Stuart Hampson, former chairman, John Lewis Partnership

LONDON, England (CNN) -- It is one of the UK's most successful retailers, with an annual turnover of over $10 billion. Founded in 1864 by John Lewis, it was his son John Spedan Lewis who turned it into the unique business model it is today.

It is a partnership -- that means all 68,000 employees who work across its businesses actually own the business and share in its profits. And while pay levels vary, the percentage bonus of their salary does not. Last year everyone got 18% of their pay as a bonus - from the high rollers to the shelf stackers.

CNN's Todd Benjamin spoke with the man who headed the company for 14 years -- Stuart Hampson -- and started by asking him how the business operates in practice.

Hampson: So, every single shop assistant, truck driver, computer programmer, has a stake in the business. And when we come, at the end of the year, to divide up our profits, all of our profits that we don't need to reinvest go back to the staff, back to the people who've created those profits.

Benjamin: And how do you define success in the partnership?

Hampson: Success we define on three criteria. First of all, the happiness of our partners, are our partners enjoying working here? Are they getting satisfaction? Secondly, are our customers satisfied? Are they not just turning up for a transaction; are they really loyal to us in the long term? And, thirdly, are we making sufficient profit? Just succeeding on one of those three criteria won't guarantee long term success, so we keep all three in view.

Benjamin: That's interesting, the priority that you put that in: Profits came number three.

Hampson: Yes, because I think profits flow from the other two. If you start off by saying our objective is to create profit, then it's difficult; you say, the other two, if they come along, that's fine. We say, the happiness of our partners and their satisfaction from being part of a successful business comes first. You can put the partners or the customers first; the partners look after the customers and make sure that they're satisfied. And if you get those two right, profit just comes. And so, targeting the first two is how you create profit, targeting profit is not a way to long term sustainable success.

Benjamin: And your idea of employee happiness, it extends beyond the shop floor. For instance, you have vacation centers that employees can go to, you offer classes in windsurfing and so forth for employees. If an employee has been here twenty-five years, they get six months paid leave.

Hampson: All of those things are the benefits of looking at somebody in the round. If we want them to feel that partnership isn't just a place of work, it's a place you feel committed to, then there is something more than just working hard and getting a bonus.

Benjamin: But you make it sound very utopian in a sense, or very Pollyannaish. Obviously there are politics and other things that happen within the partnership?

Hampson: This isn't a soft option and partnership can never be regarded as a way of avoiding hard decisions, failing to demand high performance from your staff, failing to take some tough decisions. I mean, if we have a shop that needs to be closed, we have to close it. We do it very carefully, we look after our staff, but if a business isn't succeeding then we can't duck the difficult decisions because we are a partnership. Otherwise we wouldn't succeed long term.

Benjamin: Do you think the partnership model is the right model for all businesses?

Hampson: I wouldn't say its right for all businesses in the form in which it is here at John Lewis. But the concept of employee engagement at all levels, I do believe is right. No matter what sector you're in, enabling employees to feel that they really have a stake, that the success of the business which they create will give them some benefit, is right for all businesses. E-mail to a friend