Annual Report and Accounts 2016


John Lewis Partnership plc


49


Performance and pay


In the Partnership, pay is managed in line with our policy as set out in Rule 61 and Rule 62 of our Constitution. We believe that our approach to pay and benefits is a real area of differentiation. Our co-ownership model includes a Partnership Bonus which is unique to the market. In addition, we offer a range of other benefits. 92% of Partners say they value the range of benefits available to them.


Pay for Performance, now in its second year, has been instrumental in developing our successful ownership culture and reflecting our Constitutional Principles to reward Partners fairly based on their contribution.


As a result of the National Living Wage announcement made in the summer of 2015, we have made significant changes to pay ranges, with those closest to the National Living Wage changing most significantly. These changes came into effect on 1 April 2016.


In the long-term, and as outlined in the ‘4Ps: A manifesto for change’, the National Living Wage will raise the base pay of most of our Partners. If we want to maintain our position as a market-leading retailer with a differentiated total reward approach we must be proactive. It would undermine our performance and pay principle if we found ourselves in a position where most of our Partners were paid the same regardless of their individual performance, skills and/or achievements.


To enable us to continue to invest in our best performing Partners, we have simplified and refreshed our performance guidance in line with feedback from Partners and line managers. We have removed steps from the process to make it more streamlined and easy to use.


At Waitrose, we have implemented ‘Let’s Talk, Not Type’. This encourages on-the-spot feedback between line managers and Partners, reducing the amount of time line managers spend on administering appraisals. As a result, 61% of Partners surveyed felt they could complete more appraisals than expected. 84% felt they spent less time on the administrative process.


Progression


Most Partners increase their pay by developing skills and progressing within their current job. As a business, we are focussing more than ever on progression through learning. Supporting Partners to develop can provide opportunities such as escaping low pay, making meaningful choices about their lives and careers, maintaining their employability (within the Partnership or beyond), and enhancing their potential.


To improve the Partner experience, we are in the process of refining our mandatory training offer, and aim to reduce the time taken to do this by 50%.


Two years after its launch, our Partner Development website continues to offer a range of training for Partners and managers. New offers in 2015 include Divisional-specific learning such as the ‘Stock Management Toolkit’ for Waitrose, and ‘Love to Sell’ for John Lewis Partners. We have also added induction training, and a collection of learning resources for Partners looking to apply for new roles.


Our key strategic focus for 2015 has been introducing the concept of Learning Agility to the Partnership. An agile learner is well equipped to learn from their experiences and apply this knowledge quickly and flexibly. With a large proportion of our Partners having over five years’ service, the knowledge and experience our Partners possess is invaluable. Learning helps people find personal meaning and satisfaction in their work and this in turn can enhance personal happiness. In this way, learning agility aligns to Principle 1 and could potentially improve job satisfaction within the Partnership.


Vertical career ladders are becoming less relevant as we increasingly operate in different ways, and as Partners want more choice and flexibility. In the Partnership, Partners can progress within their role, with additions to their role, within function, across functions and to more complex or higher level roles. Progression can also be achieved through different experiences. We are developing guidance to help line managers and Partners understand how to build breadth and depth into their career journeys and progress within the Partnership.


Rule 61


The Partnership sets pay ranges which are informed by the market and which are sufficient to attract and retain high calibre people. Each Partner is paid a competitive rate for good performance and as much above that as can be justified by better performance. Partnership Bonus is not taken into account when fixing pay rates.


Inclusive ownership


Our ultimate purpose is the happiness of our Partners through their worthwhile and satisfying employment in a successful business.


We aim to ensure that our Partners’ experience of the Partnership is relevant, consistent and rewarding. Through our diversity strategy, we aim to treat Partners as individuals and to address their specific needs.


We aim to operate without discrimination and embrace diversity. Our aim this year has been on recruiting and developing people of all backgrounds, ethnicities and ages, with a focus on developing the talent of our BAME (Black, Asian and Minority Ethnic) Partners.


We want the Partnership to be representative of the communities in which we operate. Where we see disparities in this, we take action. For example, BAME people are well represented in our Partner population (comprising 15%, which is on a par with their representation in the general UK population). Currently 8.5% of the Partnership’s management positions are held by BAME Partners, and at more senior levels the proportion is just 3.7%. To address this, we will focus on recruiting and developing BAME Partners to ensure promotion and equal opportunity. The goal is for 10% of our management positions (Level 1-9) to be held by BAME Partners by 2020.


We have an established programme of reverse mentoring and have in place mandatory unconscious bias training for all Level 5 Partners and above.


It is important that our Partnership has a culture in which people can be themselves and thrive. We have made unconscious-bias training and diversity e-learning available to Partners to let them consider how we nurture a more inclusive culture in our business.


Rule 62


Pay rates must be decided with such care that if they were made public each would pass the closest scrutiny. Managers are responsible for ensuring that Partners are paid fairly in comparison with others who make a similar contribution.


It’s Your Performance


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