HRM Practices in IKEA: A Case Study Review

This report examines the Human Resource Management (HRM) practices implemented by IKEA, a global furniture retailer. It explores the purpose and scope of HRM in resourcing talent and skills to meet business objectives, evaluates the effectiveness of key HRM elements, analyzes internal and external factors influencing HRM decision-making, and applies HRM practices to a real-world scenario. The report also discusses the impact of UK employment legislation on IKEA's HRM practices.

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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Figure 1: Steps in Human Resource Planning
Source: Created by Learner
Using examples from your chosen organisation, explain the strengths and
weaknesses of different approaches to recruitment and selection. [P2]
Recruitment can be conducted in companies in proactive or reactive attitude, either
immediately responding to the job vacancies available in the company and takes
time to create a pool of talents in the organization by recruiting educated and skilled
candidates. Approach to recruitment starts by having a proper job description,
consisting detailed information of the requirements of the jobs along with the offered
salaries, types of tasks to be performed (Armstrong and Taylor, 2014). By having job
specifications, the candidates can show their interest in different positions vacant in
the company. To hire suitable candidates, a comprehensive set of skills is framed
by the HR manager of the company regarding selecting the candidate. The positions
vacant in the company depend on the strategy developed to have a correct posting
medium of the vacancies (Sparrow et al., 2016). For example, posting vacancies in
outlets or advertisements in magazines can increase the promotion of the company
and the vacant positions.
However, there are two types of approaches of recruitment followed in every
organization, internal and external recruitment process (Gatewood et al., 2015).
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AnalysingOrganizationaObjectiveInventorypresentHumanResourcesForecastingdemandandsupplyofHumanResourcesEstimatingmanpowergapFinalHumanResourceActionPlanMonitoringControlandFeedback

Internal and External recruitment process has its own merits and demerits as
discussed below:
Internal Recruitment Process
Merits- Internal recruitment process is less time consuming as there is no
requirement of advertising the vacant positions in the company since the existing
employees are offered promotion. It is cost effective as there is no incurring cost of
conducting interviews, or promotions through newspaper or outlets. Since promotion
is given to the existing employees it is less time consuming as there is no
requirement to provide training on the behaviours of the company.
Demerits- However, the process debars the process of creating pool of talents as
fresh talents do not get the opportunity to explore their unused talents. On the other
way, innovation is not incorporated in the strategies of the companies and in the
creation of the products.
External Recruitment Process
Merits- External recruitment process contrarily hires candidates from outside the
organization through advertisements. New talents receive the opportunity to explore
their talents and gain competitive advantage by incorporating innovation in
technology and production. The HR department can hire candidates according to the
requirements of the company and according to the skills of the candidates.
Demerits- External recruitment process incurs cost spend on advertising about the
job vacancies through various mediums (Bratton and Gold, 2017). The process is
also time consuming as recruitment of staffs takes a long time going through
processes like interviews, screening, selection of candidates, induction, training of
the new employees. There are possibilities that the newly appointed staffs may lack
some of the behaviours and skills required by the company.
IKEA follows both internal and recruitment process effectively to retain the existing
employees and improve the productivity of the company. Through internal process
IKEA encourages the existing employees to work hard and attain the organizational
goals while external process helps the Company to incorporate fresh talents and
innovation in the Company, thereby gaining competitive advantage.
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LO2 Evaluate the effectiveness of the key elements of Human Resource
Management in an organisation
Explain how different HRM practices benefit the management and employees
of your chosen organisation [P3].
IKEA follows training and development session to garner the skills of the
employees and making them up to date with the trends in the markets. Training
imparts knowledge about many innovative technologies which fosters productivity,
thus improving the market share of the company. IKEA with the help of training nd
development enriches the skills of the employees, thereby increasing the productivity
of the organization overall. Training and development This HRM practice fosters
better labour-management relationship; the communication of the organization
improves to an enriched level (Marchington et al., 2016). Training improves the skills
thereby the employees can recommend necessary change in the management
program helping indirectly the productivity of the company. IKEA adapts training and
development to resolve conflicts in the organization. Employees of IKEA are
benefited by having self confident and self development. Employees gain the ability
to handle stress and conflicts in better manner. Motivation is integrated through
training to the employees of the IKEA. Training garners the knowledge and increases
the probability of taking future responsibilities.
By incorporating performance management as one of the HRM practices in IKEA,
the organization benefits as every employee gets an idea of their contribution
towards the success of the company. This HRM practice develops morale among all
employees (Ali et al., 2015). Performance management actually develops the
communication between the employees and the organization, thus the HR
department having a clear idea about the skills of the employee and promoting them
to the department according to their skills to increase the efficiency of production.
The employees of IKEA thriugh performance management understand their
performance on the year by receiving work progress or feedbacks from the HR
department. Degree of empowerment increases and thus the employees are able to
take decisions on their own. As the assessment helps them to identify their faults,
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less chances of repeating the mistakes occurs increasing productivity and
impression of the employees in the company.
Reward management theory incorporates a feeling in the employees that the
organization values their presence and efforts, thus increases their stamina to work
hard and strive to the organizational goal more efficiently. IKEA offers rewards to the
employees which benefits both the employees and the management. The theory
acts as motivation for the employees, and the feeling of being valued increases the
commitment of the employees towards the company. Rewards like appraisals make
the vision clear to the employees and directs them to the objectives in the correct
manner. Rewards like incentives and hike in salary improves the living standards of
the employees, thereby meeting their basic needs of foods and shelters. The
employees generates a feeling that they will be rewarded for their efforts and this
increases their work focus and work efficiency affecting the management overall.
Employee relation benefits the management of IKEA having policy implementation
without any obstacles of the employees. As the employees develop a healthy
relation with the HR, the employees becomes adaptable to changes quickly (Albrecht
et al., 2015). Employee relationship strengthens the bond between the management
and the employees. Employees having the apt knowledge of the products, if given
the freedom to share their views and ideas can bring about changes in the policies
and strategies of the company increasing the quality of the products.
Evaluate the effectiveness of different HRM practices in your chosen
organisation in terms of raising organisational profit and productivity [P4].
Reward management theory focuses on motivating the employees to work hard
and increase the productivity of the company. Employees having the feeling that they
are being valued increase their commitment to the Company (IKEA) and thus work
more efficiently. Rewards fill satisfaction in the employees that their efforts are being
recognised, this leads to an increase in the production and the market share,
benefiting the organization. The feeling that the HR department of IKEA has taken
steps to assure that the basic requirements of the employees are met creates a
sense of responsibility in them towards the company. Being motivated the
employees strive more hard to increase their labour and meet the demands of the
customers, increasing the reputation of the company globally.
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Performance management leads the way to offer training to the employees lacking
skills in certain areas. Training and development garners the skill of an employee in
a product, thus binging innovation in the product, meeting the customers demand
and rise in the market growth. Training opens new horizons for the employees
developing the skills and contributing in gaining profit to the Company. IKEA offers
monthly training to keep consistent reviews of the performance of the employees.
The HR manager of IKEA also keeps record of the requirement of the employees,
thus ensuring healthy employee relation. In general psychology, companies offers
rewards to the employees to increase productivity but IKEA offers to retain the
existing employees having experience.
IKEA develops various HRM practices t gain overall organization profit and increase
productivity. By bringing n innovation and efficiency of the employees, the Company
is able to meet the demands of the customers and enhance purchasing pattern of
the customers. IKEA works to garner skills in the employees through training,
keeping in line with the current trends of the markets.
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LO3 Analyse internal and external factors that affect Human Resource
Management decision-making, including employment legislation
Analyse the importance of employee relations in your chosen organisation in
respect to influencing HRM decision-making. [P5]
Employee relationship is the informal and formal relation between the management
and the employees (Tims et al., 2015). Motivating the employees proves to be
productive for the Company (IKEA) as they are the sole ones having core knowledge
of the products. Employees having the rights to express their views and opinions to
the company help to bring about changes in the strategies of the company. IKEA
works on developing employee relation by giving the employees opportunities to
express their ideas and make recommendations if necessary. The valuable
feedbacks of the employees help in the decision-making function of the HR
manager of IKEA.
The healthy relationship fosters the HR department of IKEA in making policy
implementation without facing any obstacles form the employees. The employees
being satisfied with the policies of the Company help to gain trust and support
between the management of IKEA and employees (Sanders and Yang, 2014). If the
existing employees are satisfied with the policies and rewards of the companies,
they offer referral recruitment in the Company to increase manpower. The existing
employees refer their peers to the Company, thus contributing in increasing the
productivity at larger scale.
Identify the key elements of employment legislation and the impact it has upon
HRM decision-making in your chosen organisation. [P6]
Employees are the sole one who brings about an increase in the productivity of the
organization thus having profits for the company. The UK government has taken
initiatives to safeguard the interest and rights of the employees (Lynskey, 2015). All
companies operating in the demographics of UK are bound to abide by the laws.
Some of the laws and regulations are discussed below:
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Sex Discrimination Act- This act enforces that none of the employees are treated
on the basis of their sex (MacKinnon, 2016). An organization should perform all its
tasks irrespective of gender and hires candidates of both gender, male and female.
In many organizations, female employees face harassment while getting promotion.
IKEA strictly adheres to the act and hires staffs irrespective of gender.
Equality Act, 2010- This act enforces that all employees in the organization are to
be treated equally and fairly, without following any kind of discrimination or being
biased (Waughray, 2014). Equal treatment increases the efficiency of the workers.
and ensures that all the employees are satisfied working in the company. Employees
are to be treated without any discrimination of sex, creed, colour, race, religion. IKEA
follows this act and treats all the employees equally and prefer bias treatment.
Trade Unions- The trade unions in an organization are formed by the voluntary
contribution of the employees. The trade unions oversees that the trade between the
management and the organization takes place smoothly and none of the employees
are breached (Deakin and Morris, 2012).
Data Protection Act- The act enforces that all the employees should protect the
data of the customers (No, 2017). While it is the responsibility of the company to
ensure that the employees data’s are too protected from being leaked to any third
party (Lynskey, 2015). IKEA appoints employers in the department to maintain the
data of the employees and any breach to it, the employees can claim compensation
or file complaints against the company.
IKEA oversees that all the employees are give minimum standard of wages and
have flexible working hours. This increases the satisfaction of the employees
towards the organization.
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LO4 Apply Human Resource Management practices in a work-related context.
Illustrate the application of HRM practices in a work-related context, using
specific examples from your chosen organisation [P7].
IKEA has decided to conduct an interview session to hire appropriate candidates for
the company to increase productivity. The company through advertisement will
promote about the vacant position in the company. IKEA has mentioned the job
specification and the job requirement.
Job specification:
Post to be hired: Human Resource Assistant
Company: IKEA
Contract: Permanent
Shift: Day shift
The responsibilities of the HR assistant are mentioned below:
 To arrange business purpose tour for the employees, staffs and the
departmental heads
 Conduct job analysis and oversee labour needs, managing wages and
offering rewards and compensations
 Orienting and training to new employees
 To oversee the human resource administration by performing clerical
assignments and tasks
Criteria for candidate selection
Required Qualification:
 Master Degree or equivalent qualification in human resource management Bachelors’ degree or diploma in business administration
Experience
 0-5 years of experience in a similar post in a recognized industry
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 Experience in maintaining important documents and using latest software to
secure and maintain employee and company database with safety and
security
 Must have excellent written and verbal communication
15

:
16
Angelina Curtin
105 Shakespeare Road, Preston CT 06315
Mobile no.- 8546335844
Email- [e-mail] / [e-mail]
------------------------------------------------------------------------------------------------------
Date of birth: 8/5/19**
Gender: Female
Marital Status: Married
==========================================================
=====
Education:
Master’s in Business administration in 2013
Diploma in Computer Application (1 year course)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
~~~~~
Experience:
Business executive at Asda from 12th July 2017 till now

17

18
Peter Henry
Email- [e-mail]
Contact number: 8886656451
Address: Greek Road, southern plot 1,
Personal details
I am fresher but has experience of managing team members in my college being the
controller of a section. I had to report to the professor about the various
requirements and performance of the students
Education
Master degree in Business Administration from Icon University (2014)
Diploma in Computer Science
Work experience: Fresher
Hobby: Interacting with people, speaking in different languages, and reading books

19
Hardy Emerson
72 Cliff Avenue, New London CT 06420
Email ID- [e-mail]
Contact No.- 8675844327
Personal details
Date of Birth- 05/03/19**
Summary
Meeting deadlines and taking up new challenges is my hobby and function in the
company I am working for now.
Educational qualification
MBA in 2010 from Harvard University
Diploma in Marketing in 2012
Degree of computer application (1and half years) in 2014
Work experiences:
1. Supervisor at DHL (2012-2014)
I had the job role to explain the employees about the various tasks assigned to them
and give them a clear idea of the benefits provided to them. I had to maintain the
record of recruiting staffs and train them as per the requirements of the company. I
developed communication skill by handling team members of 10 employees.
Salary- £ 19,000 /- (in hand)
2. Supervisor at Tesco (2015 to till now)
I was in charge of a group of 8 members and took managerial decisions in line with the
HR department.
Salary - £ 25,000/-

Analysis from the CVs of the candidates
On viewing the CVs of the candidates in details, the following points have been
jotted down:
Angelina Curtin
 Qualification is good
 Good communication skills
 Have a Human resource experience
 Score: 6/10
Peter Henry
 Fresh talent
 Desired qualification
 Good communication skills
 Score: 7/10
Hardy Emerson
 Good business skills
 Excellent communication skills
 Good job experience
 Score:8/10
It has been observed from the CVs of the applied candidates, that Hardy Emerson
has the eligible qualifications and the skill required by the company. Hardy
possesses latest software knowledge to secure the data of the customers and the
employees. Hardy also has the responsibility to assign task to the employees and
maintain performance of the employees.
Hardy will have to have a face to face interview with the HR department of IKEA and
understand the various tasks to be performed by him in future.
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Rationale:
The HR manager will post the job vacant in the
company and mention the various requirements of the
company in the advertisement of the company. The HR
manager will inform the candidates about the vacant
positions in newspaper, social media, and online portal.
The interested candidates will apply for the post and
send their resume to the company. After analysing the
CV, the company will send written document to the
selected candidates and ask them to attend a face to
face interview with the HR manager of IKEA.
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IKEA
Email-
[e-mail]
Contact no. –
08003234050
Offer letter
Dear Hardy Emerson,
This offer letters informs
you that you have
selected for the position
of Human Resource
Assistant in IKEA. The
offer letter has been
given to you with the
prior approval and
confirmation of the
management of IKEA.
This offer letter is valid
till 19th May 2018 to
receive the appointment
letter. We will be glad if
you accept the offer and
join the Company on
the stated date.
N.B. - For any types of
query contact – HR
Manager of KEA at
manager.
[e-mail]
Thanking you
Signature

Conclusion
This assignment briefs about the various Human Resource Management practices
incorporated in IKEA, thus developing the relation between the employee and the
management. This assignment opens up the wider contribution training and
development and other HRM practices have on the organization in profits and
productivity. IKEA incorporates latest technologies and software to gain competitive
advantage and these technologies are used to garner the skills of the employees
contributing in the production and growth of the market. IKEA being located in UK
needs to adapt unique strategies with the help of the employees and the HR
department. Reward management theory serves as motivation to the employees
and fulfilling their basic needs, creating a good impression about the company and
increasing their commitment to the Company.
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