At most companies, once the handbooks are distributed, the rules stay as they are -- often for longer than they should. But at Whole Foods, it's understood that the handbook will be revised whenever there's a good reason to do so. A couple of years ago, for instance, management was concerned about the number of in-store accidents and the rising cost of workers' compensation insurance. So it initiated a safety-education program in hopes of reducing injuries. Subsequently, it included a two-page section in the handbook outlining safety procedures; since then, accidents have declined.
Another recent addition is compensation information. Since 1986 there's been a detailed chart that summarizes what one can earn at various levels throughout the company. This, too, was initiated by management, but it's been well received. It's brought a level of realism to the company, Mackey says, letting people evaluate for themselves whether they want to work toward a new position.
Some of the more popular changes in the handbook have been suggested by employees. In 1986, for example, several people inquired about the company's long-standing employee-discount program. For years, it had excluded produce and meat because, as the handbook explained, the profit margins in those areas were always thinner. Was this still the case? Management looked into it and found that it wasn't. So the latest handbook provides for a 20% employee discount on everything. The next edition will reflect a change in the dress code that was approved last summer. After much haggling, employees are now allowed to wear shorts. A task force of employees and managers hammered out the details -- no cutoffs or running shorts are allowed, only khaki shorts with pockets.
Since the first handbook was compiled, a new edition has come out every year; it's now grown to nearly 70 pages. To streamline the production, the company keeps everything on a floppy disk. Even though Whole Foods is several times larger than it was when the first version of the handbook appeared -- sales now exceed about $45 million and there are 750 employees -- the process hasn't changed. Nor, for that matter, has the purpose. "It helps us give people a sense of the past, the present, and the future," says Mackey. "It's how we tell them about the game we're playing."
Of course, the Whole Foods handbook isn't the only way employees learn the game. It's part of a communications process that's central to how Whole Foods operates. There are regular meetings, both within individual stores and companywide, to share operating reports, for example. And new employees aren't entirely dependent on the handbook for their information -- they also have a one- or two-day orientation session. Mackey's approach to the handbook, with all its explanations of why things are done the way they are, is based on his belief that better communications leads to a better, more profitable business.
Because this approach depends on a high degree of openness and trust between managers and the people they manage, it may not be for everyone. At Whole Foods, for example, once something is written down, employees can challenge managers, and the managers have to be willing to explain their actions.
"In our company," Mackey says, "it's a collective process. We try to build consensus. If people don't have input, it isn't alive for them. But if you invest time and energy explaining things, employees take the whole program more seriously." And that, he says, is the whole idea.
BY THE BOOK
The essential ingredients of a great employee handbook
It's easy to fashion an employee handbook around a laundry list of dos and don'ts. But if you're looking to generate a higher level of interest -- and commitment -- from your employees, you may want to do more. As Whole Foods Market's John Mackey has found, a handbook that combines the theoretical with the practical can be enormously helpful to both new employees and veterans. Here are some things to keep in mind:
* Explain the mission. Employees are much more sympathetic to what you're trying to accomplish if they understand the overall context they're operating in. Somewhere along the line -- sooner rather than later -- you should tell them what that framework is. "The handbook is a great vehicle for passing along your goals," Mackey says. Whole Foods' handbook, for instance, devotes 10 pages to company philosophy and the importance of customer service.
* Stick to the basics. You can't cover everything in elaborate detail -- not without turning people off and undermining the bigger themes. So don't try. "If it's too long," says Mackey, "they'll blow it off." Rather than going into all the fine points of health benefits and stock options, Whole Foods Market's handbook provides a good summary -- and then tells people how to get more information.
* Plan for change. Even the best handbooks require frequent updating. But the process by which revisions come about can be a critical factor in whether employees take it seriously. At Whole Foods Market, a new version of the handbook comes out every year, and employees are encouraged to play an active role in making it more timely. Many of the changes are initiated by employees. "As much as possible," says Mackey, "this needs to be a collective effort. If people don't have input, it won't be alive for them."
