Employee Participation in John Lewis Partnership - Case Study Example

Employee Participation Table of Contents Introduction 3 Discussion 3 Employee Participation 3 Employee Participation in John Lewis Partnership 4 Conclusion 6 Reference List 7 Introduction The contemporary global business market is highly competitive in nature and firms are looking forward to seek out for new ways to increase their productivity and efficiency thereby increasing its competitive advantage. One of the most sought after method to achieve higher productivity and efficiency is by increasing the level of employee participation. The level of employee participation largely determines the individual performance of the employees, thus gaining a high level of employee participation leads to the overall improvement of the organization (Summers and Hyman, 2005). This paper focuses on the significance of employee participation and how it can be accomplished by an organization to achieve its goals and objectives. It also covers the practices of John Lewis on the ground of people management and achieving high levels of employee participation. Discussion Employee Participation The concept of employee participation suggests that all the employees are involved in the major organizational decision making and they are being valued as a major asset of the firm. In perspective of the organization, employee participation is a major personnel management tool to improve the motivational level of the employees and increase the level of employee engagement. The participation of an employee towards his organization is not only in terms of fulfilling his roles and responsibilities, but also in terms of mental and emotional involvement (Redsteer, 2014). It develops team work within the employees thereby increasing their individual efficiency. Involving the employee in the decision making process allows the higher authority to generate a wide pool of ideas to choose from. At the same time, it also creates a sense of belongingness among the employees when they find that their contribution in the organization is playing a major role in its success. According to Summers and Hyman (2005), the employee participation is of two types, one is financial participation and the other is work-related participation. The financial participation can be divided into two particular approaches. The first one is to distribute shares to the employees. This approach assumes the fact that the employees are also the owners of the company and deserve to receive the share of the profitability of the company. This approach induces a positive behavioural response among the employees who gets motivated after receiving the monetary reward as a result of their hard work. Offering shares to the employee also means that the employer is considering the employees as an integral part of the organization. The second financial approach is offering flexible pay scale, which suggests that the employees can receive added monetary bonus based on the company’s profit or individual performance. Offering performance based incentives increases the motivational level of the employees, thereby further improving the performance level of the employees (Price, 2011). The work related participation suggests that the involvement of the employees can be increased by taking care of the work related issues of the employees. The higher management often develops close relation with the employees and takes care of their interest in terms of proper payroll, offering rewards and appreciation, offering proper training and guidance to improve their performance. This as a result induces higher levels of employee engagement among the employees (Lundy, 2008). Employee Participation in John Lewis Partnership John Lewis Partnership is a UK based retail chain, which operates under two brands John Lewis and Waitrose (John Lewis Partership, 2015). The Waitrose segment offers grocery and household products and the John Lewis primarily specializes in electronic items. Both of the business units are operated through a very unique business model, which the company has termed as ‘the partnership model’. This model of business considers the employees of the company to be the company owners and apart from the fixed salary they also receive a portion of the company’s profit. The mission statement of the company suggests that it seeks to invest and improve the business by taking care of the employees (SkyNews, 2013). Any strategic decision taken by the company involves the input from the employees. The partnership of the employees indicates that the company dearly cares for all of its employees. The partnership stands of the ground of strong trust that the company has on its employees. These members who form the partnership share a common responsibility of the company’s welfare and in return they receive profit, knowledge and power. This democratic nature of the company’s human resource management has been successfully returning the effort for 75 years. John Lewis has achieved the highest level of employee retention in the industry as the partners feel to be a part of big family. It has also been evidenced that the revenue generation and the gross profit of the company has recorded a steady rise, which clearly suggests that the partnership model has been successfully able to contribute to the success of the firm (Street, 2006). This business model of John Lewis Partnership suggests that the company has taken effective steps to greatly increase the employee participation. The company primarily follows a combination of financial and work related participation model. John Lewis has been successfully able to increase the motivational level of its partners by treating them as a part of the company (Woods, 2012). This as a result increased the level of employee engagement among them and they involuntarily committed themselves towards organizational welfare and success. In light of the theory of psychological contract, it can be stated that there exists a non-written agreement between the employer and employee where a particular exchange of duties take place (Chand, 2015). In simple words it can be described that if the organization shows care and commitment towards the employees, then the employees will also exhibit the same response towards the organization. John Lewis’ business model has created a close relationship between the employer and the employee by offering the monetary reward in terms of shares of profit along with their contribution in the decision making process, which has increased the level of the employee engagement. The company has convinced its partners that its organizational mission is not only to make money for the owners, but also for the employees as well. This strategic action perfectly falls in line with the employee participation (John Lewis Partership, 2015). Offering shares of the profit to every employees means that the employees are receiving their share of hard work and offering ideas. This as a result creates a strong feeling among the employees that they are closely involved to the company and their participation in their daily schedule is making such a big company run. Thus the employees are driven with a sense of ownership and not merely by their roles set by the employer. It has been evidenced that from the theory of employee engagement, the employees who feel a sense of involvement towards his organization are most likely to move beyond his designated roles and offer more service towards the firm (John Lewis Partnership, 2014). The company has also ensured that the employees are receiving the best rewards and privileges in the industry as compared to any other rivals. John Lewis has taken another step further to improve the motivational level of its partners and drive to work even harder. The company has introduced a scheme called “Employer of Distinction”, which states that it offers the highest level of privileges, care and monetary reward to its employees. These strategic actions have allowed the company to sustain in the highly competitive market environment and ensure high level of productivity from its employees (Woods, 2012). The value generation model of the company is circular one as opposed to the linear model of most of the companies. The strategic model ensures that business policies of the company do not come in direct conflict with the financial goals of the company. The partner-customer-profit circle suggests that the value generated by the highly satisfied and motivated partners for the customers helps the company to generate higher level of profit, which in turn is distributed among the partners. Thus the cycle of value generation is self sustaining in nature (Street, 2006). Conclusion The employee participation in an organization can be achieved by employing several strategic methods. However, the organizations must keep in mind that irrespective of the methods employed by the firm, it needs to create a perception of belongingness among the employees towards the organization. The theoretical perspective of the employee participation suggests that the participation of the employees can yield higher level of employee engagement, which in turn will increase the individual productivity of the employees. An employee’s involvement in the organizational activities such as decision making and determining the success of the company through their hard work creates a sense of ownership that in turn motivates them to voluntarily commit themselves towards the welfare of the organization. The business model of John Lewis clearly indicates that considering the employees as the business partners has helped the company to increase their motivation. The company asks for their ideas and involves in the decision making process, which as a result creates a sense of belongingness among them, thereby driving them to work harder. Moreover, most importantly the employees are given the shares of the company’s profit as an added monetary reward to the employees. Thus, it can be stated that fostering higher level of employee participation leads to high productivity and sustainable business operations. Reference List Chand, S., 2015. Employee Participation: Meaning and Features of Employee Participation. [online] Available at: [Accessed 17 April 2015] John Lewis Partership, 2015. A guide to employee ownership. [online] Available at: [Accessed 17 April 2015] John Lewis Partnership, 2014. In the hands of our Partners. [online] Available at: [Accessed 17 April 2015] Lundy, O., 2008. Strategic Human Resource management. 4/e. London: Palgrave Macmillan Price, A., 2011. Human Resource Management. 4th ed. Hampshire: Cengage Learning Redsteer, A., 2014. What is employee Participation & Empowerment? [online] Available at: [Accessed 17 April 2015] SkyNews, 2013. John Lewis: Profits And Bonuses Rise Strongly. [online] Available at: [Accessed 17 April 2015] Street, A., 2006. Releasing profits to partners at John Lewis Partnership. Strategic HR Review, 5(4), pp. 12 – 13. Summers, J. and Hyman, J., 2005. Employee participation and company performance. Yorkshire: Joseph Rowntree Foundation. Woods, D., 2012. Interview with Tracey Killen, group personnel director at the John Lewis Partnership. 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