Kingfisher School of Business and Finance
Dagupan City
The Whole Truth: Whole Foods
Market
Case Study No. 2
in
BME 12: Human Behavior in Organizations
Submitted by:
Aguilan, Maria Alondra Jane P.
Alicaycay, Julie-Ann B.
Bolambao, Mary Christine
Castil, Beth Chee C.
Dayrit, Kyryl Angel A.
Delos Santos, Danica C.
Joson, Ma. Angelika V.
Leocadio, Lislie Joy U.
Molina, Marianne C.
Paglingayen, Chad Joshua
Pua, Vanessa Joyce C.
Tandang, Andrea Eiai DG.
Velasco, Jashley Pearl M.
Group 11
Submitted to:
Ms. Rosalie M. Gabat
Ms. Mylahnie R. Lopez
I. Problem
An adequate compensation structure for an organization’s workforce considers the firm's
ability to pay, employee needs, and impacts on performance. Per excerpt, Whole Foods
Market's (WFM) current compensation plan incorporates a healthcare program with high
deductibles and health savings accounts. Their previous plan implored a-hundred-percent
expenditure for the firm without any out-of-the-pocket payments from their employees. Naturally,
an issuance of deductibles before insurance reimbursement affects the budget plans of each
employee, thus raising concerns. Nonetheless, as the majority of the employees favored the
structure change, the opposition was deemed to be negatively affected. Therefore, this case
study aims to answer the following:
In what ways could WFM enhance its healthcare program to conciliate all of its employees?
II. SWOT Analysis
STRENGTHS WEAKNESSES
• Recognition
• Inefficient Compensation Structure
• Health Savings Account
• Lack of Overall Performance Appraisal
• Employee Participation
OPPORTUNITIES THREATS
• Management Conflicts
• Prospective CSR Ambassador
• Dysfunctional Turnovers
• Brand Loyalty and Recognition
Strengths
1. Recognition
Whole Foods Market has established a good reputation as the leading natural and
organic foods supermarket in the United States. It is known as a socially-responsible firm that
focuses on the well-being of its customers and team members.
2. Health Savings Account
The company invests in its health care program that covers health-related expenditures.
This plan contributes to employee motivation and empowerment through the benefits acquired.
3. Employee Participation
Involvement in the decision-making process enables employees to voice their concerns and
share knowledge with others. While this strengthens the manager-employee connection, it also
fosters a strong sense of collaboration among employees.
Weaknesses
1. Inefficient Compensation Structure
The company’s compensation structure incorporates salary-cap limits and a generous health
plan. However, the proposed change in their healthcare program did not consider all of the
factors affecting employees before implementation. Moreover, salary-cap limits entail
dysfunctional turnovers because merits and incentives are limited.
2. Lack of Overall Performance Appraisal
Upon WFM's journey in the food retail industry, they have not conducted proper evaluations
when adjusting their operational systems. They are bound by rationality and continue to
implement new things without carefully developing concrete steps for optimal growth.
Opportunities
1. Prospective CSR Ambassador
Whole Foods Market has a good reputation as a socially-responsible company. The
management has established an honorable set of core values, leading to excellent corporate
social responsibility that could serve as a model for every aspiring company.
2. Brand Loyalty and Recognition
As the organization prioritizes its customers and CSR the most, absolute customer loyalty and
support would be established. Thus, constant growth and uptrend results for the company are
expected.
Threats
1. Management Conflicts
As the company grows, more workforce is needed. Without careful employee selection,
differences in values and motivation might trigger conflicts. Hence, the company must oversee
the disadvantages of diversity.
2. Dysfunctional Turnovers
The management tends to overlook things such that they harbor inadequate decisions. Thus,
WFM could lose high-caliber talents and valuable employees who remain unsatisfied.
III. Alternative Courses of Actions (ACA’s)
ACA No. 1: Execute Situational Approach to Management
The proposed change of WFM in its compensation structure does not conciliate with the
entire workforce resulting from divergence. For instance, a high-deductible health saving
account is ideal for healthy young employees but disadvantageous for those with chronic
diseases. To restore unanimity, WFM should consider a situational approach. They should
conduct medical checkups for their employees to assess their respective health conditions.
Accordingly, WFM should systematize health cases and develop multiple programs for each
category. All factors considered, this process results in an equitable and flexible compensation
plan.
Advantages
● Demonstrates fairness
● Prevents dysfunctional turnovers
● Promotes organizational core values
Disadvantages
● Time-consuming
● High administrative costs
ACA No. 2: Exhibit Effective Communication Strategies
In line with the complaints about the current compensation plan, the top management
can conduct general meetings to discuss concerns and disclose necessary information.
Through this, workers would be enlightened about the objective and benefits of the plan that
ultimately adheres to organizational goals. In addition, the executives must implore adjustment
periods for employees to reconstruct their healthcare expenditures. This course of action implies
a sympathetic approach that derives a cost-effective resolution, establishing absolute
consensus among employees.
Advantages
● Enrichment of employee participation
● Cost-effectiveness
● Improve formal relationships
Disadvantages
● Communication barriers
● Possibility of conflict escalation
● Time-consuming
ACA No. 3: Implementation of Gain-Sharing Program
As employees complain about out-of-the-pocket expenditures, an offset is necessary to
balance out the increase in their cost of living expenses. While WFM saves financial resources
from the revised healthcare program, they could boost operations and implement an additional
incentive system to constitute the compensation structure. Specifically, the management should
implement the Scanlon plan, a gain-sharing program in which employees share in pre-
established cost savings based on employee effort, competence, cooperation, and sharing-
benefits formula. This course of action shall satisfy the interests of the employees, employers,
and stockholders, inducing an overall growth in company performance.
Advantages
● Better organizational performance
● Boost morale and job satisfaction
● Offsets the negative consequences of high deductibles
Disadvantages
● Extinguish intrinsic motivation
● Forgone equity investments
● Encourage unethical behaviors
IV. Recommendation
Upon scrutinizing the alternative courses of action, the group has decided to recommend
ACA No. 1: Execute Situational Approach to Management. The health conditions of employees
require evaluation as they differ from one another. Thus, designing healthcare programs
considering employee health conditions would be an optimal action.
With ACA No. 1, there is a systematic and reliable basis as categories are defined by the
human resource managers and healthcare professionals. These would incur administrative
costs for implementation but are justifiable as the execution necessitates. Accordingly, medical
check-ups would make employees feel more valuable, contributing to employee satisfaction and
motivation. Lastly, this ACA promotes fairness and develops good relations in the workplace
environment.
The ACA No. 2: Exhibit Effective Communication Strategies was not chosen because
having general meetings would be time-consuming. Furthermore, this ACA aimed to justify the
company's decision which entails ‘satisficing’ because it barely addressed the main issue,
likewise, it would just cause intimidation for those who have concerns. Finally, the ACA No. 3
Implementation of the Gain-Sharing Program was not chosen since it implicates high
opportunity costs and unpredictable variables.