Workplace Democracy in Practice: John Lewis
Workplace democracy sounds great, but how exactly does it function?
There are not any high-profile democratically run companies in the United States. However, that is not the cause for the UK. John Lewis has been run by its employees for nearly a century and is the model for the government’s recent EOT push. So how does this democratic workplace work, and how effective is it?
John Lewis is a high-end British department store with locations throughout the UK. It employs around 80,000 employees (or partners), who are collectively given a say over how the business IS run. This is done through the partnership council and partnership board. The Partnership Council is made up of 58 democratically elected councilors. It is able to make recommendations and dismiss the chairman. However, it seems to lack strong decision-making power. The Partnership Board is made up of both appointed and democratically elected leaders. The board is where major policy is primarily addressed and is headed by the chairman. The Chairman is the face of the company and carries a responsibility to ensure its mission. The Trust is another important element, as it ensures the constitution and democratic practices are maintained. Beyond democratic institutions, John Lewis also has rigorous profit-sharing schemes, ensuring equal employee bonuses each year. Through these levels of administration, employees are given considerably more control than most companies.
However, John Lewis is not without its critics. Dr. Abby Cathcart, who has extensively researched John Lewis, found that it was not always living up to its democratic constitution. For instance, partners do not own a stake in the company; the trust does. Therefore partners do not democratically control the capital of the company. Moreover, that capital is not distributed equally, giving rise to a corporate hierarchy. Initially, the constitution stated that no one was to be paid more than 25 times that of the average worker in London. However, the constitution was amended in 2012 to make that 75, a movement away from the equitable mission of John Lewis’s constitution. Dr. Cathcart also points out that managers and partners have different conceptions of what partnership even means. Managers highly value loyalty and have resigned partners to a more submissive role in the company decision-making process, according to Cathcart.
While Dr. Cathcart’s criticisms are important to keep in mind, John Lewis’s model works better than most. In practically all conversations surrounding workplace democracy, John Lewis is centered. It has been consistently endorsed by both Labor and Conservatives in the UK. John Lewis shows how successful democratic businesses can be while also showing some of the pitfalls other businesses ought to be wary of.