IKEA HR Policies - Case Study Example

IKEA HR Policies IKEA is one of the largest furniture manufacturing companies in the world, which, since it was founded has seen quite a lot of success all over the world. This company is based in about thirty-eight countries and has more than three hundred stores all over the world. In the developed world, it is one of the most recognizable brands and this has made it extremely popular with the consumers in these countries. IKEA is a company that, despite being a privately held company, has throughout its history, displayed a capacity for being able to manage the workforce within it. This skilful management of its staff in different countries has enabled the company to become highly successful, as those who work for it are motivated by the management ability of IKEA. The wide range of products that this company produces means that it has to hire and maintain a large workforce in order to be able to function effectively. Unlike other companies, IKEA is extremely careful with the management of its staff because of the need to make a profit continuously, but also to further the good reputation that the company has had since it was founded. Because of the skill displayed when handling such a diverse workforce from many companies, and being able to venture into countries, which speak different languages, IKEA has achieved success on the international scene where other companies take years to achieve the same. One would say that IKEA’s success is based not only on the quality of the company’s products, but also on how the people working for it are managed. One of the main reasons for the success of IKEA in managing the diverse group of people who work for it is the strong corporate culture within it. Corporate culture is the behaviour that is put in practice by the people who work within or work together with certain organizations. These are collective behaviours that are taught to those people who have recently joined the organization and it is these behaviours, which enshrine the ideals and objectives of the organization within which it is practiced. At IKEA, corporate culture has an influence on how the members of this conduct themselves in almost every aspect of their lives, in respect to their work, to create a good image. This behaviour affects how employees interact with their fellow employees, all their clients, and those people who have an interest in the company. The values at IKEA are based on the knowledge that has been gained in the history of this company from its founding as well as the existing knowledge of the company, which form the philosophies that hold it together (Meisler 2004, p.26). As a multinational company, IKEA has to have a strong corporate culture to ensure that, despite their diversity both in people and location, the stores it operates worldwide promote the ideals for which the company stands. This enables the consumers of the company’s products to have and receive the same expectations of IKEA’s services worldwide, hence uniformity in the services that customers receive. When recruiting new staff in its stores all over the world, IKEA tends to be extremely cost effective. One of the means through which it does this is by attaching leaflets, advertising job vacancies, on the furniture boxes that the customers buy as well as advertising on its website (Anderson, 2005). This ensures that the company is able to tap into its customer base to recruit new members to its team. The former method of recruitment has been found to be highly successful in the stores of such countries as Australia, where it was found that the response rate to the vacancies was much higher than the available vacancies. This company encourages both dynamism and the ability to work, as a team among its employees and this is often included in the advertisements of vacancies. This makes the potential employees of the company aware of what is expected of them if they are recruited. With the knowledge of what is expected of them, once employees are recruited, they work towards the furthering of the company’s ideals and objectives. The company’s strong leadership is one of the reasons why new employees come to adapt swiftly to its ideals. Leadership within this company is very important because it ensures that its day-to-day functions are running smoothly and that all the departments within it run as a single, cohesive unit. The efficiency of the company’s workforce has thus come to be ensured, and this has contributed to IKEA’s success on a global scale. One of the ideals of IKEA is the empowerment of its employees and one of the ways to achieve this has been giving them leadership positions in the stores globally. IKEA places a lot of value in its employees through its empowerment program, which ensures that the pool of employees with experience is promoted to management positions (Weinstein 2006, p.31). A leader selected from within the company is likely to know exactly how it works and will not need a lot of time to learn. The employee’s experience, which is likely to have spanned many years within the company, will work in his or her favour when conducting their duties and it is very likely that such an employee will get work done faster than a leader who would have been brought from outside. The experience gained within the company by a leader will ensure that he or she knows what it lacks and it has and this will enable him to work to strengthen further the stable parts of the store within which he has been appointed and to work on smoothing those that he thinks are its weaknesses. The knowledge of the strength and weaknesses of the company will ensure that he is able to use these effectively in making it more successful than its competitors make in the market. This leader is able to give the other members of the organization a sense of continuity because he is one of them and his experience with them has ensured that he understands how they work and will therefore not be quick to disrupt it. The selection of leaders from among current employees also helps to create a sense of loyalty towards the company, hence more dedication in their work. Since it was founded and because of its relatively fast growth, the workforce of IKEA has expanded globally. Every year, more employees are hired by the company so that it cannot only maintain its competitive edge against rivals, but also to ensure that all of its customer’s needs are fulfilled efficiently (Urde 2009, p.617). While IKEA should be commended for employing such a large number of people, the large number of employees has brought with it many challenges. The large number of employees has tended to slow down the decision making process within the company and it has made it harder for individuals within it to feel like they are making an impact. In the process, this may have led some of the top talent at IKEA to lose interest in working within the company and being attracted by the more conducive atmosphere that can be found among its rivals. Rival furniture companies to IKEA are maturing enough to attract the top talent and offer a real opportunity of making plenty of money by selling to larger companies. These companies have tended to poach the top talent from IKEA for furthering their own business interests. To curb instances, this company has, over the years developed an employee friendly policy that encourages its employees to be creative and to diversify their talents within the company. The growing aspirations of its top talent are not seen as a problem within this fast growing company. In IKEA, the top talent of the company is encouraged to pursue their aspirations by funding their personal projects and by giving them the freedom to develop within the company without any interference. One of the greatest strengths of this company is that it encourages flexibility, and this aspect enables the company to create more opportunities for career growth among its employees. In addition, through the employee empowerment program of the company, individuals are allowed greater decision making and planning for their career paths within the company (Casey 2005, p.6). In essence, this is not only be beneficial to the employees of the company, but it also benefits IKEA because of the constant development of new ranges of products to put into the market as well as being able to retain its top talent. The investment that IKEA has continued to put in its employees has helped to ensure that it retains a loyal and diversified workforce, which has contributed an immense deal to its success. Not only has the company retained its employees because of its friendly policies towards them, but it has also created a situation where it has been able to attract talented workers into its workforce. This has made IKEA one of the most sought after employers in the world, giving it a diverse pool from which to choose its future employees. One of the reasons why employees leave other furniture manufacturing companies is the relatively low pay to what they could be earning in other companies. Within the furniture industry, IKEA is considered one of the highest paying companies. This is despite the fact that it still presents itself as a company whose employees are not interested in the money but rather in the privilege of working for the company. This is no longer true considering the fact that, many people in the market-oriented world tend to be attracted by high salaries instead of the work they are going to do. One would argue that when other companies experience fast growth, they find it difficult to continue with the close relationship and understanding, which characterized them when they were founded. This is not the case with IKEA, which has continued to retain a close relationship with its employees. As it grows in size and continues to spread its tentacles all over the world, the large amount of money it makes has not negated its need to treat it employees fairly. It has instead kept its payment structure in favour of its employees, hence ensuring that it has stemmed the tide that would have been an exodus of its top talent to other companies. One of the strengths of IKEA is based on how it manages and treats its employees and because of this, it has managed to become one of the most sought after employers in the world. The management of employees at IKEA is based on the understanding that the company’s management has for its employees. Because of the employee friendly attitude of the management at IKEA, employees do not feel intimidated by their supervisors, and are in fact, encouraged to voice their opinions concerning matters that can be improved. The understanding that is developed by the employee’s supervisor enables him to determine the abilities of individual employees and this ensures that they are placed in positions within the company’s stores which will further its growth and achievement of its goals. Furthermore, the management’s understanding of the employees is designed to help the company to determine the areas whose performance needs to be enhanced as well as ensuring that the employees are provided with the opportunities that are necessary for the promotion of their professional growth. This process is done in meticulous ways, which gives the managers the opportunity to measure the payments that are made to their employees in comparison to the aims and objectives of the company. The close relationship between the employees and the management of the company provides the latter with the opportunity to make an analysis of the factors that determine how the employees perform over a certain period. It is a means through which IKEA’s management is able to be in a position where it is competent enough to provide guidance to its employees towards a path that will lead to their performing better in serving its customers (Taylor, 2007). The introduction of new technology to aid its employees in their work is one of the most important policies at IKEA. In many companies worldwide, it has been found that resistance to change is often related to the introduction of new technology in place of the old ones, which many employees are used to. New technology is immensely attractive to the younger generation of workers, who are often quick to adjust to its used, unlike the older employees who are the ones that tend to offer the most resistance to its use. To ensure that all the employees involved have adapted to the new changes, the management of IKEA organizes training in the use of the new technology for those who do not know how to use it. As the employees come to learn how to use this technology, and they find how much easier it is to use in place of the older system. In this way, the employees who have undergone training come to accept it as a fundamental part of their working environment. With this acceptance the desired technological changes in the company tends to be done swiftly, ensuring that the employees retain their high capacity of production and efficiency (Jonsson and Foss 2011, p.1086). The use of new technology enables the employees of IKEA to feel well accommodated at work. This creates an environment where they are able to work without any need for close supervision, hence enhancing their creativity. The fact that the employees of this company are in a good working environment helps in the increase of their productivity. In conclusion, because of globalization, corporate businesses have become larger and some multinationals and this has led to an intense competition between those companies, which. has led to many of these companies to look for every means possible to reduce the cost of production of goods while still making a profit. In the process, many companies have chosen to cut the wages of their employees as well as their jobs in a bid to maintain their competitiveness in the global market. This has, however not been the case with IKEA, which throughout its history has been working towards saving costs while at the same time protecting the interests of its employees. All IKEA employees are trained to do all that they can to ensure that their work does not add unnecessarily to the costs of the company. Because of this, the employees of this company have developed a culture of cost effectiveness that has over the years save the company billions of dollars in expenditure. Since the employees are treated as members of a family, the work environment has become a comfortable place for employees to work. The comfortable working environment has made IKEA one of the most sought after employers in the world since it puts the interests of its employees at the forefront of its policies. The way IKEA manages its employees globally is one of the factors that have contributed to its global success. References Anderson, J. 2005, Ikea to open store near Portland airport in 2007; Swedish home furnishings retailer plans to build on 19 acres at Cascade Station, Vancouver, Wash., Vancouver, Wash. Casey, B. 2005, "IKEAs story: commitment, charity, conservation", DSN Retailing Today, vol. 44, no. 22, pp. 6-6. Jonsson, A. & Foss, N.J. 2011, "International expansion through flexible replication: Learning from the internationalization experience of IKEA", Journal of International Business Studies, vol. 42, no. 9, pp. 1079-1102. Meisler, A. 2004, "Success, Scandinavian style", Workforce Management, vol. 83, no. 8, pp. 26-32. Taylor, L. 2007, The IKEA adventure, Eugene, Or., United States, Eugene, Or. Urde, M. 2009, "Uncovering the corporate brands core values", Management Decision, vol. 47, no. 4, pp. 616-638. Weinstein, M. 2006, "teaching the TOP", Training, vol. 43, no. 2, pp. 30-33. Read More