For the past 10 years, John Lewis Partnership has paid an annual partnership bonus of between 9% and 22% of annual salary.The bonus is based on profits for the trading year beginning each February, and is determined by the organisation’s partnership board. After any capital is held back for reinvestment, the remaining profit is distributed among its 64,000 employees.
Sam Hinton-Smith, a spokesman for John Lewis Partnership, claims employees place a high value on the scheme because the organisation also ensures it also pays market-rate wages.
He believes that profit sharing has advantages over alternative perks such as employee share schemes. "Obviously, it’s something we think is a fairly important part of the package. This kind of scheme doesn’t require any financial investment by our employees," he explains.