'Seeing someone cry at work is becoming normal': Employees say Whole Foods is using 'scorecards' to punish them

Whole Foods has a new inventory-management system aimed at making stores more efficient and cutting down on food waste. And employees say the retailer's method of ensuring compliance is crushing morale.

The new system, called order-to-shelf, or OTS, has a strict set of procedures for purchasing, displaying, and storing products on store shelves and in back rooms. To make sure stores comply, Whole Foods relies on "scorecards" that evaluate everything from the accuracy of signage to the proper recording of theft, or "shrink."

Some employees, who walk through stores with managers to ensure compliance, describe the system as onerous and stress-inducing. Conversations with 27 current and recently departed Whole Foods workers, including cashiers and corporate employees — some of whom have been with the company for nearly two decades — say the system is seen by many as punitive.

They say many employees are terrified of losing their jobs under the new system and that they spend more hours mired in OTS-related paperwork than helping customers. Some are so fed up with the new system that they have quit or are looking for other jobs. In addition to hurting morale, OTS has led to food shortages across Whole Foods stores, they say.

12 PHOTOS
11 ways to save at whole foods
See Gallery
11 ways to save at whole foods

Be wary of dairy in glass containers

If you grab milk or cream from a glass bottle, you'll be charged for the price of the bottle in addition to its contents. If you must purchase the glass bottle version of the product, be sure to bring it back to Whole Foods next time you're shopping and customer service will give you a voucher.

Photo credit: Getty

Bring your own bags

Whole Foods will offer you a five to 10 cent discount from your total for bringing your own bag.

Photo credit: Getty

Don’t buy Whole Foods pre-packaged containers of fruits and veggies

You'll end up paying way more and receiving way less. Always opt for the full version of the fruit or vegetable and prepare it yourself.

Photo credit: Getty

Take advantage of bulk meat deals

Deals on bulk amounts of certain meats vary from location to location. Ask the butcher about what bulk meat deals your local Whole Foods is offering.

Photo credit: Getty

Look for bright yellow tags

Special deals (that only last for a few days or a week) are unadvertised outside of the store but can be found while shopping by their bright yellow tags.

Photo credit: Getty

Check out specialty online coupons

You can enter your local Whole Foods store online and print off coupons and deals that are specific to your local Whole Foods--some coupons are valid for up to three months. 

Photo credit: Getty

Buy cases of products you like and save 10 percent

Whether it's protein bars or wine, Whole Foods will discount a case-sized version of your product for 10 percent, a well worth it investment if it's a product your consuming often.

Photo credit: Getty

Shop the Friday-only sales

Stores will offer specialty Friday-only sales that can offer you major one-day savings.

Photo credit: Getty

Shop the Whole Foods 365 value brand

The store's value brand is extremely well-priced and will offer you the healthiest version of discounted products, as there will be a significantly lower amount of preservatives than other discount brands, according to Whole Foods.

Photo credit: Getty

"Like" your local Whole Foods' Facebook page for news on special deals and discounts

Deals will vary from store to store and are always advertised through social media.

Photo credit: Getty

Bring your own containers when shopping the bulk section

When weighing your bulk purchase at checkout, Whole Foods will subtract the price of the weight of your container if you bring your own from home instead of using the ones provided in the store.

Photo credit: Facebook

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

On calls with investors, Whole Foods executives have said that OTS has helped cut costs, reduce shrink, clear out storage, and enable employees to spend more time engaging with customers. And employees, as well as outsiders, have said that the company's decentralized system was inefficient and needed a change.

But the new system goes too far, according to the employees who spoke with Business Insider.

"The OTS program is leading to sackings up and down the chain in our region," said an employee of a Georgia Whole Foods. "We've lost team leaders, store team leaders, executive coordinators and even a regional vice president. Many of them have left because they consider OTS to be absurd. As an example, store team leaders are required to complete a 108-point checklist for OTS."

All the employees spoke on condition of anonymity for fear of retribution. Whole Foods did not respond to requests for comment on this story.

Scorecards and tests force employees to comply with new rules

Whole Foods enforces compliance with OTS by instructing managers to regularly walk through store aisles and storage rooms with checklists called "scorecards" to make sure every item is in its right place, according to nearly 80 pages of internal company documents reviewed by Business Insider.

Business Insider

If anything is amiss or there is too much excess stock in storage, departments lose points on their scorecards.

"Every item in our department has a designated spot that is labeled or marked," an employee of a Colorado Whole Foods store said. "If that item is even an inch outside of its designated spot ... we receive negative marks."

The walks also involve on-the-spot quizzes, in which employees are asked to recite their departments' sales goals, top-selling items, previous week's sales, and other information.

Failing scores — which qualify as anything below 89.9% — can result in firings, employees said.

Store managers conduct these tests, internally referred to as "walks," twice weekly, according to the company documents. Corporate employees from Whole Foods' regional offices also carry out walks once monthly, and ultimately stores must pass a walk conducted by executives from Whole Foods' global headquarters in Austin.

Employees who spoke with Business Insider say the walks have instilled fear across every department of Whole Foods' stores.

"I wake up in the middle of the night from nightmares about maps and inventory, and when regional leadership is going to come in and see one thing wrong, and fail the team," a supervisor at a West Coast Whole Foods store said. "The stress has created such a tense working environment. Seeing someone cry at work is becoming normal."

The maps this employee referenced are diagrams drawn up by Whole Foods' corporate office that dictate where every item in the store should be placed.

"The fear of chastisement, punishment, and retribution is very real and pervasive," another worker said.

Whole Foods is morphing into a conventional grocery store

Employees, suppliers, and industry analysts have all said that Whole Foods' old system of managing inventory before OTS was highly inefficient and needed to be updated.

"Whole Foods had a very decentralized approach, which adds complexity, and complexity adds cost," said Jim Holbrook, CEO of private label and retail consultancy Daymon Worldwide, which recently started working with Whole Foods.

Under Whole Foods' old purchasing system, buyers at the store and regional levels had more power to decide what to sell in their stores. With OTS, Whole Foods' corporate office in Austin is making more of those decisions. This approach is bringing Whole Foods' business model more in line with those at conventional supermarkets like Kroger and Safeway.

It remains to be seen whether this business model — and OTS — will work for Whole Foods. Holbrook believes it will. He says Amazon, which purchased Whole Foods last year for $13.7 billion, will be able to help Whole Foods work out the kinks with OTS.

"Amazon is very good at managing logistics behind the scenes," Holbrook said. "Whole Foods will be a better shopping experience as a result."

Many employees are also hopeful that Amazon will fix the new system.

"We all just hope that Amazon will walk into some stores and see all the holes on the shelf," a 12-year employee of a Midwest Whole Foods store said.

'It's a collective confusion'

Whole Foods says order-to-shelf gives employees more time to engage with customers.

"The team members are really excited about" order-to-shelf, Whole Foods executive vice president of operations David Lannon said last year on a call with investors. "They're really proud when they're able to achieve that, which is lower out-of-stocks, less inventory in the store, being able to be on the sales floor talking to customers and selling more products."

Several store employees balked at that claim. "On my most recent time card, I clocked over 10 hours of overtime, sitting at a desk doing OTS work," a supervisor at a West Coast Whole Foods store said. "Rather than focusing on guest service, I've had team members cleaning facial-care testers and facing the shelves, so that everything looks perfect and untouched at all times."

Some employees said recent labor cuts have made it difficult to keep up with the demands of OTS. "It's running everyone into the ground and they absolutely hate it," a high-level employee of a Midwest Whole Foods said.

12 PHOTOS
Best things to buy at Whole Foods
See Gallery
Best things to buy at Whole Foods

Freshly baked bread 

Photo: Getty

365 Everyday Value Greek Yogurt

Photo: Getty

Speciality cheeses

Photo: Getty

Oats, grains and beans in the DIY bulk section

Photo: Getty

Frozen foods, i.e. pizza and turkey burgers 

Photo: Getty

Alternative milk products

Photo credit: Getty

Frozen berries

Photo: Shutterstock

Raisins and dry fruit in the DIY bulk section

Photo: Getty

Spices in the DIY bulk section 

Photo: Getty

365 Everyday Value Olive Oil

Photo: Getty

Freshly baked goods from the bakery section 

Photo: Shutterstock

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

Many Whole Foods employees at the corporate and store levels still don't understand how OTS works, employees said.

"OTS has confused so many smart, logical, and experienced individuals, the befuddlement is now a thing, a life all its own," an employee of a Chicago-area store said. "It's a collective confusion — constantly changing, no clear answers to the questions that never were, until now."

An employee of a North Carolina Whole Foods said: "No one really knows this business model, and those who are doing the scorecards — even regional leadership — are not clear on practices and consequently are constantly providing the department leaders with inaccurate directions. All this comes at a time when labor has been reduced to an unachievable level given the requirements of the OTS model."

Two recently departed employees specifically cited lack of training as a key reason why OTS is, in their view, failing.

"The problem lies in lack of training, and the fact that every single member of management from store level to corporate is over tasked and overburdened," said one former corporate employee who was in charge of conducting walks at stores on the East Coast.

Others said it appeared that whoever wrote the program had no experience working in stores.

"In the beginning, we actually had a checklist where one task was to initial that you initialed off another task," said one employee who was involved in OTS training at several East Coast stores. She said that duty was quickly dropped, but that it was emblematic of how the implementation of OTS has gone.

"The 'nano' management is downright insane," she said.

If you work for Whole Foods and have information to share, email hpeterson@businessinsider.com.

NOW WATCH: Take a look inside Amazon's grocery store of the future — there are no cashiers, registers or lines

See Also:

SEE ALSO: 'Entire aisles are empty': Whole Foods employees reveal why stores are facing a crisis of food shortages

Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.