592-HRM RESEARCH PROJECT

Whole Foods Market’s motto is “Whole Foods, Whole People, and Whole Planet” where shoppers can “feel good about where you shop” (Johnston & Szabo, 2011). Whole Foods led a change in how consumers shopped for their groceries and what types of products and service consumers expected from their grocery store. When it was founded in 1980 in Austin, Texas, Whole Foods was one of the first of its kind to offer the “finest natural and organic foods available, maintain the strictest quality standards in the industry, and have an unshakeable commitment to sustainable agriculture” in a large supermarket setting (Whole Foods Market, 2016). Before Whole Foods, consumer’s ability to find supermarkets committed to healthy and organic food was not an easy task. Since 1980 Whole Foods and grown exponentially and a lot of their success has stemmed from how they promote quality in every aspect of the business.

Mission and Core Values

Whole Foods operates as a mission-driven organization that is committed to high quality standards that goes beyond just their products. Whole Foods business strategy is to set itself apart through its superior quality in their products and services. They have chosen to adopt a generic differentiation strategy which aims to offer customers a unique product or service (Hsieh & Chen, 2011). They are not the cost leader in the industry, in fact they are typically much higher in cost than most grocery stores. Having a premium product at a premium price means the company has to successfully differentiate itself from its competitors to gain customers. One way the company does this is by operating under eight core values including:

· We Sell the Highest Quality Natural and Organic Products Available,

· We Satisfy, Delight and Nourish Our Customers,

· We Support Team Member Happiness and Excellence,

· We Create Wealth Through Profits & Growth,

· We Serve and Support Our Local and Global Communities,

· We Practice and Advance Environmental Stewardship,

· We Create Ongoing Win-Win Partnerships with Our Suppliers,

· We Promote the Health of Our Stakeholders Through Healthy Eating Education (Whole Foods Market, 2016).

This paper will focus on how Whole Foods commitment to quality within their employee relations helps the human resource management aspect of the business. One example of total quality commitment is the Whole Trade Guarantee. Whole Foods marks certain products as a part of the Whole Trade Guarantee and when they are purchased a portion of the profit is set aside to “provide more money to the producers, ensure better wages and working conditions for the workers, and assure that environmentally sound practices are being carried out” (Kotkin, 2010, p. 52). Every item that is a part of this program helps support Whole Foods commitment to superior quality in their products and practices. This initiative helps them a competitive advantage for hiring and retaining top employees because people want to work at a place that cares about their employees. Organizations that operate under the generic differentiation strategy, do well to promote employee creativity and innovation to assist in meeting the ever changing needs of their customers (Hsieh & Chen, 2011). Whole Foods creates this type of environment through a variety of their HR management practices.

Human Resource Management

Whole Foods has been on the list of Fortunes 100 Best Companies to Work for since the list began (Whole Foods Market, 2016). This award has been received because of Whole Foods commitment to their employees and the things they do to make work enjoyable. The core value directed at team members that Whole Foods operates within has additional criteria including, “empowering work environments, self-responsibility, self-directed teams, open & timely information, incremental progress, and shared fate” (Whole Foods Market, 2016). These criteria fully support the practice of empowering employees to take responsibility for their success and failures within the organization by involving every member of the team in business decisions and organizational success. Research has linked empowering employees with higher employee performance, job satisfaction, organization commitment, and improvements at the individual and organization level (Baird & Wang, 2010). Empowering employees also helps bring out creativity and innovation which helps the organization better serve their customers. Whole Foods further stands out in their HR management in their hiring practices, employee benefit offerings, commitment to social and environmental responsibility, and community involvement.

Hiring Practices

Instead, of calling their workers employees, Whole Foods refers to them as team members. This title is important because it shows that they view their employees as a part of the overall success of the business. Each team member is a part of a self-directed teams that have the ability to approve new hires through a voting system where two thirds of the current team members must agree to hire a candidate full time (Tata & Prasad, 2004). The idea of self-directed teams is to spread out the critical business decisions that were previously reserved for mid or upper level management to all levels of employees (Kulisch & Banner, 1993). By allowing team members to a part of the decisions they will be much more invested in making the best decision for themselves and the organization as a whole. Studies have shown that organizations that utilize self-directed teams have seen “improved team involvement and performance, positive morale, and a sense of ownership and commitment to the team’s goal” (Zuidema & Kleiner, 1994, p. 59). Mid and upper level management often do not have the ability to observe how employees work on a day to day basis. However, their coworkers are much more aware of how an employee acts when management is not around. Involving all levels of the staff in hiring helps ensure that the candidate works as well as they portrayed in their interview.

Employee Benefits

Whole Foods is also able to attract top talent because of the outstanding benefits package that they offer. These benefits include, “a 20% store discount, a yearly vote for the future of new benefits, low health insurance premiums, personal wellness or health savings account, competitive salaries, gain sharing, stock options, and generous PTO” (Whole Foods Market, 2016). Workplace wellness is a new workplace trend that is gaining more and more attention. “Empirical research findings suggest that wellness programs are significantly related to lower levels of absenteeism and health care costs, along with increased health knowledge and improved physical activity and nutrition levels among employees” (Houghton, Neck, & Cooper, 2009, p. 162). By allowing employees to buy high quality healthy groceries at a discount and educating customers and employees about the importance of wellness, the benefits are being received by the company and the employee. Employers need employees present to operate effectively, and healthy employees are less likely to need off of work for ongoing health issues. Secondly, Whole Foods give all of their team members a say in the structure of the future benefits package. Not only are team members involved in the hiring process, they also have a say in what they want their benefits package to look like. By involving every person individually in the decision process, it can help prevent “group think” where member are encouraged to make a decision based on achieving unanimity versus expressing creative individual thoughts (Korac-Kakabadse & Kouzmin, 1999). It also helps ensure that the benefits that Whole Foods offers, are what the employees really want and need.

In addition to the benefits, Whole Foods seeks to offer competitive wages, gain sharing, and stock options to their team members. Granting stock options to team members is a great way to align their interest with stockholder’s desire long term organization success (Angel & McCabe, 2008). Whereas gainsharing is a compensation structure that rewards employees at the team level for developing and implementing organization improvements (Gomez-Mejia, Welbourne, & Wiseman, 2000). By diversifying team member’s income between set wages, gainsharing, and stock options, the employees are able to directly influence their wages based on their initiative. This helps promote higher levels of involvement. Lastly, Whole Foods has a generous PTO policy. Utilizing PTO instead of sick and vacation time, allows employees greater responsibility in managing their time. Companies that use sick time have many employees call in and claim to be sick so that they did not lose out on their sick leave. PTO on the other hand, allows employees to better manage their time off from work instead of feeling like they have to give a reason or lie about being sick. Instituting PTO is seen as a great way to encourage work-life balance, which is becoming a great competitive advantage for organizations to employ (Ford & Locke, 2002).

Social and Environmental Responsibility

Whole Foods is very committed to being socially responsible in the products they sell and how they do business. Their commitment to quality translates into every aspect of the business and has developed into a competitive advantage for employee retention. There is growing pressure for organizations to operate with a higher regard to the social and environmental impact their organization has (Russell, C., Russell, D., & Honea, 2016). This responsibility is something that Whole Foods takes seriously. Whole Foods pledge to ethical practices in their business dealings bleeds over into the treatment and expectations of their employees. Employees can see when their employer’s policies have a genuine regard for society and traditionally will follow along with management’s behavior (Karnes, 2009). By corporately practicing socially responsible and moral business practices, employees will follow suit. When employees operate under moral and socially responsible guidelines, research has found that employees take greater pride in the organization and their work (Karnes, 2009).

Community Involvement

Lastly, Whole Foods is known for the commitment and involvement within their communities. Examples of this are the 5% days where 5% of net sales are donated to a local nonprofit education program and the Local Loan Producer Loan Program which is a program that gives small loans to local producers to help build up their business and in return help Whole Foods provide more locally grown produce (Kotkin, 2010). Employees like to see that their employer participates in giving back and is not solely concerned with financial gains. Involving employees in the community involvement practices and planning for future initiatives is critical to employee appreciation and buy in (Mcshane & Cunningham, 2012). Whole Foods excels at involving employees in the decision making process and community functions. They also focus on building community among their team members by celebrating diversity. Celebrating diversity among individual team members helps organizations hire the best of the best and promotes innovation and creativity (McMahon, 2010).

Conclusion

In conclusion, Whole Foods cares about their customers and their employees. This care is evident in the way they run their business and their guarantee of total quality. Whole Foods care for their employees has set them apart from other businesses and helps in employee recruitment and retention. Employees can see when employers truly care about them, and it does not go unnoticed. Employees are the main ambassadors for an organization. Front line employees are the ones dealing with the customer’s day in and day out. By allowing all levels of Whole Foods staff to take part in critical business decisions they can ensure that the front line employees are up to date on recent business decisions and represent the company well.

References

Angel, J. J., & McCabe, D. M. (2008). The ethics of managerial compensation: The case of executive stock options. Journal of Business Ethics, 78(1-2), 225-235. doi:http://dx.doi.org.proxy.tamuc.edu/10.1007/s10551-006-9326-8

Baird, K., & Wang, H. (2010). Employee empowerment: Extent of adoption and influential factors. Personnel Review, 39(5), 574-599. doi:http://dx.doi.org.proxy.tamuc.edu/10.1108/00483481011064154

Ford, L. R., & Locke, K. (2002). Paid time off as a vehicle for self-definition and sensemaking. Journal of Organizational Behavior, 23(4), 489-509. Retrieved from https://login.proxy.tamuc.edu/login?url=http://search.proquest.com.proxy.tamuc.edu/docview/224868881?accountid=7083

Gomez-Mejia, L., Welbourne, T. M., & Wiseman, R. M. (2000). The role of risk sharing and risk taking under gainsharing. The Academy of Management Review, 25(3), 492-507. Retrieved from https://login.proxy.tamuc.edu/login?url=http://search.proquest.com.proxy.tamuc.edu/docview/210947286?accountid=7083

Houghton, J., Neck, C., & Cooper, K. (2009). Nutritious food intake: A new competitive advantage for organizations? International Journal of Workplace Health Management, 2(2), 161-179. doi:http://dx.doi.org.proxy.tamuc.edu/10.1108/17538350910970228

Hsieh, Y. H., & Chen, H. M. (2011). Strategic fit among business competitive strategy, human resource strategy, and reward system. Academy of Strategic Management Journal, 10(2), 11-32. Retrieved from https://login.proxy.tamuc.edu/login?url=http://search.proquest.com.proxy.tamuc.edu/docview/886543033?accountid=7083

Johnston, J., & Szabo, M. (2011). Reflexivity and the whole foods market consumer: The lived experience of shopping for change. Agriculture and Human Values, 28(3), 303-319. doi:http://dx.doi.org.proxy.tamuc.edu/10.1007/s10460-010-9283-9

Karnes, R. E. (2009). A change in business ethics: The impact on employer-employee relations. Journal of Business Ethics, 87(2), 189-197. doi:http://dx.doi.org.proxy.tamuc.edu/10.1007/s10551-008-9878-x

Korac-Kakabadse, N., & Kouzmin, A. (1999). Dysfunctionality in "citizenship" behavior in decentralized organizations a research note. Journal of Managerial Psychology, 14(7), 526-544. Retrieved from https://login.proxy.tamuc.edu/login?url=http://search.proquest.com.proxy.tamuc.edu/docview/215865781?accountid=7083