There's no company quite like Valve. Super successful and with an organisation some would call crazy, there's also no company quite as interesting. So hearing about how Valve hires, and fires people, is far more educational than it would be for just about any other video game company.
Writing on Gamasutra, the company's economist Yanis Varoufakis has lifted the lid on some of the company's employment policies, which should be useful for anyone hoping to one day work there (and find out what the hell is going on with Half-Life 3).
When it comes to hiring, they don't usually have interviews. They identify needs/vacancies, form teams, come to a consensus on the best available people out there then go head-hunting.
As for firing—which took place recently, and had people wondering—seems it mostly takes place not with under-performing employees, but those who may not fit with the company's famous "boss free" structure.