Whole word reading is the process of reading and remembering complete words rather than their phonetic pieces. This method of reading is often taught with the use of sight word cards or by giving students list of words and asking them to repeatedly write them out. Eventually this practice of rote memorization forces students to internalize the shape of each word until it can be recalled and used from memory.
Whole word reading is taught most effectively when it focuses on high frequency words like I, he, she, the, etc. Once students master the the easiest most common words teachers slowly add more words into their lesson plans and in time students develop a sizable breadth of words which they can use to as tools to decipher the meaning of other words in a sentence or story.
The whole word approach places a large emphasis on the ability to decipher unknown words based upon the context in which they are used.
If a learner has never seen seen the word unlocked or hasn't internalized the shape of the word the whole word approach to reading would require them to use the story for context and make an educated guess as to the exact meaning of the word. This method is a great way to engage imaginations and create a feeling of confidence when reading. However because there is so much guess work involved in whole word reading students will often be unable to decipher the correct word and/or meaning exclusively through contextualization.
One of the drawbacks of the whole word approach is that it requires educationally rich classroom environment that provides ample opportunities to focus on reading, writing, speaking and listening so that the learners are given the proper tools to understand how words are used in context.
With whole word reading you initially see much faster progress than phonetic reading but in the long run whole word reading is usually much slower. As time passes and vocabulary grows readers eventually merge the phonetic and whole word approaches into what would be considered an adult level of literacy.