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Comment by jedberg | Hacker News Reader

Here's a question I've been trying to get an answer to for years. How does compensation at Valve work?

Like, what are the logistics? Their handbook talks about the stack ranking, but it doesn't talk about how that translates into an actual salary.

Who actually sets the salaries? If they have no bosses, who actually hands you the memo that says "this will be your salary next year". Who fills that out and writes down the number?

I assume someone somewhere has to attache numbers to the rankings, I'm curious about that process in a bossless environment.

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There's no doubt an HR and finance department. Why do you need a "boss" to hand you your bonus / raise?

The handbook offers a hint:

> Once the intra-group ranking is done, the information gets pooled to be company-wide. We won’t go into that methodology here. There is a wiki page about peer feedback and stack ranking with some more detail on each process.

Naively I imagine a pool of money representing what the company has available this year to allocate to raises, bonuses, compensation adjustments, etc.. Those ranked higher get a larger percentage of that pool once the math is done.

Think you're underpaid vs. your peers? Talk to HR and ask. There's no need for a manager to be involved in this process at all.

Unless there is an objective formula to translate ranks into money, that still leaves some subjective power with someone.

I guess what I'm getting at is, who has the subjective power over your salary?

There could very easily be such a formula.

The only interesting things in it are whether you set firmwide/regional minimums/maximums, and how far you allow the ranking to move your numbers from everyone getting the same increase - eg, does the top ranked employee get 5% more than the median employee, or 50% more?

See Richard Geldreich's Twitter (@richgel999). He has a lot to say about that (when he says "flat-structured tech company", he means Valve).

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