whole foods market human resources perspective

Whole Foods Market

A Human Resources Perspective

1 Lisa Collins Capella University Student 12/10/2012

Table of Contents

3 Introduction to Whole Foods Market 15 References

4 Recruiting 16 References

5 Training and Development

6 Selection

7 Performance Management

8 Performance Management Methods

9 Benefits

10 Employee Discipline and Conflict

11 Labor Relations

12 Employee Litigation

13 Summary

14 Recommendations


Whole Foods Market


Whole Foods Market is the largest natural foods store in America. It has an accelerated customer base

as a growing population of consumers are gravitating toward healthy, chemical-free, and organic diet choices. Whole

Foods Market was founded in Austin, Texas, when four local businesspeople, who owned two different small stores that

offered organic, and natural food products, decided the natural foods industry was ready for a supermarket. They began

with 19 employees and one store; today there are over 350 retail and non-retail locations, as well as over 54,000

employees, and the company advertises its plan to open new stores. Part of the company’s continued and outstanding

success is attributed to its mission statement and core values relating to its employees. A substantial part of the

company’s culture and mission statements translate its desire to contribute to the happiness and welfare of its

employees. In fact, the company has a career section in its web-site that boasts its fifteenth year in FORTUNE®

magazine's top 100 places to work.

Further, the company offers excellent benefits, open-door policies, team autonomy, diversity, and career

path training as part of its human resources management strategy. Whole Foods Market publicly attributes its success

to its team members and the cutting edge strategies used in recruiting and developing new talent; it is a progressive

and attractive company to work for. Their “Declaration of Interdependence” promises openness and democratic

management with mutual respect. (Anonymous, Whole Foods Market, 2012).

Recruiting


• iCIMS software to track and centralize candidates’

applications locally and nationally as well as sort by skill

level.

• Detailed job descriptions are posted in job fairs, career

centers, store kiosks, web-site recruiting sites, and

company web-site announcements. Further, internal

recruiters aggressively recruit from colleges, as shown on a

job announcement for a recruiter on a Simply Hired job

posting (Simply Hired, 2012).

• HR managers are in positioned in each location. This

provides a store with the ability to hire according to local

cultural needs as well as expedite the hiring process.

Regional HR Managers are staffed for additional support.

• Lastly, the company has links on its career site to social

media accounts, which enable quick processing, in addition

to their short web-site applications,

Training and Development


Workforce planning through training is the framework Whole Foods Market relies on for making

staff and staff resource decisions that are linked to its mission, strategic plan, and unique customer base.

A video clip is attached to Whole Food Market’s training and development site that refers to team

training, succession planning, and employee empowerment that makes the viewer feel the company is interested in its

employees because it expects them to make mistakes, and encourages them to train for better outcomes.

Further, the company demonstrates its commitment to training by investing in a sizable training staff.

Each region has its own regional trainer who is responsible for overseeing the orientation and training of all new and

existing team members. Additionally, many of their stores have educators or trainers on site. Moreover, many of their

teams have an assigned team trainer.

Additionally, Whole Foods Market is listed as a client of Adventure Associates, a company that provides

team building, conflict resolution, and leadership skills training (Anonymous, 2012).

Lastly, the company has its own “university” that enables employees to log-on in order to train for immediate improvement or for future elevated areas of responsibility.

Quick Facts

Mentors Test Evaluations and Yearly Surveys Peer Cross Training Vast Virtual Library ROI and Effectiveness shown in Sales Results

Selection


Selection is Modern, Inventive, and Designed for Successful Selection

• Applicants are screened by local HR or store leadership personnel for skills/needs match.

• Referred to appropriate department leadership who may grant interview.

• Formal interviews are granted in peer-review panels for leadership positions:

Team member participation in group interviews are considered employee empowerment philosophies put into

action. Diversity in the group brings different aspects of the roles and responsibilities of the position to the

interview process.

Whole Foods Market offers the right to vote to local teams when it comes to hiring. New hires serve for a period

of one to three months on a team, after which the team approves (or rejects) the candidate as a permanent team

member by two-thirds vote (Whole Foods, 2012)

Performance Management


Quick Facts $15.00 an hour plus stock options for

the average unskilled team member-far

above average.

Gainshairing Philosophy

Whole Foods Market believes that employees who share in the organization’s success will perform with optimum engagement. “We strive to create a company-wide consciousness of “shared fate” by uniting the interests of team members as closely as possible with those of our shareholders…When

teams come in under budget due either to higher sales or

lower labor costs, a portion of the surplus is divided among the team members and paid out every four weeks, and a portion is set aside in a savings pool” (Whole Foods, SEC Report 2012).

Pay Program

- Pay for Experience and Performance

- Beginning pay based upon related experience.

- Gainshairing, which averaged an extra .60 per

hour last year for Team Members.

- Team Members are eligible for a Performance

Review at 30-45 days, at 6 months of service,

and annually thereafter.

- WFM targeted average annual pay increase

has been averaging 5% for the past several

years (1% higher than the national average).

- Wage structures and "Caps" are reviewed

annually (WFM, 2012),

Performance Management Methods

360 Degree Review Process

Whole Foods Market utilizes software as part of its performance management system. According to Michelle Hirsch

of Whole Foods Market “ ProfileXT® and CheckPoint 360°™ are the products we like to use for leadership

development. These tools give participants insight into their own skills (Hirsh, M.?).

The organization has a clear formal feedback system in that it utilizes self-assessment, peer review, and scoring

software to give the human resources manager a clear picture of the employee’s performance.

The employee is evaluated by raters set to compare the employee’s behaviors and performances to written

organizational standards, as well as peer and self-assessment methods.


Peer Evaluation

Openly Conducted

Store Leader

HR Manager Self-

assessment

HRIM software &

measurement raters

Benefits


Remuneration is Comprehensive and Desirable

• Stock Options, Gainshairing, and Stock Purchase Plan

• Paid health Insurance

• Personal Wellness Account, Dental Plan , Vision Service

Plan

•

• Retirement

• 401K

• Life Insurance

• Both short-term and long-term disability offered.

• Dependent Care Reimbursement Account (DCRA)

• 20% store discount

• Paid Time Off

These are only the highlights!

Employee Discipline and Conflict

Whole Foods Market Uses Exhaustive Measures to Deter Termination

• Immediate feedback is given when problem is noticed

• Verbal warnings

• Additional training may be offered

• Peer-Review Disciplinary Panels with Store Manager/HR

• Written Action Plans with Follow-up Procedures

• Self-Assessment (Whole Foods, 2012) & (United States District Court, E.D. Michigan, Southern Division, 2012).

No EAP Program is Advertised and Arbitration is Not Acceptable ( MacGillis, A., 2009).

12/14/2012 Lisa Collins Capella University Student 10

Quick Facts

Labor Relations


Serious Labor Relations Concerns

Whole Foods Market’s CEO is an activist for legislation that weakens unions. Many blog postings by

employees have accused him of conducting anti-union meetings disguised as training meetings. As the CEO was

investigated by the SEC for posting positive commentaries about his company, and negative commentaries about

competitors under a false name, credence should be given to some of the allegations (Johnson, C. 2007). While the

organization’s mission and culture statements tout its benevolent and visionary labor practices, its CEO has aggressively

fought unions that would ensure those practices. Many articles that are critical of the organization’s loose regard for

employment law are linked together in a web-site by Michael Jay that concern covert meetings to block unions, anti-union

training, violations of labor laws, and violations of privacy and retaliation laws (Jay, M. 2009). The web-site location is

http://michaelbluejay.com/misc/wholefoods-articles.html, and has articles from many sources, including Forbes Global Internet magazine, that have documented said claims

“Whole Foods’ avowedly libertarian CEO, John Mackey, has compared the prospect of having unions at his

stores to “having herpes.” An internal Whole Foods document listing “six strategic goals for Whole Foods Market to achieve

by 2013,” obtained by Mother Jones, includes a goal to remain ’100% union-free’” (Harkinson, J. 2009). The article quoted

information about the only union that organized; it subsequently dissolved “ Once employees approved the union in 2002

and began negotiating a contract with Whole Foods’ lawyer, they asked the company to award raises more equitably,

establish a grievance procedure, and protect them from arbitrary firing. The lawyer rejected the proposals but never put forth

alternatives, while scheduling and rescheduling meetings that were spaced out every other month for more than a year”(Harkinson, J. 2009).

http://michaelbluejay.com/misc/wholefoods-articles.html



Employee Litigation


Whole Foods Market has recently had employee related litigation filed against them that reveal the ineffectiveness of the decentralized and peer-inclusive management of employees.

• Glenn Mack VS Whole Foods Market: Allegedly fired for being a Muslim (NG, C. 2011).

• OSHA vs. Whole Foods Market: Allegedly, an employee was fired for reporting sewer leakage near food to

upper management- whistleblower violation (D'Aquino, M. & Wald, M, 2011).

• Iceberg vs. Whole Foods Market Group, Inc.: Alleged sexual harassment and retaliation.

This case provides a clear image of the decentralized “reality-show” method of managing people. The person

openly accused of sexual harassment was allowed to remain on the plaintiff’s performance review and

disciplinary panel boards as his peer and team leader. The HR manager contributed to the problem by privately

making remarks to the plaintiff that “she would not let her get him” while doing nothing to mitigate the problem.

The docket leads one to believe that in spite of the local and regional HR managers’ presence, cliques and

teams opinions are valued more than systematic measure that requires accountability for adherence to labor

laws and privacy concerns (United States District Court, E.D. Michigan, Southern Division, 2012).

World-Class Proskauer law firm states its role in Whole

Foods Market’s strategy on day-to-day labor and employment matters,

including strategic advice on human resource issues and drafting policies

and handbooks” (Unknown, ?).

Quick Facts

Summary


Whole Foods Market began with an innovative and creative model of employee management that

encompassed that model into its organizational strategy with robust success. It is currently used as a benchmark for HR

strategy by the academic and business world. However, the CEO’s behaviors and actions that affect the organization’s

labor force are divergent from its mission statement and culture. Further, his actions expose the organization to millions

of dollars in employee litigation costs, as well as potential citations and fines from government entities. Additionally, such

actions are in contrast to the desires and motivations of the organization’s customers which may reduce the unique

customer base.

Indeed, the total compensation package, exemplary training programs, performance reviews, progressive

disciplinary actions, the expectation of happy lives, and shared-fate philosophy are desirable to talent available in human

capital pools. Failure to maintain the organization’s success without difficulty after the baby boomers retire would not be a

problem for Whole Foods Market as such environments and remunerations are sought after and generate loyalty.

However, the organization has begun increasing its part-time employee labor force while decreasing its full-

time employee labor force. Health insurance policies have become less effective and affordable, and trust has

diminished. It does appear that the business model that created Whole Foods Market’s success is not the model of its

future.

While 360 degree performance management is the new nova of business models, it has serious problems:

labor related laws, privacy issues, and ethical employee management are degraded. Lastly, this study provides evidence

that sound human resources policies, and skilled human resources managers are not a necessary human capital

management expense; rather, they are integral parts of successful organizational strategies.

Recommendations

• The board of directors should seriously consider the removal of John Mackey as its CEO.

• The peer-reviews should be conducted in an open forum with recommendation authorities only. No decisions

should be made outside equal and standardized procedures that are contained to the HR manager and approved

management teams. While the motivation of personal gain has been a proven successful method of obtaining

employee engagement and peer-review decisions, it is not measurable as biases, cliques, and prejudices emerge.

• Human Resources Managers must be held accountable for actions that are taken in their stores that violate the

letter and spirit of labor laws.

• Whole Foods Market should adhere to its stated culture, mission, and organizational statements in order to

maintain the growth and stability it has achieved by their implementation. Benefits and knowledgeable full-time

employees must be maintained in order to retain and attract needed talent.


References


Anonymous, iCIMS, (?)SUCCESS STORY - WHOLE FOODS MARKET Retrieved from Google 10/27/12

http://www.icims.com/content/clients/casestudy_wfm.aspieved

Anonymous, (2012). Conflict Resolution page on Adventure Associates’ web-site. Retrieved from Yahoo, 11/17/12 at

http://www.adventureassoc.com/workshops/conflict-resolution.html

Anonymous, (2012) Simply Hired, Regional Recruiter https://jobs2-wholefoods.icims.com/jobs/103112/regional-

recruiter/job?mode=job&iis=SimplyHired&iisn=SimplyHired&sh_aa=1&utm_source=simplyhired&utm_medium

=jobclick

D'Aquino, M. & Wald, M,( 2011). OSHA Regional News Release, Region 4 News Release: 11-1562-ATL (569), US

Department of Labor Office of Public Affairs, Retrieved 11/4/2012 from Google at

http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=NEWS_RELEASES&p_id=21465

Harkinson, J. (2009). Are Starbucks and Whole Foods Union Busters? Mother Jones-web-site. Retrieved 12/5/2012 at

Google http://www.motherjones.com/politics/2009/04/are-starbucks-and-whole-foods-union-

busting?page=2

Hirsh, Michelle, (?). AssessmentCompany.com, reference statement Retrieved from Google 11/09/2012 at

Markethttp://www.assessmentcompany.com/products/checkpoint360.html

http://www.icims.com/content/clients/casestudy_wfm.aspieved

https://jobs2-wholefoods.icims.com/jobs/103112/regional-recruiter/job?mode=job&iis=SimplyHired&iisn=SimplyHired&sh_aa=1&utm_source=simplyhired&utm_medium=jobclick









http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=NEWS_RELEASES&p_id=21465

http://www.motherjones.com/politics/2009/04/are-starbucks-and-whole-foods-union-












References Continued


Johnson, Carrie,(2007). SEC Interested in Web Musings of Whole Foods CEO, The Washington Post, Retrieved from

Google 11/09/2012 at http://www.washingtonpost.com/wp-

dyn/content/article/2007/07/13/AR2007071301975.html

NG, Christina, (2011). Muslim Ex-Whole Foods Employee Sues Company for Discrimination. ABC World News web-

site

retrieved from Google 11/29/2012 at http://abcnews.go.com/US/muslim-foods-employee-sues-

company- discrimination/story?id=14905251

United States District Court, E.D. Michigan, Southern Division, (2012) Iceberg vs. Whole Foods Market Group, Inc.

retrieved from Google 11/16/12 at http://www.leagle.com/xmlresult.aspx?page=4&xmldoc=In FDCO

20121105494.xml&docbase=CsLwAr3-2007-Curr&SizeDisp=7

Unknown, (2009). Proskauer Law Firm web-site. Retrieved at Google 12/5/2012 at

http://www.proskauer.com/practices/labor-and-employment/

Whole Foods Board of Directors (2012). Form K-10 United Sates Securities and Exchange Commission.

Retrieved from Google 12/2/12 at

http://www.sec.gov/Archives/edgar/data/865436/000110465911065946/a11-28314_110k.htm

Whole Foods Market, (2012) Hiring Process, Retrieved from Google 10/26/2012 from

http://www.wholefoodsmarket.com/careers/hiring-process

http://www.washingtonpost.com/wp-dyn/content/article/2007/07/13/AR2007071301975.html





http://abcnews.go.com/US/muslim-foods-employee-sues-company-





















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