Report on Employee Relations: Case Study of IKEA's Practices

This report provides an in-depth analysis of employee relations at IKEA, focusing on the practices and methods used to manage relationships among employees. The report begins with an introduction to employee relations and its importance within Human Resource Management, followed by an overview of IKEA's approach to employee relations. The main body of the report explores the rights, duties, and obligations of both employees and employers, referencing relevant employment laws such as the Employment Rights Act 1996, National Minimum Wage Act 1998, Maternity and Parental Leave Regulations 1999, Data Protection Act 2010, and Working Time Regulations 1998. The report also includes a stakeholder analysis, evaluating the impact of both positive and negative employee relations on the organization. It offers advice related to the rights, duties, and obligations of employment, ensuring a healthy and safe working environment. The report concludes by evaluating the positive and negative impacts of employee relations on overall sales and profitability. The report emphasizes the importance of employee retention, overall development, communication, culture, rewards and recognition, and vision and values in fostering positive employee relationships. The report is a comprehensive exploration of employee relations in a real-world business context.

EMPLOYEE RELATIONS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
L01...................................................................................................................................................3
P1 Employee Relation and its importance...................................................................................3
P2 Fundamentals of employment law..........................................................................................5
LO 2.................................................................................................................................................6
P3 Rights, duties and obligations of the employees and employers............................................6
P4 Appropriate advice relating to the rights, duties and obligations of the employment............7
LO 3.................................................................................................................................................8
P5 Conduct and complete a stakeholder analysis........................................................................8
LO 4...............................................................................................................................................10
P6 Impact of both positive and negative....................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Employee Relationship Management plays a major role in the field of Human Resource
Management which deals in the practices and methods to regulate the relations among
employees (Otaye-Ebede, 2019). The main focus of this is to establish employee relations which
is more productive. Ikea, headquartered in Dutch, is a multinational group that deals in designing
and selling of readymade furniture, appliances of kitchen and accessories of home etc.
The report will describe the relations of employee within the organization. It will also give
certain suggestions related to the rights, roles and regulations of the relations of employment.
The research will also analyse some stakeholders who favours the employment relations which
are positive. The report will be concluded by evaluating the positive and negative impacts of the
relationships of employee to increase the overall sales thereby increasing the profit margin of the
company.
MAIN BODY
L01
P1 Employee Relation and its importance
Employee Relation: - Employee relation refer to the company’s effort to maintain & manage the
relationship between its employers and its employee. Organizations which have a good employee
relation provide fair and consistent treatment to all the employees similar so that it can motivate
them and committed them to work better and loyal towards the company and IKEA follow the
same when it’s about the employee relation and they provide all the guidelines so that employee
can rely on the company and they can perform better for the company.
Importance of Employee relation: -
Retention: -
Retention is one of the most important part of employee relation as good relation with the
company increase the retention of the employee in the company. IKEA keep motivate their
management to increase the relation with the employee which help in the retention of the
employees and helps in development of the company.
Overall development: -
Employee relation helps in the overall development of the company and IKEA focus in
the importance of the employee’s relation as there are the front line people working for the
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company and are the most important part of the organization and they need to be considered at
first priority and the relation need to be the best (Jennings,2017).
Communication: -
Working in an industry where the communication is of top level and the employees have all
rights to talk about their issues in the company and IKEA provide all facility to their employees
to communicate and a good manager always provide good communication between their
employers and employee to manage the company better and IKEA promote communication to
improve the performance and trust of the employee towards the company. Communication helps
building in the employee relation which can benefit the company in many ways and good
relation with the employee increase the communication within the company (Servais,2020).
Culture: -
Culture is an emotional aspect of employee and it need to be filled as working in a
company with the positive culture and healthy atmosphere. IKEA provide the best of its culture
to their employee as good culture helps in the better performance and keep employee happy with
the company and they rely on company and make good retentions of employees. Culture and
employee relation are connected as employee relation both are important to the the development
in the company performance which include their personal performance as well.
Rewards and recognition: -
Rewards and recognition are very important part of corporate and employees personal
view as it motivates the employee to work hard. IKEA do regular check-up in the management
and the workings and provide the best of rewards to their employees for their excellent work
towards the company and it also motivate others to work more as rewards and recognition helps
in employees needs and it motivate them. Employees relation include the recognition among the
company and for that IKEA maintain a programme and team to promote the best employees and
train others also to be the best.
Vision and values: -
The relation of employee is totally dependent of their vision towards their goals and
which is important to understand by the company. IKEA working in so many departments of
industry which gave a positive vision and values to their employee which also develop the
relation and helps in the company results. Vision are connected to the employee relation as it
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motivates the employee to get more of the working and the relation helps the employee to
improve the performance.
P2 Fundamentals of employment law
Employment Right Act 1996: -
Employment rights act is started in 1996 and it is one of the most important labour rights
law and IKEA follow the guideline f this act to fulfil all the government policies and employees’
laws. This law explains the contract of employment, unfair means and dismissal from the
company, leaves to the employees etc. Employee relation are connected to the company with
their acts of employment and working and it is important for the company to look for the best of
working (Collins,2019).
National Minimum Wage Act 1998: -
This act is to maintain the minimum wage rates in the country and company needs to full
fill this act and work accordingly, the amount will change throughout the time and the updates
need to considered by the law and the IKEA give the employment and the wages to their
employees according to the working and the act to maintain the relation with their employees.
Maternity and parental 1999: -
One of the most important law which need to be consider as an employee working for the
company and giving the best of the hard work, IKEA provide the maternity leave and bonus
rewards to the employees which also shows their gesture towards their employees and the
relation of the company and employees. IKEA understand the importance of this law and provide
the best service in this.
Data protection Act 2010: -
Data protection act helps the company to secure their data and no employee have right to
leak the important data of the company. IKEA keep focus on all the employees and maintain all
the workforce to work best and secure the company official data as it can damage the company if
it gets in the wrong hand (Kossivi,2016).
Working time Regulation 1998: -
IKEA works according to the working act of the country and its important to follow the
act of timing for the employees, it need to be considered for health and safety of the employee
and improves in performance. Working time are important to the employee relation to the
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company and IKEA works to maintain the working period equal to the employees need and
make them according to the safety and health of employee.
LO 2
P3 Rights, duties and obligations of the employees and employers
Rights are the legal and ethical principles of the freedom of an individual. It refers to the
rules that are allowed for the individual. Employers and employees have the rights and
responsibilities for each other. They have some rights for each other regarding the health and
safety in IKEA. Duties refers to the restriction in which an individual is bounded morally for the
work to be perform in an organisation. Duties of the employer and employees is to provide and
maintain the healthy environment in the IKEA. The machineries and the plants should be safe
and in good working conditions. Obligations are basically the law and rules which are to be
followed in the organisation as it is already promised to do. Employers and employees of IKEA
have some laws and rules for the safety, health and hygiene, which is mandatory to be followed
in an organisation.
SAFE ENVIRONMENT:
Employer: the main role of the employer is to provide a healthy and safe environment to all the
employees of the company (Otaye-Ebede, 2019). The employer needs to install the safe
machineries for the employees, as the employees are most important part of the organisation.
There are a lot of rights and duties which have to be given to the employees so that the
organization can achieve their objectives and goals.
Employees: the employees must make sure that they work in the safe environment and also make
safe for others too. The employees will not be able to give in their best if they are not given their
rights and duties according to their capabilities so that there is going to be a good standard of the
organization in the market.
ARRANGEMENTS:
An organisation should make sure about the safe arrangements for making use of harmful
substances, chemicals and dangerous products. The organisation has the specific regulations for
the using and storing such substances.
INEQUALITIES:
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There should be inequalities in the workplace, which results in the healthy environment.
Employers should make sure that the workplace should free from the harassment, abuse and
discrimination. It is the major issues and also the right of every employee. Employees feel
demotivated when their rights and equality is not present in the company which can be a great
threat for the company to be able to operate effectively in the market.
DRESSING:
Way of dressing should be different according to the tradition of the employees. the dress
code hasn’t ruled in the workplace. There is right for the employees to dress accordingly
(Lagutina,2016).
PAYMENTS:
Every employees and employers has the fixed payments which is decided before the job.
It is the right of the employees to be paid fairly and correctly. Any discrimination cannot take
place in the payments of the workers.
POLICIES AT WORKLACE:
There are some policies in the workplace which is to be strictly followed by the
employees. it is the fair practices to all the employees. In the workplace, privacy is the most
important part which is to be maintained by the employees. The contract which all the employees
sign have the policies of the organization stated in them so that there is a clarity between the
employees and the organization which is good for building up a relationship.
THE HR DEPARTMENT
The HR department in the organisations helps in resolving the disputes amongst the
employees and also educate them about the rights and responsibilities.
FLEXIBLE HOURS:
It is the right of the employees to choose the flexible working hours. The employees have
the freedom to choose their appropriate shifts. The employees have freedom to choose part time
or work from home. Employees have to find a balance between the professional and personal
lifestyle only then they will be able to operate effectively in the market.
EQUAL AND RIGHT WORK:
When discoursing about the rights and responsibility, the employees should provide an
equal and fair work environment. The employers should not be partial and unfair during the
working of the employees.
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PREVENTION OF HARRASSMENT:
In any organisation it is important to prevent the inequality and harassment. The
employees should be fairly treated by the employers. The employers must be unfair. There must
be no place for the discrimination of the gender, religion, race etc.
Everyone in the organisation has different duties and they are to be followed by each. The
duties are, the employers provide a reasonable amount of the work to the employees. it is the
duty of employees and employers to provide the healthy environment in the workplace. The duty
of the employers is to motivate the employees for the betterment of work (Susilowati and
et.al.,2018).
P4 Appropriate advice relating to the rights, duties and obligations of the employment
There are rights, obligations and duties which the employees have towards an
organization so that there is a strong functioning and the employees will be able to benefit from
it. First is the contract which has to be followed by employees otherwise the organization can
legally sue them. This is done so that the employees do not lie and give their best to the
organizations longer functioning. The contract makes the employees give their best so that the
organization can have better functioning in the market and IKEA provides the employees with
healthy and safe environment to work within. The team work in IKEA is very good but a
negative relationship can impact on the productivity and quality of the products and services.
The unemployment rate in the country is high which a great advantage is for the company since
they are getting the workforce for less but the company is paying the right amount to the
employees so that the turnover of the employees is not high. The human resource of the company
is very good which is why the company is being able to maintain the employees (Narayanan and
et.al., 2017). There is no kind of discrimination which is taking place in the organization
regarding sex, culture, religion, etc. which is a very good factor for the company’s working
environment. There has to be a good respect and value for everyone’s culture, religion, sex, etc
in the company which is being maintained well therefore the organization is having a smooth
functioning.
The employees of IKEA are also involved in the decision making of the organization so
that there is a decision which is taken for the best of the company overall. The organization has a
competitive advantage which is a very good factor for a long run in the market of the
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organization. The employees are given their rights by the management as well to speak for the
right of the company so that the changes can come in IKEA effectively and efficiently without
disturbing the operations and productivity. The payment of the employees is according to the
efforts they are putting in and there is training which is provided to them so that they can match
the expectation of the organization (Babenko, 2018). There are loyal customers which come
because of the well maintain standard of the organization. There are recommendations which are
taken by the management of the employees and customers so that the portfolio of the company
can be improved. The trends in market and needs of customers are changing and shifting which
has to be got in the organization effectively which is going to make the profitability of the
organization get improved for a better and smoother functioning in the competitive market.
LO 3
P5 Conduct and complete a stakeholder analysis
The stakeholders have a great influence in the organization which is why they have to be
acknowledged and power has to be well distributed. There has to be a good transparency which
the management has to provide the stakeholders of the organization. IKEA is having a lot of
experience in the market which is why the company has to make sure that they are having a
strong base for themselves (Chen, Chen and Yang, 2019). Customer and employees play a very
essential role and responsibility towards the organization.
Steps which have to be followed for analyzing the stakeholders are as follows.
 Identification of the stakeholders of the company
The products of the organization do not have to just be appreciated by the customers but also
the stakeholders of IKEA so that they can have a better functioning. It is very important for the
company to be able to gain the trust and confidence in which the company is dealing.
 Prioritize the stakeholders
There is a good distribution of power of all individual stakeholders in the company while the
decisions are being made so that the satisfaction level is higher and the operations and
productivity of the company does not get affected (Pesik, Pangemanan and Tumewu, 2019).
Stakeholders Influence Interest in
the company
Goals Objectives in the
organization
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Owners 9 High The decisions are made
by them so that they can
handle and satisfy the
customers and the
employees who are
working in the
organization.
There are a lot of
changes which have to
be considered and
decisions have to be
made on that so that the
company can have high
profitability. The
demands and wants of
the customers have t o
be met so that the
company can have
better portfolio and
operations for the
future.
Employees 6 Medium The company gets profits
because of the work the
employees put in the
products and services
which are received by the
customers which have to
be maintained.
There are a lot of
advantages which are
given to the employees
of the company so that
they put in the best for
the end products to be
good and match the
standards of the
establishment for a
longer run.
Customers 10 High The customers feedbacks
really make a lot of
difference to the
organization so that the
products can be
improved and the quality
if also better.
The customers have the
freedom to select their
own products and
services in the company
(Kuznetsova and
Kuznetsov, 2018). The
products are designed
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according to the
customer’s needs and
demands which is why
the company is having
high profitability in the
market and competitive
advantage as well.
Investors 7 Medium To increase the
satisfaction level of the
customers which are
loyal to the organization
so that there is going to
be a better functioning.
To make the changes in
the company take place
and the organization
must have good funds.
There has to be a good
investment in the
company which is
required so that the
organization can have
better reputations and
the end products are
going to improve for
the customers.
 Perspectives of stakeholder’s understanding by the company
There has to be clarity of the goals and objectives in the organization so that standards and
expectations of the organization can be met. The changes which are coming in the market will be
able to be maintained and got in effectively for a stronger portfolio.
 Incorporate stakeholder perspective into design
For the designing purpose the stakeholders of the organization have to be involved so that the
right decisions can be taken out. Information is being shared by the stakeholders of IKEA all the
time so that the confidence level of them can increase and the company is having one direction to
function within.
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LO 4
P6 Impact of both positive and negative
 Employees relationship with Suppliers
Employees have a direct connection with the suppliers of the organization which will have to
be well maintained so that the organization can achieve and succeed in their objectives. The
quality of products and services have to be well maintained so that the company can get in loyal
customers and without having a strong supplier and right quality of supplies in the company the
organization will not be able to function effectively. IKEA has been able to satisfy the customers
because of their right decisions for the products and services and complains of the customers are
worked upon by the business on time so that the company can have better functioning and the
organization will be able to get higher market share. The profit margins of the organization has
to be maintained so that the organization can invest in further decisions and expansion and for
that there has to be a good feedback from the customers which is being worked upon. There are
right supplies and loyal one’s as well which the company has gathered for themselves over the
years so that the company will be able to operate effectively in the market. The customers are
going to get the best of services and products which is going to make the company have a good
reputation.
 Employees relationship with Investors
There are a lot of mistakes which IKEA has made in the past from which they learned a lot
from this factor which is why the company has been able to function effectively in this
competitive market. There are a lot of investments which the company has been doing in the
organization so that the organization can have better productivity and satisfaction of the
employees (Tebetso, 2020). There are a lot of conflicts which rise in an organization which have
to be solved on time so that the company can achieve their objectives and goals faster.
Innovation and invention can come in an organization effectively if there are right decisions
which are being taken in the organization which IKEA is aware of so that the company can have
better reputation, brand image and portfolio in the market. Employees do not take the changes
easily which will have to be controlled by the organization so that the standards of the company
are matched.
 Employees relationship with Customers
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The employees have to know the needs, wants and expectations of the customers so that they
can match that factor so that the company will be able to have a strong base for themselves.
There are a lot of change and rights which have to be given to the customers and employees of
the company but employees have to make sure that the rights of customers is being given so that
the organization can have higher market share which can be rewarded the employees from the
management as well. The feedbacks are taken by the customers of the organization so that the
products and services of the company can be improved upon according to them so that there is a
loyalty of customer towards IKEA. Owners have to make sure that the employees are being able
to maintain the relationship with the customers and the right feedbacks are reaching them so that
they can make the further decisions accordingly.
CONCLUSION
The report was prepared by taking the well-known company Ikea which deals in
Furniture’s designing and selling. It began by describing the relations of employees followed by
describing the principles in the context of organizations. The report also gave certain advices
considering the rights and roles of the relations of employment. The study of the report was
further explained by considering the stakeholders who are in favour of the positive employment
relationships. The report finally described the vast impacts of employee relations both positive
and negative.
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