Is my boss allowed to do this? If not then what should i do?

my boss has one of my co workers keeping an eye on everyone in the warehouse to make sure everyone is doing what they're supposed to be doing..by him doing that they reward him with tickets to baseball games, NASCAR etc. and they also pay him extra money...now im only 19 and i only been here for 1 year and started to realize this and im new to the working life but is it like this everywhere that i will apply to? and can my boss get into trouble if i were to rat him out to the president of the company?