IKEA Bonus Day Exceeds Expectations


European home-furnishings retailer IKEA said Monday that its offbeat bonus plan--throw a one-day promotion to lure shoppers, then distribute the proceeds to employees--proved even more popular than the hot-selling Swedish meatballs peddled by its in-store cafes.

IKEA’s 43,000 employees went home happy on Saturday after the company sold about $80 million worth of Scandinavian-flavored furniture at 152 stores around the world, which will translate into a per-employee bonus of about $1,800. IKEA had been projecting about $65 million in worldwide sales, or about $1,500 per full-time employee.

IKEA, which was founded in Sweden as a mail-order business but now is based in Humlebaek, Denmark, operates 13 stores and employs about 4,000 people in the United States.


Many companies use bonuses to retain valuable employees in a tight labor market, perhaps tying the extra cash to performance targets. IKEA also maintains a separate performance bonus plan based on individual store sales and costs.

But this latest bonus, dreamed up by IKEA’s eccentric founder, Ingvar Kamprad, is unusual because it directly distributes a day of gross sales to employees. Such a tactic, compensation experts say, links the worker’s interests with those of the corporation.

The bonus plan, designed to celebrate the new millennium and boost employee morale as IKEA launches an expansion, “achieved all of its goals. Everyone around the company is very positive,” said spokesman Joakim Gip, adding that nearly every IKEA store broke sales records Saturday.

“Now we have to wait another 1,000 years to do it again,” Gip quipped. “Actually, I wouldn’t be surprised if Ingvar Kamprad already is thinking up something else.”

In the early days of the 56-year-old company, Kamprad bankrolled a weeklong trip to Majorca, Spain, for all “IKEAns"--there were only 80 then--and their families as a reward for their hard work.

IKEA operates under an egalitarian philosophy. Every employee is known as a “co-worker,” and even the top executives furnish their offices with the company’s inexpensive, build-it-yourself furniture.

All full-time employees around the world will share equally, Gip said. Part-timers will receive a smaller amount based on hours worked.

“If you get $1,500 or $1,800 in China,” home to two IKEA stores, “it will take you much further than in North America,” Gip said. “But we’re all very excited to get our money.”