Here's Why Whole Foods Lets Employees Look Up Each Other's Salaries

It was originally called Open Book Management. The theory is that the more employees know about how an enterprise functions, the better they will understand how they contribute and the more motivated they may become to enhance their performance.

The overarching concept is now more generally known as a subset of the philosophy that underpins what is commonly known as transparency.

In Whole Foods case, as the following article explains, the enterprise's founder wanted everyone to gain insights into how the complexity of task,  effort and value everyone made was related to their compensation. This was part of a broader approach to management of people who work at Whole Foods and those who shop there despite its generally higher prices.

The company is perennially ranked as one of the best places to work and its financial results reflect the dedication of its customers to the company's high quality and broad selection despite the access they have to less expensive alternatives. The success of its approach suggests that the information people have, the happier they will be about the decisions they make based on that knowledge. JL

Alison Griswold reports in Business Insider:

If workers understood what types of performance and achievement earned certain people more money, he figured, perhaps they would be more motivated and successful, too.

Have you ever wondered how much money your boss makes? If you worked at Whole Foods, you could look it up and find out. Leaders of the supermarket chain believe in keeping employees as informed as possible, even when it comes to pay. Under the company's open policy, staff can easily look up anyone's salary or bonus from the previous year — all the way up to the CEO level.
The unusual Whole Foods policy is designed to both encourage conversations about salary among staff members and to promote competition within the company, according to "The Decoded Company: Know Your Talent Better Than You Know Your Customers," a new book by entrepreneurs Leerom Segal, Aaron Goldstein, Jay Goldman, and Rahaf Harfoush on innovative management practices.
Whole Foods co-CEO John Mackey introduced the policy in 1986, just six years after he co-founded the company. In the book, he explains that his initial goal was to help employees understand why some people were paid more than others. If workers understood what types of performance and achievement earned certain people more money, he figured, perhaps they would be more motivated and successful, too. 

"I'm challenged on salaries all the time," Mackey explained. "'How come you are paying this regional president this much, and I'm only making this much?' I have to say, 'because that person is more valuable. If you accomplish what this person has accomplished, I'll pay you that, too.'"
Beyond making compensation data available to all employees, Whole Foods also has its managers post their store's sales data each day and regional sales data each week. Once a month, Whole Foods sends each store a detailed report on profitability and sales at each of the chain's locations. In fact, in the late 1990s the widespread availability of so much detailed financial data led the SEC to classify all of the company's 6,500 employees as "insiders," according to a 1996 story by Fast Company.
Mackey and others at Whole Foods believe that a culture of shared information helps create a sense of a "shared fate" among employees. "If you're trying to create a high-trust organization, an organization where people are all-for-one and one-for-all, you can't have secrets," he says in the book.
For their part, the authors applaud Whole Foods' practices. They contend that its open policies prove the benefits of experimenting with data and using information to establish a "direct relationship between an individual's decisions and their impact on the business" — something the grocery chain accomplishes by giving each employee high-level access to the company's financial data, and therefore a greater stake in the business.
"Whole Foods is an intriguing example of a company that has successfully bridged the gap between soft-hearted values and logic-driven business acumen," the authors write. "The combination has resulted in a highly motivated workforce with a deep sense of community who value productivity."