Ten weeks extra pay for John Lewis partners

I was shopping at Waitrose this evening, an enjoyable Thursday evening stroll choosing the fresh foods and wine for the weekend ahead. Was there a noticeable buzz in the air? Were the staff at my favourite Waitrose store in downtown Windsor walking with an added jauntiness to their step? The answer is probably yes.

Today, staff at John Lewis and Waitrose were told that they were receiving the biggest annual bonus in more than ten years. The annual payout to partners of the business has been fixed at 20 per cent on the back of a similar rise in the pre-tax profits the combined department store and food chain. The bonus is the equivalent of an extra ten weeks pay. In total John Lewis will distribute just over £181 million in bonus payments - the average payout will be £2,625. The final distribution of profit to the 69,000 partners is actually much higher - if we include a pension contribution of £83m and other benefits of £60m.

Here is the press release from the John Lewis partnership.

For several years I have been a big fan of the Waitrose brand and the John Lewis chain. There is a noticeably different quality of service (in my experience) in their stores and that cannot be divorced from the partnership model developed over many decades. If economics is really all about incentives, the profit sharing scheme outlined above must engender better management-employee relations and a greater sense of esprit de corps. These are difficult times for even the most seasoned and highly valued retailer, but in a slowdown, whilst some consumers dive into the value chains, others make a flight to quality.

BBC news: John Lewis profits and bonuses up

Independent: Why is John Lewis giving staff a 20% bonus and why is it doing so well?