The moment when staff at John Lewis and Waitrose are told the size of their bonus is always much-anticipated. This week’s announcement will be no different, except in one respect – staff will probably be handed a fraction of the usual 10% to 18% of salary. Last year it was 3%, this year it could be as low as 2%.
Under a more conventional business structure, the bonus might have disappeared altogether, but John Lewis Partnership is an employee-owned organisation and must listen to the concerns of its 81,500 staff working in 50 department stores and 338 Waitrose shops.
A report by thinktank Ownership at Work has found that employee ownership, whether achieved through direct shareholdings or an employee-owned trust, proves popular wherever the company operates and whatever the industry.
“When you are an owner you recognise the need to boost your skills levels,” says the report. “You know that the company’s productivity feeds directly into your pay packet and the company’s success. There is no need to fake enthusiasm or force yourself to go the extra mile when the business in hand is very much your business.”
Admittedly, all the companies in the report have grown since becoming employee-owned and have yet to suffer the kind of sales decline and cost increases that have put John Lewis on the rack. But many have disaster planning in place – or at least plans to cope with a contraction in sales – that staff have been involved in compiling, which has in turn made workers feel more secure.
Employee ownership usually starts with a gift. John Lewis handed the Peter Jones department store to workers in the 1920s. Employee ownership at the engineering firm Arup and the chemicals firm Scott Bader, named after Ernest Bader and his wife, Dora Scott, date back more than 50 years, while more recent examples include Richer Sounds, donated by founder Julian Richer, and Riverford Organic Farmers, the vegetable-box provider started by farmer Guy Singh-Watson.