UNIVERSITY OF BEDFORDSHIRE FOREIGN TRADE UNIVERSITY

SCHOOL OF BUSINESS HO CHI MINH CITY CAMPUS

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END-MODULE ASSIGNMENT

Module: Human Resource Management

Code: HRM

POLICIES TO MANAGE AND DEVELOP HUMAN

RESOURCE OF IKEA

Student: Nguyễn Thị Trang

Student ID: 1805025154
Cohort: K57BF Class: A
Semester: II Academic year: 2019-2020
Lecturer: Phạm Hùng Cường

Examiner 1 Examiner 2 Student

(Signature & handwritten (Signature & handwritten Fullname) (Signature & handwritten Fullname)
Fullname)

Ho Chi Minh City, Dec 2019

 I. OVERVIEW
1. Introduction of IKEA

IKEA is an internationally renowned home furniture retailer. It has grown rapidly

since its inception in 1943. Today, it is the largest furniture retailer in the world,
recognized in Scandinavian style. Most of IKEA's furniture is packed flat, ready to
assemble by consumers. This allows for reduced costs and packaging. IKEA carries a
range of 9,500 products, including home furniture and accessories. This wide range is
available in all IKEA stores and customers can order multiple scopes online through the
included IKEA website. There are 18 stores in the UK so far, the first store opened in
Warrington in 1987. In July 2009, IKEA also opened a store in Dublin - the first store in
Ireland.

IKEA stores include restaurants and cafes serving typical Swedish food. They also
have small grocery stores that sell Swedish groceries, everything from famous meatballs
to jam. Stores are located all over the world. In August 2008, IKEA Group had 253 stores
in 24 countries, with more than 32 stores owned and operated by franchisees. It welcomed
a total of 565 million visitors to the store during the year and more than 450 million visits
were made on the IKEA website. IKEA's sales reached Euro 21.2 billion in 2008 showing
a 7% increase. The biggest sales countries are Germany, USA, France, UK, and Sweden.
In 2008, IKEA opened 21 new stores in 11 countries and is expected to open about 20
more stores in 2009 as part of its development strategy. Essays, UK. (November 2018).

2. Mission and vision of IKEA

IKEA is a "concept company". In 1976, Ingvar Kamprad released a manifesto, which

he called "a statement of a household salesman". At the heart of this proclamation are the
characteristics of the IKEA spirit that are repeated over and over, including enthusiasm,
frugality, responsibility, humility, and simplicity.

These are not clichés, but what IKEA is always dedicated to, not only in creating good
value products but also in the company's working environment.

Vision: “Make life better day by day for everyone."

Kamprad explained it this way: “In all countries and social systems, East and West, a
large number of unsuitable resources serve only a small number of people. In business,
too, too many new products and beautiful designs but do not reach the hands of most
people. IKEA's mission is to change this situation.”

Their recent mission is as follows: “To contribute to making life work better every day
for the majority of the people on the planet, we are always looking for ways to create a
product category diversities, convenient and beautifully designed appliances at low prices
so that the vast majority of the population can afford them.” Essays, UK. (November
2018)

II. POLICIES OF IKEA IN MANAGING AND DEVELOPING HUMAN

RESOURCES

“...Human Resource Management policies and practices are of primary importance to

the organization’s survival and long-term success.” (French, 2003, p. 73)

1. IKEA Human Resources Management

a. Relevance of Mission and Goals of IKEA to Human Resource Management

An effective Human resource manager in the organization ensures that the mission
and goals of the organization are clearly outlined so that all the organizational staff
starting from the top management to the employees knowing the mission of the firm and
are up to meeting these goals. Human resource managers who clarify the mission
statement of an organization improves the performances of the organization, for example,
the mission statement of IKEA Company is to create a better everyday life for as many
people as possible – with lower prices of goods which make it affordable to all people
regardless of their social class. This has enabled the IKEA Company to maintain its
position as a market leader, furthermore, it has facilitated the company to be recognized
worldwide and create customer loyalty towards the company. This is clear evidence that
the high performances of human resource managers can lead to the success of the
organization. The Human resource manager should further state the means of achieving
the organizational objectives both short term and long term, he should design effective
strategies to be implemented, select the team which is implementing those strategies with
the aim of attaining organizational goals. This is a very sensitive issue because it will
determine the future of the company and thus it needs careful implementation and control.
Both the human resource manager and the team which is responsible for implementation
should analyze the actual results of the strategies implemented and evaluate them against
the planned or expected results; if it does not meet the objectives of the organization then
the company should drop the strategy and maintain only those which are working.

b. Features of Human Resources System of IKEA

 IKEA working environment

IKEA consists of a diverse workforce, customers, suppliers, and stakeholders. The

diversity within the workforce is the central competency that provides an increased
competitive advantage. In the current global competitive market, engaging diverse
employees and including all levels of business processes is critical for the attainment of
the organization’s objectives. IKEA tends to capitalize on the diverse competencies
existing within the workforce to attain the set objectives.
 Actually, all employees are made to acknowledge different roles they play in the
organization and orient their skills, strengths, and perspectives towards attaining the set
goals. The employees’ competencies, strengths, and views are valued by the organization.
Moreover, IKEA tends to encourage a participatory and inclusive workforce.

At the organizational level, the firm organizes teams with complementary skills to
achieve particular goals. As well, line managers are allowed to come up with individual
strategies that enable the attainment of the required objective.

The firm promotes integrated teams of site leaders and line managers working together
to generate an all-inclusive culture where respect for individual contribution is valued
(Starkey, 2009). The teams provide leadership, knowledge-based opportunities, and
enhance communication amid individual employees and immediate management besides
assisting in the realization of the managerial multiplicity strategies.

 The culture of IKEA

IKEA has practices, management behaviors, and activities that determine the culture
of the organization. For instance, management embraces diversity within the workforce.
Diversity is one of the cultural aspects that have led to the success of the organization. In
fact, being a large corporation the diversity within the workforce cannot be avoided. As
such, the firm must embrace diversity within all work processes in order to be successful
(Starkey, 2009).

The manner in which the organization manages diversity determines its success. IKEA
values diversity in all levels of the organization and work processes (Starkey, 2009).
Besides diversity and inclusion, the firm values other cultural aspects including corporate
citizenship, trust, and respect, safety, integrity, quality, hard work and success along with
innovation.

 IKEA rituals, artifacts, and vales

IKEA culture supports diverse aspects of artifacts, services, models, approaches,

beliefs, expectations, and values. Actually, the employee interactions in regards to these
aspects have a direct influence on the brand and performance of the organization. The
impressions are mechanically improved and sustained by the shareholders and
workforces. The senior management of IKEA embraces the shared values, norms, beliefs
and behaviors in the organization.

The open culture used by IKEA is strong enough for any fresh employee to identify
him/herself with. The Company enjoys long term success owing to the innovative
practices and behaviors linked to the culture. The culture is innovative, people-oriented,
aggressive, detail-oriented, stable, team-oriented, and outcome-oriented.

Therefore, it characterizes employee habits, beliefs, symbols, systems, working

language, norms, visions, and collective values. In strengthening the culture with the
employee, inter-group and employee interaction with stakeholders and customers is
subjective (Henry, 2008).

 IKEA leadership style

Leadership style plays a critical role in the motivation of employees. The management
and leadership style removes obstacles that alienate employees from work processes.
IKEA adopts the style that creates positive changes and inspires employees towards
attaining the goals of the organization.

The transformational type of managing employees is one such style of leadership.

Transformational leadership is characterized by its inspirational nature and positive
changes it creates in an organization. In order to achieve increased performance among
employees, IKEA takes into consideration the concerns of employees. The leadership
style focuses on encouraging the workforce to attain the goals of the organization. In
effect, the leadership style is geared towards creating positive change among employees
(Sadler, 2003).

c. Explain Guest’s model of IKEA

The guest model of Human Resource Management is declared primarily by David,

which includes six main dimensions of assessment, such as Human Resource
Management results, strategy, practice, behavioral results, performance results, and
financial results. This special model enables the organization to determine the difference
between effective human resource management and effective human resource
management. The model usually works based on identifying the skills and abilities of
workers and familiarizing managers with the need to improve employee skills and
knowledge and get better performance. In the context of IKEA's functions, it has been
found that the organization uses this model for the purpose of earning employees' loyalty
and trust in business.

This model is also used to carry out strategic planning with the aim of achieving the
desired target level. The model basically facilitates IKEA's assurance of the optimal use
of resources within the company and the higher returns from the same. In addition, the
guest model also indicates a healthy relationship between management and employees at
work. It has been determined that IKEA can extract a higher level of revenue by
implementing this model in its functions and will also enhance the communication skills
of its employees and cause them to communicate effective information at work
(Alfes.et.al, 2013). The guest model will prove to be useful to IKEA management as it
will contribute to a wide range of business activities within the organization.
Figure 1: Guest model

d. Specific Approaches in Managing of IKEA

 People

IKEA employs diverse approaches in managing the administration capability, staff

prospective, and skill echelons. The personal administration, performance reward, as well
as talent, ensure proper expectancy and age-band gap organization.

The corporation manages people based on diverse backgrounds, preserve and nurture
motivation, and lead groups of experts (Henry, 2008). The approaches used by IKEA help
the management in studying the requirements of employees and customers to ensure that
they possess the capabilities and resources necessary for performance (Henry, 2008).

 Culture

The management is committed to ensuring that the IKEA styles, norms, values, and
beliefs are intact (Henry, 2008). The held and fixed manufactured article, rites, norms,
outlooks, expectations, and morals have a direct influence on the administration. Thus, the
management involuntarily adjusts and sustains the organizational culture through
stakeholders and employees (Henry, 2008).

 Systems

The IKEA procedures in which operations are executed encompass the decision-
making, processes, and system structures. The firm employs proper human resource
databases and inventories that might be needed for legality submission (Sadler, 2003).
The inter-IKEA systems enable the valuation and evaluations of value addition besides
augmenting efficiency through traceability and consistent operations knowledge. The
systems foster the mainframe systems (CRM and ERP) prompt growth (Sadler, 2003)

 Organization

IKEA manages the organization in terms of reporting lines, job roles, and structure.
The proper organizational design makes IKEA to boasts of a well-driven regeneration and
implementation strategy (Sadler, 2003). IKEA possess flat organization with uncluttered
and operator driven novelty challenge bordering the business (Sadler, 2003). The initiated
approach helps IKEA to deal with any problems that arise from such challenges.

2. IKEA Human Resources Training

 a. Training needs for staff at different levels in the organization.

Training is the most important aspect of the growth of IKEA if the employee is not
properly trained they are not able to meet the expectation of the top management.
Following are the training needs at different levels:

Management level: Employees at the management needs high training skills because
they are handling the employees in the organization and also give them technical
assistance to handle the situation. At this level, training assists the developing the
potential by having arguments with the team members, practical guidance, etc. In relation
to this, it has been identified that job training methods may help the organization to
improve the skills and knowledge along with the experience of the employees.

Customer level: Under this employee’s good communication information and also
have the talent to identify the needs of the clients. Management needs to identify the
problems of the employees and try managing it giving proper training to the employees
(Ford, 2014). The major objective of the employees is to satisfy the needs of the
employees in a better and effective way.

Operational level: Employees in the operation level have the quality to identify the
nature of the task and put the efforts in order to complete the task.

b. Evaluation of the suitable technique

The evaluation of the best technique in the organization assists the IKEA to identify
the level of training among the employees. Assessment of the training needs among
employees can be done on the basis of feedback, observation, questionnaire, etc. This all
these methods facilitate the organization to assesses the different problems faced by the
employees while completing the task. The management of IKEA carries out the training
session in order to train the employees and then observe the performance of the
employees thus it easy for the organization to carry out the poor performer at the
workplace. After completion of the training program, I will collect the feedback of the
employees in order to assess the mistakes in the training program (French.et.al.2012). The
training program is host by various management leaders so they can easily increase the
capabilities of the employees at IKEA.
 As a manager, he or she will assess give the feedback form to the employees that
contain the question related to the training program.

c. Values-base
For such values around diversity, togetherness, and simplicity to thrive and apply to all
business decisions, it is vital every leader lives and breathes all 10 values all the time,
says Hagild - country HR manager for IKEA UK/IE.

“When we recruit leaders we choose people who have inclusivity and emotional
connection to our values,” she says. “Our recruitment is values-based.”

Then it is about regular training to refresh leaders’ understanding of these values.

Values do not just come through leaders; IKEA has to train them. What this company is
doing that is really different is IKEA creates space where it talks about values. IKEA has
two-day events where it is all about values. The business pairs people off and one part of
them will talk about the value of simplicity, for example, while the other is listening and
coaching. By doing that IKEA says "we permit you to do that in your business".
 This training is centered around the very Scandi-sounding concept of walking
coaching, something filtering into all events and more informal catch-ups at IKEA: “A lot
of the units have started to do development talks where they walk together with co-
workers rather than sitting in an intimidating room with white walls,” reports Hagild. “It
is really relaxed so your personality comes through and you talk and think more
naturally.”

3. IKEA Human Resource Development

a. Development and learning opportunities at IKEA

The quick rate of technological changes requires regular training of the workforce to
remain relevant in their respective roles. Training the workforce enhances skills and
knowledge essential to the development of new products. Organizations that are high
performers invest time and financial resources in educating and training the workforce.
The training, development and learning opportunities are aligned to the needs of IKEA.

Trained employees are typically competent based on the training they receive.
Learning behaviors that make individuals improve their performance necessitate
rewarding to sustain competitiveness. The approach ensures that IKEA benefits from the
training mediated by the workforce’s skills, behavior, and attitudes.

Conversely, technology-oriented researches indicate that teamwork plays a

fundamental role in eliciting innovation. Teamwork influences the organizational
performance and improves productivity, innovativeness, and morale. IKEA implements
professional team development initiatives to encourage the teams to work as a unit
(Henry, 2008). The IKEA’s holistic approach to conducting business begins with the
philosophy that the strength of the organization is based on respect for people, learning
and development.

b. Contribution of learning styles while planning and designing a learning

Learning curve plays a vital role in the development of the skills of the employees in
the organization and also assists IKEA to provide self-managed learning to the
employees. Different types of learning styles have been identified in the organization that
contributes more while designing the HR planning.

Contribution of learning style: It also helps IKEA to make the effective decisions and
organizing the training as per the demand of the situation like what kind of information
must be delivered, when and how it will be delivered among the subordinates thus they
are able to perform in a very effective manner. It has been identified that while selecting
the learning styles the capabilities of the single employee are being assessed and it helps
the business to gain a competitive advantage.

Planning for training event has been identified that learning styles for the development
and training of the employees in the organization must be well planned. All the
employees give their best in order to complete the task in the organization. But lack of
training among the employees is just the failure of the plan in the organization (Kolb,
2014). Learning styles and theories help the organization to deliver quality services to the
clients and also help IKEA to take the relevant decision to a particular situation.

It can be said that with the help of effective learning style management could design
the quality working pattern among the employees.

4. Performance Development & Pay for Performance and Financial Incentives of

IKEA
a. IKEA performance management processes

The IKEA performance management encompasses the majority of tasks associated

with performance. Strategic management identifies talents in all areas to ensure quality
work (Henry, 2008). Besides, the corporation manages underperformance, targets the
imminent presentation, and engages its employees in achieving the maximum profits. At
large, one may absorb that IKEA is known for rewarding its dealers, evaluating the past
presentation, and complying with the entire business requirements.

b. Performance management methods used by IKEA

Performance management is basically a process being carried out by the managers to

measure performances of the employees on the basis of their roles and responsibility
within the organization and their performances as well. It is very much important for the
management to manage the performances of the employees so that to make them meet the
requirements of the organizations. In context to IKEA, the manger adopts wide ranges of
techniques for monitoring the employee performances and managing the same for future
terms. Some of the major techniques are:

 Checklist and weighted checklists: The manager in this method mainly develops a list
of statements of each and every behavior whether effective or ineffective among the
employees (Van Dooren.et.al, 2015). This largely helps the manager to represent the
poor or outstanding behavior of the staff members at the workplace. This method
would help IKEA in reducing the biasness on the performances and would provide a
basis to discuss upon the performances.
 Management by objective: This technique would help the management to define the
objectives clearly and convey the same among the workforce. The management of
 IKEA would be able to decide specific deadlines for the staff members which has to
be met by them. The management mainly monitors the employee performances and
discusses the performance with the employees.
 Graphic Rating Scale: The management of IKEA had adopted this method with the
purpose to increase the performances and the productivity of the employee along with
the revenue enhancements (De Waal, 2013). The graphic rating scale allows the
manager to rank the staff members ranging from 1-5 based on their behavior and
performances at the workplace. This helps in evaluating the performances of the
employees effectively.
c. The approaches used to manage the employee welfare in IKEA

Employee welfare is been considered to be the most important aspect of an

organization. In order to manage the employee welfare at the workplace, IKEA makes use
of different initiatives which increases the motivational levels of the staff members
effectively. Making various initiatives such as training programs, personal assistance to
resolve their personal issues would help in inclining the employees towards the
organization. In addition to this, IKEA could also make use of the job security
management program which provides assurance to the employees working for more than
one year (Watson, 2013). The management even facilitates the employees with profitable
retirement plans and would be receiving the pension after the job for future survival. The
basic intention of the management of IKEA behind these approaches is to acquire the trust
and loyalty of the employees and motivate them to work towards the organizational goals
effectively. These approaches help in ensuring employee welfare within the organization
and make the employees more productive and effective towards their jobs.

d. Implications of health and safety on human resource practices

 The management of IKEA is always concerned with making the environment which is
free from accidents and injuries. The impact of these legislations can be easily seen on
IKEA. For the safe environment, the government has made a lot of rules and policies
which are needed to be followed. Proper training sessions are been made for making the
workplace accident free (Stone, 2013). Currently, IKEA is following international
standards for employee’s safety and health and ensures a healthy and risk-free
environment in the workplace. Various safety types of equipment are been established in
the workplace. Placards regarding the awareness of safety are been placed on the walls.
For example: holding the railings while going downstairs, no smoking, put off electric
switch after use, wear shoes, etc. These create awareness among the employees to adopt a
safe working culture.

The management of IKEA ensures enhanced and smooth working by taking care of an
individual’s health and safety. IKEA even promotes its employees to give proper
feedback regarding the working culture of the workplace. Maximum interaction among
employees makes the chances of mistake very less. Providing facilities like neat and clean
canteens, bathrooms, toilets, clean drinking water to ensure a healthy working
environment. Management organizes programs for removing the burden from the
employees.

III. MANAGEMENT LESSONS FROM IKEA’S HUMAN RESOURCE

STRATEGY
1. Connectivness and cultural embeddedness

Ingvar Kamprad has built a resilient organizational culture. The company has
managed to keep its identity in a fast-moving and changing environment over the last
decades. This is shown through their strong brand image and is IKEA’s core competitive
advantage. The values and beliefs of the man behind IKEA are embedded in the strong
organizational culture and behavior which encourages creativity, innovation,
entrepreneurship and hard work between all levels of employees. These are values that
has contributed to the company’s success and sustainability. The company makes sure
that they keep on being innovative in order to be ahead of competition. Every three years
the best twenty designers of the company meet in order to design the new product line of
IKEA. (Chris Kats, 2014)

2. Choosing the right people for the right job

Recruitment and selection is one of the core activities of HR planning, a dynamic

procedure and a crucial task for the company’s success. IKEA management understands
the importance of acquiring, engaging and retaining employees and customers in order to
grow their business through sustainability. Everything starts with recruiting the right
people that share the same values as the company and therefore have a good fit with the
organizational culture.

Hiring should involve transparent recruitment procedures with no favoritism or

nepotism. In order for an organization to choose the right candidate and promote cultural
embeddedness the recruitment procedures should be built with this on mind.

IKEA has a policy of hiring based on values as well as on skills. The company is
looking for people with enthusiasm and togetherness, persistence and humbleness, ready
to take responsibilities and accept challenges from day one. They are all in business
together and potential employees, called co-workers in IKEA, should demonstrate that
they are ethical, creative, encourage diversity, and are willing to collaborate together to
overcome everyday challenges and problems.

3. Happy Employees = Happy Customers

After selecting the right talent for the organization’s positions, the Human Resources
Management team has the responsibility to provide training and development. This is the
only way for people to grow with the company. Training can also give more meaning to
their work experience. Having happy and satisfied employees in a safe and inspirational
workplace is a necessary condition in which to also have satisfied customers; this, in turn,
leads to organizational success.

At IKEA, training starts from day one and it involves the rotation through various
areas of the business. This provides a better understanding of the business and thus
employees are able to serve their customers more effectively

IV. REFERENCES

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Kolb, D.A., (2014). Experiential learning: Experience as the source of learning and
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Cantu, P., (2019). Ikea Strategic Human Resource Management [Blog post]. Retrieved
from https://ivypanda.com/essays/ikea-strategic-human-resource-management/
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