologizing and not asking about the family, don’t forget there’s no one size fits all approach to letting someone go. Even Valve admits they should have included a firing section in their handbook, but it’s a process too hard to put into words. Instead, handle each termination based on the individual situation while always remaining professional and compassionate.


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