Employer profile: John Lewis Partnership

Case study: Sporting challenge is a winner at John Lewis

Chris Husbands is a fitness adviser in the sports department at the Oxford Street branch of John Lewis.
Specialising in large fitness equipment, he is part of a team of four who advise customers on fitness and explain how to get the most out of the store’s products.

Husbands has been with the John Lewis Partnership for 32 years in various roles, and has taken advantage of various benefits, but what really grabbed his interest was the group’s Partners in Sport initiative. In particular, Husbands gets involved in sports coaching, which he has found gives him the opportunity to take up a longstanding interest and passion.

“For me, sport and fitness is a real passion,” he says. “This gave me the opportunity to get back into athletics, obtain updated coaching qualifications, and to help the club I used to compete in.

“The elements of coaching really relate well to business. Coaching is an important skill for organising yourself and your family life, your work and your business life, and for any goals you want to attain.”

John Lewis Partnership’s co-ownership philosophy brings generous rewards for its staff, says Tynan Barton

With a vision of co-ownership that is as alive today as it was 80 years ago, the John Lewis Partnership ensures the happiness of its employees is still at the heart of everything it does. When John Spedan Lewis became a partner in his father’s department store business in the early 20th century, he wanted to create a culture that improved the working conditions and spirit of the firm. He achieved this by making all employees partners in the business and giving them a share in the profits.

Today, the partnership model is still working to these aims and is a key factor in shaping the company’s reward strategy,particularly when looking at future objectives. Andrew Clark, head of reward, says: “As a co-owned business, we can take a slightly longer-term view than some other organisations. We will continue to look at how we can improve and strengthen the organisation, even in these times, and look at how we can innovate, drive better value for customers, and how we can get a better reach into that customer base. That will involve investment into bricks, clicks, people and organisational arrangements.”

The ‘clicks’ Clark refers to are internet shopping – one of the biggest challenges facing not only John Lewis, but most retailers. Clark says that with economic conditions likely to remain challenging for the foreseeable future, the retail areas of the group (John Lewis and Waitrose) will focus on how customers access and want to use shops. “We are looking at much more of a multi-channel approach in both divisions, in terms of how we give customers opportunities to engage with the business,” he says. “That drives a different type of approach from a personnel perspective: somebody who is a multi-channel expert has a different set of skills to somebody who is a great seller in a deli counter or a furniture department.”

Clark says the group’s benefits package is shaped by three factors: the need to understand exactly what the organisation needs to do to meet market requirements to remain competitive; what it means to be a great employer; and what the organisation wants to do in terms of co-ownership benefits, or what to spend on reward.

These factors feed into its HR strategy, which is, in turn, based on commitments of responsibility, influence and business success. “It is about ensuring we can actually meet those commitments to employees within our HR strategy, particularly in the benefits field,” says Clark. “Does our benefits strategy maximise the leverage that the partnership can give, both in cash terms and in expertise and facilitation terms, to allow partners to take advantage of opportunities that they could not do themselves? The other thing is looking at how we can encourage a sense of belonging to a community. The summary will be to make sure we are positioned as a great employer but are also leveraging the benefits of co-ownership, because that is something that really does differ for us.”

Staff can also take advantage of subsidised benefits that include five yachts on the River Hamble in Hampshire to try out sailing, social clubs, wine clubs, football clubs and curry clubs. The group also owns five hotels where staff can stay, which receive about 30,000 visits a year.

With employees spread across the country in offices, warehouses and stores, the partnership recognises that its workforce encompasses many different skillsets and benefits needs. “There will be a whole set of core needs that are the same and are important, such as discounts, but there will be differing sets of priorities,” says Clark.

The group operates its voluntary benefits package, PartnerChoice, which includes employee discounts and leisure activities, in-house. This is managed by a team that includes regional leisure benefits managers and in-store co-ordinators, to make it easy for staff to give feedback on existing benefits, as well as suggestions for the future.
“We can really get employee opinion embedded in what we do in terms of that benefit provision,” says Clark. “And because we can drive such a large number of people through that benefit, we are able to negotiate pretty good opportunities for our employees with some suppliers.”

Partnership bonus

Under the partnership model, employees share in the organisation’s success and take advantage of one of its most valued benefits: the partnership bonus. Each year, profits over and above reinvestment in the business are shared among all staff. In 2011, the bonus was worth 18% of each employee’s salary, the equivalent of nine weeks’ pay, and amounted to a total bonus payment of £194.5 million.

In addition to the tangible benefits and leisure opportunities the company offers, it also promotes healthy lifestyles and involvement in local communities through its Partners in Sport programme, an initiative to get staff involved in the spirit of the London 2012 Olympic Games. Launched in 2008, the programme enables staff to try out a sport or activity for the first time, or get involved in coaching at local clubs. The four-year programme set out to recruit 800 employees as active sport coaches, and has reached 540 in year three. Half of these employees have made a commitment to deliver coaching within their community.

“Giving an employee a skill to get engaged and involved in the community builds their confidence, learning capability and interpersonal skills,” says Clark. “There is a whole halo effect that, while benefiting the employee individually, also benefits the community. And those skills are being brought back into their day jobs in the business.”

Total reward statements

Clark believes the partnership is becoming more sophisticated in its benefits aims. One example is total reward statements (TRS), which were introduced to give staff a clearer idea of their entire package. Clark says that although surveys illustrate that staff appreciate benefits, total reward statements offer more clarity on their individual entitlements. “It also allows us to move into a debate about how we want to use that benefit spend money, and you cannot really have a debate about it until employees are clear about the value and how it affects them.”

The group is also looking at ways to provide information to staff in media they feel comfortable with, such as Twitter, Facebook and quick-response codes on its paper TRS. “We have employees with 45-plus years of service who will want to access a book of benefits in a particular way, and we have those joining us at age 16 or 17 who are into technology and accessing media,” says Clark.

The organisation has also looked at facilitating bigger events for employees, such as taking over theme parks Thorpe Park or Alton Towers for a day. “What we are trying to do is get a width of benefits in there, and make sure we meet the demographics of the business much more effectively, and move away from perhaps a more paternalistic approach to benefits provision,” says Clark. “That is not a criticism, it is just a need to evolve to an approach where we can really reflect the width and diversity of the organisation and provide a range of benefits and activities for all employees, whether they are 16 or 80, full-time or part-time.”

So, while the country remains in dire straits financially, the John Lewis Partnership is continuing to invest in staff to ensure it is ready to seize the uplift in the economy when it comes.

John Lewis partnership at a glance:

Headquartered in Victoria, London, the John Lewis Partnership opened its first store on Oxford Street, London in 1864. The partnership took its legal form in 1929 when a trust settlement was created and profits were made available for distribution among all employees.

The partnership now owns 35 John Lewis stores across the UK, 29 of which are department stores and six John Lewis At Home. It also owns 271 Waitrose stores, an online and catalogue business, a production unit, a farm and five hotels. For the half year to 30 July 2011, it saw gross sales of £4.05 billion, and an operating profit of £111.5 million.

As a co-owned business, the group refers to its 76,500 staff as partners.

Career history: Andrew Clark

Andrew Clark joined the John Lewis Partnership in 1990 through its graduate training programme and has held a number of roles, ranging from sports department manager in Newcastle to training manager in Peterborough, and now head of reward.

Clark manages the group’s benefits spend, which he sees as a challenge, but is proud of what it involves. “I am proud of being given this responsibility when you look at what we offer, how we choose to invest in employees in more significant ways than others may do, having pride in what we deliver, and the choice we offer.

“I am proud we can get significant levels of uptake in a lot of events. There is nothing better than going to an event, say Alton Towers, to see [staff] and their families having a fantastic time. I am proud of my team who have made that happen.

“The fact I am heading up a function that can bring so much pleasure to [staff] because the business has chosen to make that a priority, gives me real pride.”

Benefits at John Lewis Partnership

Pension:

A non-contributory defined benefit (DB) plan for all staff after three years’ service.

Healthcare and wellbeing:

Dental insurance (voluntary benefit).
Eyecare (voluntary benefit).
Private medical insurance for senior employees.
Bikes for work.

Group risk:

After five years’ service, every employee accrues up to six months’ full sick pay.
Death-in-service benefit of three-times annual salary.

Cars:

Car ownership scheme for senior staff.

Bonus and shares:

Partnership bonus giving all staff a share of profits from the previous business year.
Share incentive plan allows staff to invest all or part of their bonus tax and national insurance free, if held for five years.

Staff discounts:

After three months, all staff get a 15% discount at Waitrose and 25% discount on most items in John Lewis stores.
Holiday
22 days plus bank holidays, increasing to six weeks after three years’ service. Managers and staff with 10 years’ service get 30 days plus bank holidays.

Work-life balance:

All employees may request flexible working arrangements.
Six-month sabbatical after 25 years.
Carer’s leave.
Childcare vouchers.

Leisure:

Clubs and societies such as sailing, drama, music and photography.
Concert and theatre ticket subsidies and discounted cinema tickets.

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