John Lewis to give all employees bonuses
By Mathieu Gorse, AFP
March 17, 2014, 12:04 am TWN
LONDON--Far from the astronomical incentives accorded to a select few at Britain's banks, clothes-to-food retailer John Lewis Partnership is paying all of its staff an annual bonus worth 15 percent of their salaries, earning praise for its co-operative structure.
From the chief executive right down to shop assistants at the group's high-end supermarket Waitrose and department store chain John Lewis, workers will share a bonus pot totaling 202.5 million pounds (US$336 million) for 2013.
About 91,000 staff are receiving the equivalent of about two months' extra pay after John Lewis Partnership (JLP), whose stores are popular with Britain's middle class, enjoyed a rise in pre-tax profits last year, putting more pressure on its struggling rival Marks & Spencer.
Bryan Roberts, analyst at consultants Kantar Retail, said the co-operative or mutual structure at JLP, which sees the company owned by its workers, hands the group “a very real competitive advantage ... helping with staff retention, customer service and employee morale.”
He told AFP: “On the downside, the structure has been accused of leading to a lack of dynamism and entrepreneurialism ... but I think that point of view has been dispelled by the company's out-performance, innovation and willingness to take tough commercial decisions” in recent years.
It was a mixed showing for JLP in 2013, causing the group to reduce annual bonuses from 17 percent of salary a year earlier. Profit after tax fell 4.1 percent to 329.1 million pounds. The group is meanwhile faced with a large shortfall in the fund that pays out pensions to its retired workers.
Despite certain challenges, group chairman Charlie Mayfield recently said that 2013 had been another “good year for the Partnership.”
He added that “both Waitrose and John Lewis increased market share for the fifth consecutive year.”
The first John Lewis store opened in 1864 on Oxford Street — London's main shopping thoroughfare — while Waitrose joined the JLP structure in 1937.
Shareholder Pressure Absent
Analysts say John Lewis's structure frees it from the pressure that shareholders exert at its rivals.