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Jason Robinson

A Comprehensive Examination of the Compensation and Benefit

Practices of Whole Foods Market
History
One of the biggest trends that have hit the American landscape over the past two decades,
has been individuals obsession with getting fit, which can be achieved through living healthier
lifestyles, such as getting the proper amount of exercise, and eating healthier foods, namely
organic. Whole Foods is well known throughout the U.S. and globally, for their premium natural
and organic foods, and commitment to providing sustainable agriculture.
The company began its startup in Austin, Texas the year of 1980 with a staff of 19 people
in total as Safer Way Natural Foods and Clarksville Natural Grocery merged to create Whole
Foods Market that September. Today, the company is the world leader in natural and organic
foods, has 411 stores, with 88,000 team members. Many of the owners were made up of close
friends and family from both companies, merging into one complete unit (Whole Foods Market
2015.
The absolute goal of any organization when constructing an effective compensation plan is to
adhere to a total compensation strategy that involves intrinsic and extrinsic compensation for the employee.
Intrinsic is the internal value that working at the company can offer an individual, as if the work that they are
undertaking feels rewarding, whereas, extrinsic comprises of monetary and nonmonetary rewards, pay
compensation involving base pay and its appropriate adjustments over time (Martocchio 3).
The compensation strategy of Whole Foods Market is vital to ensuring that the company will attract
competent individuals who have the knowledge, skills, and abilities to fulfill the business needs of the

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organization by providing human capital. If employees, who add value to a company, perceive that they are
being under-paid, or lacking the discretionary benefits they seek in joining an organization, they will most
likely not be as productive, or effective in completing tasks. This, as a result, would have an adverse effect
on a companys ability to be sustainable, and competitive in its industry. Whole Foods Market has seemed
to be able to sustain its competitive edge since its initial inception.

A Great Place to Work

Whole Foods Market prides itself on being the highest paying employer of a grocery store chain in
the US, topping Target and (until most recently) Walmart. They also boast their continuous annual ranking
on Fortunes Best 100 Companies to Work For, since the magazine began compiling the list in 1998. The
companys success can be contributed to their commitment to growth and development by encouraging its
employees to follow their dreams, or their true passion, whether it is within or outside of the company.
Workers at a Whole Foods Market in San Franciscos South of Market were in a wage
dispute with the organization demanding a $5 an hour pay increase, improved working
conditions, a comprehensible and affordable health plan, in addition to, a guarantee that there
will be no retaliatory consequences. The company has been dreadful at fairly and appropriately
compensating its employees, in relation to areas COLAs, and it requires the employees to adhere
to the organizations anti-union curriculum. The workers reasons for demanding higher wages is
due to the rapid increase of the cost of living. The National Low Income Housing Coalition
stated in a report stated that the wage that would be necessary to afford a one-bedroom apartment
in the San Francisco Area is about $30 an hour; however, Whole Foods Market has a pay range
for its employees from $11.25 to $19.25, very well below the required rate (Salle 2014).

Compensation

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Whole Foods Market thrives on recruiting passionate, bright, and enthusiastic people who
are knowledgeable about great food, their communities, and who want to bring that passion into
the work environment that will ideally lead others to bring about a positive change that will
brighten the outlook of the organization. The most effective method to induce positive work
behavior, performance, and attitudes is to compensate competitively.
Core Compensation

Competitive starting pay, as one of the top highest starting base salaries for a
supermarket, very competitive in the industry.
Wage transparency, the company makes all members of the organization salary to
be available for viewing to any employee who may inquire about it.
Salary cap, Whole Foods Market sets a cap limit for its executives. The policy is
that no pay, or compensation, should exceed more than 19 times the average
salary for full-time members.
Gainsharing, the program rewards employees based on the hours of labor they
produce. Over the last year, the company paid over $90 million to employees who
met the requirements.
Stock options, once an employee has built up three years of service hours they are
eligible to receive stock options. In 2014, 32,000 employees received these
options (Whole Foods Market 2015).

Benefits
Whole Foods Market offers a competitive benefit package for its employees. Its
discretionary benefits paid time off, protection programs, and services, that are offered by the
decision of management.

Paid Time-Off (PTO)

Paid time off, the company provides its employees with PTO hours that are
accrued through labor hours, which are capable of being rolled over from the
previous year.

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Leave of absence, the company allows its employees the ability to extend any
leave that they may have taken beyond the limits of the Family Medical Leave
Act.

Services
Store discount, every member of the company will receive a 20% discount on all
merchandises, and up to 30% in additional discount, should their employees
enroll in companys Healthy Discount Incentive Program.
Healthy discount incentive program, a voluntary program that offers higher-level
discounts for the participation in the companys biometric criteria.
Total health immersion programs, which involve healthy programs that include
cooking, exercise, health and nutrition lectures, and skills that empower
individuals to create enjoyable meals. Employees are able to use their PTO hours
to receive compensation for time out of the office.
Protection Programs
Healthcare plan, the companys healthcare plan is decided upon a companywide
vote, in which more than 80% of the team members of the organization choose
which benefits they will include in their healthcare plan. Some of the plans
include dental and vision care.
Retirement savings plans, all of the employees are covered by a defined
contribution plan, in conjunction with a profit-sharing component of their 401(k).
Health savings account (HSA), employees can receive up to $1,800 to help cover
deductibles cost and out-of-pocket expenses that are not covered by insurance
through a HSA. (2015).
Many of the workers at the company are taking advantage of the many benefits that are
offered, and are satisfied with the pay that is distributed according to an employees rank and
position. In addition, to the above discretionary benefits, the company also offers a great
opportunity for job growth as approximately 90% of the current leadership positions are held by
former lower-level internal employees. As well, the company maintains low retention, as its
voluntary turnover rate is 11%, well under the industry average.

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Conclusion
In closing, by comparison to its competitors, namely Walmart and Target, Whole Foods
Market is overall a better company to work for (depending on geographic location), in relation to
health benefits, the out-of-pocket expense for employees is less at Whole Foods Market, and they
have a higher starting base pay than any other supermarket chain in the United States.
Whole Foods Markets mission and values incorporate their employees benefit and
welfare in every aspect of the companys business activities, as this is witnessed by the
organizations effective HR practices that successfully manage the resources of the company,
resulting in high-level performance, which essentially maximizes shareholder value.

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Works Cited
Martocchio, Joseph J. Strategic Compensation: A Human Resource Management Approach.
Pearson Education, Inc. Upper Saddle River, NJ: 2015. Print.
Salles, Joaquim A. Whole Foods Workers Threaten Action Against the Store if They Arent
Granted Higher Wages. Think Progress. Nov.14 2014. Web. Feb. 20, 2015.
http://thinkprogress.org/economy/2014/11/14/3592524/whole-foods-workers-in-sanfrancisco-demand-higer-wages-better-working-conditions/
Whole Foods Market. A Great Place to Work. Whole Foods Market IP. L.P. February 1, 2015.
Web. http://www.wholefoodsmarket.com/careers/why-were-great-place-work
Whole Foods Market. About Our Benefits. Whole Foods Market IP. L.P. February 1, 2015. Web.
http://www.wholefoodsmarket.com/careers/about-our-benefits