Assignment

CASE STUDY: The Whole Truth

Whole Foods Market (WFM) started out in 1980 as one store with 19 employees in Austin, Texas Today, with 370 stores and 54,000 employees in North America and Great Britain, its the leading natural and organic foods supermarket (and ninth-largest food and drug chain in the United States) Along the way, it has also gained a considerable reputation as a socially responsible company and a good place to work. WFM's motto is "Whole Foods, Whole People, Whole Planet," and its guiding "core value," according to co-CEO Walter Robb, is "customers first, then team members, balanced with what's good for other stakeholders.... If I put our mission in simple terms," Robb continues, it would be, No. 1, to change the way the world eats and, No 2, to create a workplace based on love and respect."

WFM made Fortune magazine's very first list of the "100 Best Companies to Work For" in 1998 and has routinely appeared on the list ever since. Observers have acknowledged the compa¬ny's growth (which means more lobs), salary-cap limits (the top earner gets no more than 19 times the average full-time salary), and generous health plan. The structure of the company's current health care program, which revolves around high deductibles and so-called health savings accounts (HSAs), was first proposed in 2003. Under such a plan, an employee (a "team member," in WFM parlance) pays a deductible before his or her expenses are covered

Meanwhile, the employer funds a special account (an HSA) for each employee, who can spend the money to cover health-related expenditures. The previous WFM plan had covered 100 percent of all expenses, and when some employees complained about the proposed change, the com¬pany decided to put it to a vote. Nearly 90 percent of the workforce went to the polls, with 77 percent voting for the new plan. In 2006, employees voted to retain the plan, which now carries a deductible of around $1,300; HSAs may go as high as $1,800 (and accrue for future use). The company pays 100 percent of the premiums for eligible employees (about 89 percent of the workforce).

High-deductible plans save money for the employer (the higher the deductible, the lower the premium), and more importantly-at least according to founder and co-CEO John Mackey -they also make employees more responsible consumers. When the first $1,300 of their medical expenses comes out of their own pockets (or their own HSAs), he argues, people "start asking how much things cost. Or they get a bill and say, 'Wow, that's expensive ' They begin to ask questions. They may not want to go to the emergency room if they wake up with a hangnail in the middle of the night. They may schedule an appointment now "41

Questions

1. How important would benefits like those offered by Whole Foods be to you if you were working there to put yourself through school or to collect a paycheck while look¬ing for a position in your chosen field?

2. What negative elements do you see in Whole Foods approach to pay and benefits?

3. Why don't more companies use the approach to employee health care pioneered by Whole Foods?