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Starting in 2014, Ikea will add an annual bonus contribution to its employees’ retirement accounts—including 401(k) plans in the U.S. and similar defined contribution plans in other countries—if pre-agreed-upon global targets are reached, the Swedish-based home-furnishing giant announced in December 2013.
The profit-sharing contribution is in addition to the company’s existing 401(k) match. For the first year, Ikea said globally it will contribute $137 million (€100 million) to this program, called “Tack!” (Swedish for “Thank you”).
Under the new rewards program:
“We want to show appreciation and gratitude for our co-workers’ loyalty and contribution,” said Peter Agnefjäll, CEO and president of the international Ikea Group. Added Mike Ward, president of Ikea US: “We feel confident that the Tack! program will be an incentive for co-workers to stay and grow with Ikea.”
Tack! is being launched only a few months after the announcement of the One Ikea Bonus Program, a performance-driven bonus system for hourly and salaried full-time and part-time workers, paid annually when set goals are achieved.
By providing incentive-based bonuses as both direct compensation and as retirement account contributions, “We believe that these two programs will strengthen the Ikea Group as a great place to work, today and in the future,” said Agnefjäll.
Ikea employs 136,000 workers in 26 countries. In the U.S., more than 44 percent of Ikea employees have five-plus years of service. As a result, nearly 5,700 could be eligible for the first Tack! payout.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
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