John Lewis staff have been informed they face the prospect of smaller pay rises under new proposals being considered to give the business more flexibility as its turnaround continues.
The department store chain and its Waitrose food arm have been consulting on ways to “reset” its current payment policy and put the ailing chain on a more “sustainable” footing, according to The Telegraph.
The proposals would see senior leaders handed more power to control performance-linked pay increases and would likely mean a “smaller number” of staff would qualify for the highest tier of salary increase in the future.
John Lewis spends £1.8bn a year on staff wages on full-year sales of £10.5bn.
Due to the business structure, partner pay is raised by a set amount each year and all employees can earn more money if they hit performance-linked targets.
However, under proposals being considered, management would insert an amendment saying performance-linked pay rises would be offered “unless there are exceptional circumstances where this should not apply”.
Another caveat being considered would be adopting the pay policy “unless there’s a reasonable need not to, such as conserving resources”.
In a briefing in January, staff were told: “Our aim is to reward exceptional contribution each year, but there may occasionally be years where we’re not able to because it depends on how the Partnership is performing, critical investment we need to make and a variety of external factors.
“Our approach must be sustainable so contribution-related pay will likely be smaller than in the past.”
Any changes to performance-related pay are separate from the Partnership bonus and John Lewis staff council members are due to discuss them in the coming weeks ahead of a vote in March.
A John Lewis spokesperson told The Telegraph: “As an employee-owned organisation, we put our Partners first and remain committed to rewarding their hard work.
“We are simply being transparent with Partners – creating a level playing field and setting clear expectations around what they need to do to achieve additional performance-related pay.”