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WHOLE FOODS CASE STUDY
HRM 598 – Compensation
Keller Graduate School of Management
September 19, 2015 Introduction
There are several methods of determining the internal structure of an organization. One of the
most common methods involves evaluating the relative value of positions within the organization and
creating what is called a job-based structure. When job evaluations are performed the evaluator should
always have the big picture in mind. Each position needs to be evaluated from the perspective of how
that individual position adds value to the overall organizational strategy. This is also one of the processes
used when creating internally aligned pay structures. (Milkovich, Newman & Gerhart, 2014, p.138)
There are several factors to consider when performing job evaluations; job content, required skills,
overall value to the organization, and the external market are only a few. While there are many items to
consider while performing evaluations, there is even more to consider when selecting an evaluation
method.
Three of the most commonly used job evaluation methods are ranking, classification, and point
method. While no method is perfect, each has their own set of advantages and disadvantages. The
ranking method could easily be considered the most simplistic of the three. Each job is evaluated based
on its overall value to the organization using the factors listed above and that value is then compared to
the value of every other position in the organization. After all comparisons are made, each job is
assigned a rank from most to least important based on the assigned value.
The ranking method would be a useful tool for a small business with a small number of jobs to
be evaluated, preferable 30 or less. In addition to being simple, this method is also relatively cheap to
implement. It becomes more expensive and less simple when the number of positions increases. The
largest disadvantage to this method is the level of subjectivity. In order to be most effective, the
evaluator determining the value should have a good base knowledge of every position in which they are
evaluating. If this person does not have a good understanding of each position then it is extremely difficult to determine its value, especially compared to a position they know equally little about
(Milkovich et.al., 2014, p. 141 -142).
The point method is one of the more complicated methods. The first step in this method is to
determine what characteristics of each position are valuable to the organization in terms of strategy and
objectives; these characteristics are called compensable factors. Each compensable factor is scaled based
on the degree to which they occur in the position and then weighted to determine an overall numerical
value to the organization. One of the main benefits of this method is that it less about comparing
positions against one another and more about determining value based on the organizational strategy
which is always a main focus of job evaluation. The main disadvantage of this method is the same as
ranking; it can be very subjective which is dangerous when the evaluator does not have a good
understanding of all positions (Milkovich et.al., 2014, p. 144-155).
The final method, which was used to evaluate the jobs at Whole Foods in this scenario, is the
classification method. When utilizing this method, jobs are classified into categories that have the same
basic description or very similar requirements. Within each category can be a series of levels depending
on the level of skill, knowledge, or experience that is required for that particular position. Although
compensable factors are used primarily in the point method, it is helpful to utilize these factors when
classifying positions based on the requirements. The benefits of this method is that it can be very simple
and unlike the ranking method, new positions can be added with ease as the category structure is easily
maneuverable and does not require a large amount of comparison to other positions (Milkovich et.al,
2014, p. 142-144). Assignment of Job Title
Job
A
B
C
D
E
F
G
H
I Job Title
Deli Associate
Sales Associate
Prepared Food Supervisor
Prepared Food Associate
Kitchen Associate
Stock & Display Associate Coordinator
Prepared Food Lead Associate
Regional Associate Leader
Stock & Display Associate Job Structure - Classification
Category
Level: Associates
1 (E-Kitchen Associate, I Stock & Display Associate)
2 (A – Deli Associate, B – Sales Associate)
3 (D – Prepared Foods Associate) Managerial/Supervisory
1 (G – Prepared Food Lead Associate)
2 (F – Stock & Display Associate Coordinator)
3 (C – Prepared Food Supervisor)
4 (Store Team Lead)
5 (H – Regional Associate Leader) Process and Factors
The compensable factors that were used while evaluating these positions were skill, effort,
responsibility, and working conditions. The first step in the process was to determine where each
position fell in terms of classification. Several of the positions has many of the same requirements with
minor differences which lead to the creation two distinct classifications of Associates and
Managerial/Supervisory. Each classification holds a group of positions that are comparable in terms of
the skills and knowledge that is required but may require a different levels of such skills.
The key characteristics that placed positions into the Managerial/Supervisory classification fall under the
responsibility compensable factor. The responsibility of supervising other employees including the
functions of interviewing, hiring, terminating and creating break schedules instantly increases its level in the hierarchy structure. These kinds of responsibilities also increase the level of mental effort required
for such positions which is another key characteristic that determined the placement.
Within the associate classification there are three levels. The Associate 1 level is comprised of
the Kitchen Associate (E) and the Stock & Display Associate (I). This level requires no or little previous
experience, have limited skill requirements, and are primarily physical in terms of effort required. The
Associate 2 positions, Deli Associate (A) and Sales Associate (B) require slightly more experience and a
high level of skill with communication and customer service. There is a higher level of fiscal responsibility
either with handling money or inventory, and there is a higher level of mental effort required. The
Associate 3 level position, Prepared Foods Associate (D) requires a higher level of previous experience
and a good knowledge of several store operations. There is a higher level of skill requirement,
introductory level training, and the working conditions require more flexibility which is more extreme
than the other associate positions.
The Managerial/Supervisory classification has five levels. The Level 1 position, Stock & Display
Associate Coordinator (F), has introductory level supervision responsibilities and training duties. The
effort for this position is still primarily physical. The Level 2 position, Prepared Food Lead Associate (G)
requires a higher level of experience has the responsibility of supervising all employees in the Prepared
Food department including hiring, developing and termination duties. This position requires a higher
capacity for mental effort. The Prepared Food Associate (C) falls into Level 3, requiring a high degree of
previous experience in supervisory roles. This position requires a high level of mentor effort and works
closely with the Level 4 Store Team Lead positions to make managerial decisions. Level 5 consists of the
Regional Associate Leader (H). This position requires a high degree of previous experience in managerial
roles, a strong knowledge of all business operations, and an extremely high degree of mental effort. Evaluation of Job Descriptions
The goal of a job description is to define the tasks, duties, and responsibilities that a specific
position would require. The provided Whole Foods job descriptions adequately described all of the
essential functions each position would perform but there were a few inconsistencies that would make
huge improvements. A few of the positions listed the reporting relationships associated with that
position, however this would be beneficial for all descriptions to have as it gives the perspective
employee a sense of where this position stands in the organization without look at an organizational
chart. Another feature that could be helpful to potential applicants is including educational requirements
in additional previous experience requirements. The provided descriptions did include what level of skill
for certain aspects are required, but education can be more specific which could be useful for applicants.
The most glaring detrimental factor in these descriptions is how vague most are when it comes
to the requirement of physical abilities. When listing the essential functions of a position, the physical
ability portion should be as specific as possible without limiting the scope of what could realistically be
required. This is such a significant factor when it comes to hiring especially with the strictness of the
American’s with Disabilities Act (ADA) (Fentin, 2014). There is a large amount of associated with the
statement ‘able to perform physical requirements of job’, which can lead to legal danger for any
organization.
Conclusion
Overall, the job structure should support the actual work flow of the organization in addition to
supporting the organizational strategy (Milkovich et.al, 2014, p. 138). The method of evaluation should
be designed to be equitable and fair to employees and whomever is performing the evaluations needs to
have a solid understanding of all positions they are evaluating. References
Fentin, S. G. (2014, December/January). A lesson about job descriptions. BusinessWest, 31(19),
25-44. Retrieved from WorldCat database. (Accession No. 100218202)
Milkovich, G. T., Newman, J. M., & Gerhart, B. A. (2014). Compensation (11th ed.). New York:
McGraw-Hill/Irwin.
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