HRM Practices in IKEA: A Case Study Review

HRM Case Study Review
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Table of Contents
Introduction................................................................................................................. 3
Company Overview.....................................................................................................3
LO1 Explain the purpose and scope of Human Resource Management in terms of
resourcing in your chosen organisation with talent and skills appropriate to fulfil
business objectives.....................................................................................................4
LO2 Evaluate the effectiveness of the key elements of Human Resource
Management in an organisation..................................................................................5
LO3 Analyse internal and external factors that affect Human Resource Management
decision-making, including employment legislation.....................................................6
LO4 Apply Human Resource Management practices in a work-related context.........7
Conclusion.................................................................................................................. 8
Reference List.............................................................................................................9
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Introduction
Human Resource Management is the essential body of all organizations, effectively
working to manage the organizational workers in order to improve the productivity of
the organization and gain competitive advantage (Cascio, 2018). Every organization
has HR department whose function is to oversee employee participation and
performance, training and development sessions, offering rewards to the employees,
enhancing employee relation, framing policies, taking decisions for the benefits of
the company, and most importantly making the employees aware of the various
benefits, compensation provided to them in the company. The HR department is
responsible for bringing about change in the organizational structure and polices.
This reports brief about the various HRM practices followed in IKEA, thereby
improving the standard of the company and also developing employee relation. The
government of UK has framed many laws to protect the rights of the employees
which are discussed in this report. Employees develop a healthy relation with the HR
department and assure that the productivity and the brand images reaches to
superior position in the market.
Company Overview
IKEA is known as a foreign based company deals with selling furniture, apparels and
even home accessories. This company was originated in 1943 by Ingvar Kamprad.
The company operates in 411 locations globally with employee strength of about
194,000. Revenue earned by the company is €35.074 billion by the year of 2016
(Ikea.com. 2018).
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LO1 Explain the purpose and scope of Human Resource Management in terms
of resourcing in your chosen organisation with talent and skills appropriate to
fulfil business objectives
Explain the purpose and the functions of HRM, applicable to workforce
planning and resources in your chosen organisation. [P1]
Figure 1: HRM Functions
Source: Created by Learner
Traditionally, HR department only planned after exploiting the staffs but the new
HRM functions operates in three major different types such as operational,
managerial and advisory. Some of them are discussed below:
Operational Functions:
Training and Development: Training gives an opportunity to the employees to
enhance their skills and contribute to the productivity of the organization. Training
creates a pool of talents in the company and brings in innovation in the strategies. As
employees are hired outside the organization, it can be that they may lack some
skills required by the company. In that scenario, training helps to make the
employees up to date to the skills required by the company. Being trained, the
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TrainingandDevelopmentPerformancemanagementLabourRelationsHRPlanningRecruitment,SelectionandIntroductionPerformanceandRewardManagement

employees get the opportunity to develop themselves, promote to an upper position
with better pay.
Compensation and offers: The HR department oversees that each employees are
entitled to certain compensations and benefits to motivate them to strive hard and
acquire organizational goals. The HR department makes the employees aware of the
various benefits offered to them like Medical insurance, working hour flexibility,
maternal/paternal leave, and education reimbursement for children. Rewards are
offered to the employees like incentives, hike in salary, appraisals, promotions which
generate a feeling in the employees that they are assets to the company and being
valued, they work with more efficiency and gain trust for the company.
Legal Compliance: The HR department should follow all the laws and regulations
relating to the rights of the employees for the benefit of the organization. The HR
department should have knowledge about the working conditions, overtime rules,
minimum wages, etc.
Performance management: Performance management helps the HR department of
an organization to interact with the employees and know their skills. This will help
them to select the employees for the appropriate department and enhance
productivity. Appraisals will help the HR department make a note whether the
employees are moving to the correct direction towards the goals of the company.
The company will also be able to understand if the employees require training on
certain fields.
Managerial Functions:
Effective Planning: The HR department has the vital role in setting the objectives of
the organization. The HR department plans firstly for the vacancies in the company,
takes decisions on recruitment sources, and set the job specification and
requirement.
Direction: The HR department oversees that all the employees are properly directed
to the organizational goals. The HR enforces in keeping the vision clear to the
employees and enhancing their performance
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IKEA organizes quarterly training program to educate the employees about
innovative technologies, so that it enhances the productivity of the organization. The
HR manager takes care of the policies being properly implemented in the company.
Quarterly training sessions are arranged by the HR manager of IKEA to increase the
competencies of the workers and improve their skills.
Workforce planning- The HR department of IKEA aims at hiring the right
candidates for achieving the goals of the organization and timely deliveries of the
products to the customer through proper distribution channel. The HR department
analyses the importance of recruiting staffs for the organizations as there is an
increasing demand of manpower.
Best Practice Approach: The model aims at reducing the number of absenteeism
in the company by maintaining healthy relationship with the employees. Sound and
effective communication develops between the employees and the departmental
heads including the HR department.
Resource Planning- It is the systematic planning of the approaches to achieve the
best outcome in productivity. The company aims at having the best employee for the
organization and ensure to give training, conduct seminars to improve the skills of
the employees.
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