Strategic Impact of HRM Policies and Processes: IKEA Case Study

This report provides a detailed analysis of Human Resource Management (HRM) policies and processes within the IKEA company. It examines various aspects of HRM, including recruitment and selection, performance management, work health and safety policies, compensatory time, and email and internet policies. The report explores the effectiveness of these policies in delivering strategic impact and competitive benefits, emphasizing the importance of employee training, development, and work-life balance. It also discusses how HRM practices are affected by external factors, such as Brexit and economic conditions. Furthermore, the report delves into the financial aspects of HRM, including budgeting and workforce planning. The analysis highlights IKEA's approach to employee engagement, innovation, and sustainability through its HRM practices. The report underscores the significance of HRM policies in achieving organizational goals, improving employee performance, and adapting to changing business environments.

Human resource management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
1.HRM policies and processes and its effectiveness with regard to business deliver strategic
impact by distributing to competitive benefits.......................................................................1
2. Factors affect HRM policy and related legislation.............................................................5
CONCLUSION................................................................................................................................9
REFERENCE.................................................................................................................................10

INTRODUCTION
Human resource management is most essential element in business unit. It aids firms in
managing people well and raising productivity of the firm. HRM practices involve training,
recruiting, selecting, profits, smart works, and good talent, etc. HR team provides training and
development to employees. They focus on plans and strategies such as talent management,
succession planning, industrial and labour relations etc. there are establishment of policies and
strategies. HR Policies are very effective for growth of entity. IKEA company is a multinational
group. It designs and manufacture furniture or sell it into global market (Brewster, Chung and
Sparrow, 2016). The company make home accessories and kitchen appliances for home services.
There are many types of furniture and appliances designing for home ware. IKEA will expand to
their business in other countries. In report they will be explain HRM policies and processes.
TASK
1.HRM policies and processes and its effectiveness with regard to business deliver strategic
impact by distributing to competitive benefits
A human resource management policy will be related as behaviour and analysis how
people will interact with business. The company focus on ability of candidate doing a job for the
basically (Marchington and et.al.,2016). IKEA group uses large number of policies and processes
in the business. There are many sections, policies and processes for all feathers of the business
operation.
HR policies and processes
Human resource policies are developed and innovated by creating plans and decision. It
has been take action on every issues of the company. These process are developing policies and
procedures. There are various types of policies shown and following as, Such as performance
counselling and discipline policy, work health and safety policy, compensatory time, leave
policy, grievance policy, email and internet policy, bulling harassment and discrimination policy
and so on.
Performance counselling and discipline policy
It is necessary to maintain discipline at work placed by developing policies. It is very
basic step in making human resource management policies and processes. So HR manger and
leader will work towards the similar objectives and missions. In case of Human resource
functions are focused on company growth and their strategic partner (Brewster and et.al.,2016).
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IKEA group will make this policy for their high performance and workforce supports. They will
want to more than profits earn and their company success. The employees are responsible for
human resource matters because they have part of business team in a micro company. In IKEA
group HRM policies and processes are very diversification for these reasons like as segment
titled and magazine's advice. These policies are taken risk for decisions so that these are not
verified by a performance counselling and discipline plans. The company will make strategies
plans to taken advantages for their higher performance counselling and good dicsipline.
Work health and safety policy
The company should have use work health and safety policies and regular starting
processes given the business with maximum needed structure. There are included in pay
information, benefits, performance expectations, working hours and so on. It has been also
included medical insurance, job employment security, policies etc.These are many topics to
lives in a worker handbook. IKEA group in policies and procedures are provided a safe working
environment for their employees. They will be given good duty and commitment (legally and
morally bound) where workers feel like good and valuable distributors. IKEA group will want to
good performance and benefits from their employees (Reiche and et.al., 2016). They will make
good policies then apply on their workers.
Compensatory time
It refers to providing compensation according to the work done and leaves taken.
Compensation and advantages policies and processes are make good developing compensation
strategies. This strategy will create a plan with development functional points for effectively
compensation. The company should have provided compensation for their workers. IKEA group
will through compensation when an employee has been in injury situation and in loss. The
company will be given award, bonus, setting pay levels and developing advantages for their
employees.
Hiring incentives
The company should have good and best recruitment and selection for their business. IKEA
group want to smart person who is the best person in fit for the job. Recruitment and selection
policies are very special and better opportunity. The human resource management department
will conversation with other section of department leaders about employee needs and demands,
job position and interviews for a judgement authority (Albrecht and et.al.,2015). These policies
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and processes are better and best term on the compensation strategy. The company will create
overall strategies for their success, development and implementation. IKEA group will not
accept a person for their job to look their resume, because they cannot judge their employees. HR
manger will look their work of practical. And also will look skills, talents, knowledge in an
employee.
Email and internet policy
It refers to conducting various types of online websites. The company should have
provided these policies and procedure for their employees, so they want to good development in
their business. An employee needs to the email and internet policy for their improvement and
change of skills or personality. So these are through flexibility to meet changing situations.
Email and internet use for main purposes. The company should have provided these policies for
their staff. People who receive to software by download data from the internet.
These are followed to all websites(Armstrong and Taylor, 2014). Email and internet policies are
making decisions and take actions on every issues of the business. IKEA group manager has use
these policies for all staff members and company's issues resolve for their organization.
Human Resource Management is the building block and support of employees working in
any organization. The performance of employees depends upon the actions, strategies, plans and
projections adopted by HRM staff/team. HRM practices and policies are the most influential
aspect for the performance of any employee and have been upgraded/ changed according to the
changing time and culture of organizations.
Key HRM practices that every organization tends to adopt are-
Recruitment & SelectionDevelopment & Training
Performance Management
Work Life Balance
Compensation
Different organizations follow different HRM practices depends on certain relatable
conditions of the workplace. HRM PROCESSIKEA, is one of the renowned furniture designing
Swedish group that has a flexible yet generous set of HRM process like, recruitment and
selection which is the fundamental responsibility of HRM to select the most suitable candidate
for the organization and to attract them with various practices and policies of the organization.
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This process has predefined steps to follow- Recruitment Planning, Strategy Development,
Searching, Screening, Evaluation and Control.
IKEA follows the standard yet cost effective process by hiring those candidates who are
already interested in the products and are familiar with the company. It has adopted a creative
and customer centric approach of recruitment. The company started posting the career options
along with the description of their products, this process enhanced the engagement of customers
and thus increasing the productivity and financial returns. This method of E- recruitment is time
& cost saving than that of the traditional concepts of the recruitment which incorporates local
advertisements, hiring marketing agencies, etc. Cost effective recruitments process and
innovative approach of hiring applicants from different regions helps the firm in managing
sustainability and innovation in strategic effect of IKEA. This is the approach which aid the
business in attaining competitive advantage.
Further, HRM process comprise development and training which involves the conduction
of various training programs required to improve the work efficiency of the employees. The
organization may adopt any method of training programs either On Job training method or Off
Job training method. IKEA has adopted a personal training and development policy for its
employees with the scope of learning the core and advanced knowledge regarding the
organization itself. The training program is conducted by IKEA group that delivers proper
training, monitoring and evaluation with the help of all possible training aids. This purpose of
organising training and development for employee on regular basis is to make workers aware
about different uncertainties which assist the firm in attaining competitive advantage.
IKEA provides training to the employees at a global level in the field of logistics,
packaging, innovations and many more which increases the employees' productivity and
consumer’s loyalty to a greater extent. The employees are well trained to cope the problems
arises due the countries' legal laws and other technological standards. This development and
training strategies provide employees a different level of comfort while tackling the issues. On
the other hand, there is performance management which is another necessary aspect of HRM
practice done includes performance appraisal criteria and other evaluation process to improve the
credibility of employees' work. At IKEA, it is being done by setting specific values that include
various aspects of team management system. The top executives also have to be fully involved
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into the activities and assessments. It adopts a proper way of implementing the 360-degree
evaluation process.
HR policies have helped in improving skills of employees by providing them training. By
this way people are now able to perform their work effectively. For example staff turnover of
IKEA was increasing in the year 2008 that has affected sales of business to great extent.
Company has made changes in its HRM practices in order to deal with these problems.
Enterprise started giving incentives ,necessary holidays to workers so that they can perform well
an stay in business for longer duration.
Unlike the HRM practices that were followed in the past, IKEA has adopted modern and
advanced system of performance management for the employees. IKEA has emphasised on
minute details to reduce the cost of the business and to improve the productivity of the
employees in the terms of marketing as well as in terms of performance. Depending upon all the
HRM practices adopted by the team, the company has set a milestone and still continues to grow
with the same pace.
The
2. Factors affect HRM policy and related legislation
The HRM policies are framed to provide basic guideline for every organisation for
achieving their specific goals. The entity manages HRM policies, to control over the internal
activities within the organisation by scheduling & training their staff for better output. Brexit has
affected employment law to great extent. After this case EU government has made changes in
employment policies. Now people are getting minimum holiday entitlement. Earlier to that
employees were not allowed to take much leaves but cha after Brexit employer were bound to
give required holidays to their staff. This has raised productivity of employees.
Due to Brexit, economic condition of UK has been affected badly. Due to which
companies have reduced salaries of their staff. This has created situation to make changes in
salary packages. Now companies are allowed to pay wages to staff as per their skills. The IKEA
company is formulating fundamental HR policy & practices which is also affected by the various
funds that HR allocate to performing their functions (Brexit – employment law and HR
implications, 2018). The Human resource budget includes salary data, Recruitment budget, new
benefits programs, payroll costs, training & development of new & existing employee, complex
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forecasting on number of employees, workforce engagement, Incentive compensation, HR
database, Intranet Design and maintenance and employee wellness planning (Storey, 2014)
The Company is evaluating their HR budgets with the uses of previous data, performance
result, financial information. Company needs to estimate essential documents by determining HR
activities to forecasting financial Strength with available budget, because it prevents over hiring
& under staffing which helps to understand their appropriate needs. The company fairly enforce
their HR policy to consider how it is realistic with day to day planning.
Tesco’s sales was declining continuously that has affected productivity and brand image
of the firm to great extent. After that HR policies of company have been changed and now
company was giving incentives to its employees so that they stay in company for longer
duration. Same as The IKEA company has a wider corporate structure, with the strength of
208,000 employees till 2018, It owns and operates 415 stores in 49 countries. Basically there are
two types of organisational structure has to be formed- tall & flat due to large scale. Here tall or
Pyramid type of organisation structure are labour oriented, the authority is versed at the top level
management & the pyramid shows the hierarchy of positions, whereas flat structures indicating
decentralisation of authority which is suitable for technology oriented work. The company
known for its modernist design for various types of appliance & furniture. Due to technology
based & endowed with capital & highly educated employees must be require. With the modern
aspects of HRM policy, the job of HR managers is very challenging & significant, because the
number of employees at the operating level is relatively few. Thus, the company should be
determining their optimal staffing needs to maximizing the effectiveness of human resources
functions by creating organisational chart, ranking each position & clearly define who is
reporting to whom. The company needs to framing job description for each employee to consider
over every task they should be perform as assigned. In addition, of HRM policies recently new
HR tactics has to be follow which providing free flow of upward communication & enhancing
the status of employee. It is a Humble beginning by the IKEA company to improve their
structure to taking consideration of delay in response from their subordinates by direct contact.
The IKEA company is at growing stage so it should be considering to create the most
positive workplace with additional administrative operations which fulfilled by their current
human capital, instead of hiring additional employees through contractors. The company must be
focusing on staff training to enhance their skills and knowledge towards their job roles due to
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technology up gradation & also having competitors those who are having strategic HR policies
with new amendments. Many companies trying to improve their employee’s performance by
providing “on the job training & off the job training” which consist- seminars, workshops,
apprenticeship, conferencing, and some other technical training as per the job profile. It helps to
maximise productivity with little efforts, which develop individual skills with the purpose of
achieving organisational objectives.
External Factors that affect HRM Policy
The external environment changes anytime which is directly impacting on the HR policy
& practices through various external forces. Thus, flexibility must be essential for the IKEA
company to adapting necessary changes as required & cope up with their certain circumstances.
With the forces of external environment, Human Resource policies can be influencing through
economic, social, legal, technological, political factors & stalk holders.
Government regulations
There are certain guideline & code of conduct is to be framed by the UK government or
labour law, which should be constantly under pressure to stay within such law. Hence, these
types of regulations influence every process of HR policy & practices at the IKEA company.
(Albrecht and et.al.,2015) With such government aspects the company is to be focusing on
methods of hiring, training, compensation, termination, lay-off, retrenchment & other medical
benefits are to be providing for their employees as per the labour Law. The law stats protection
of employees from exploitation by every organisation and also consider over their working
hours. The legal system affects human resource policy to implement changes with certain laws.
Thus, IKEA company should be update with employment law to avoid any interruption while
formalising their HR Policies.
Economic conditions
It is one of the biggest external factor for IKEA company. It plays a critical role for the
organisation to impact on HR policy & procedure. The company is totally based upon economic
condition & its stability which impacts on growth of the business. With the proper study of
market competitors, the company concern over human resource planning on the availability of
training & equipment, salary structure & minimum utilisation of human capital. Economic
factors help to analysing how many employees are they need & they can pay. It is very important
to justify an economic growth & downturn of the company.
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Technological Advancement
Technology plays significant role for the IKEA company by revolutionizing the way they
do business to be focus on internal cost cutting through various technology. It is considered an
external influence because, HR department introduce new technique & innovation where 2-3
people can be replacing with the latest equipment’s that could be done by a single person. New
technology brings new skill's requirement thus, company should always be aware of proficiency
and identify their training needs. They must be update their HR software with the latest version.
The human resource management federal laws effect on local level and micro business so
depends on their size. Additionally, it has been effects on labour relation and own employment
law regulations (Purce, 2014). These are checks employee criminal records. There are many
types of laws legislations such as anti-discrimination, wage and hour, medical and disability and
leave provisions etc.
There are several laws that impact of HRM decision making, these are explained as
below:
Anti-discrimination
The anti-discrimination act is established in 1964, its civil rights on basis of sex, religion,
colour, race and local origin etc. The company use these regulations on their employees
according to laws and legislation (Brewster, 2016). The employee who have had more than 15
workers on the amount of money for minimum 4 months during the present calendar year. IKEA
follows this law carefully and ensure that no discrimination takes place in business. Thus, it
looks at the performance of person for promoting them in business rather than looking at race,
age, region etc.
Wages and hour
Tesco’s high staff turnover case have created necessity to make changes in HRM policy.
The labour acts have been make federal minimum amount of wages for an employee. The
company should have given verify amount of accuracy for their workers. There are included in
child labour regulation and overtime work. IKEA group has been need all covered workers to be
paid extra work of time in a work week.
Medical and disability
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Many federal laws act makes how the HR manger must treat a worker with a medical situation
and disability. This act is also needs business to change the premises to accept customers
entering place to the facility (Storey, 2014). The HR manger should have medical reports from
an employee privacy relating medical information when employee has been health issues and
problems. IKEA group manager will provide health insurance for their employees.
Leave provisions
Brexit has created situation to make changes in employment law. Leave provision has been
changed after that and now it has become neccesary for companies to give necessary leaves to
employees. The federal laws according FMLA given for employees. The company will be given
to family and medical leave act for their staffs. The employees could be taken 12 plan leaves, 6
causal leaves, 2 sick leaves in a 12 months of period. But according to these situations such as,
serious health condition of the staff, pregnancy (meeting with new baby and its related to
progressive military service) and so on (Purce, 2014).
CONCLUSION
It has been concluded from the above report that IKEA groups furniture company has
worked on the human resource management policies and procedures of the HRM department
functions. The assignment further focus on Human resource management practices impact on
advantages. It has various types of HRM practices and policies. The report lays its emphasis on
the internal and external environment factors effects on the all departments in the company.
Finally, the report ends up with HRM practices affected with any laws and legislations and their
relevant issues.
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REFERENCE
Books and journals
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and competitive advantage: An integrated approach. Journal of Organizational
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Armstrong, M. and Taylor, S., 2014.Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Armstrong, M. and Taylor, S., 2014.Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Bailey, C. and et.al., 2018.Strategic human resource management. Oxford University Press.
Bratton, J. and Gold, J., 2017.Human resource management: theory and practice. Palgrave.
Brewster, C. and et.al., 2016.New challenges for European resource management. Springer.
Brewster, C. and et.al., 2016.International human resource management. Kogan Page
Publishers.
Brewster, C., Chung, C. and Sparrow, P., 2016.Globalizing human resource management.
Routledge.
Marchington, M. and et.al., 2016.Human resource management at work. Kogan Page Publishers.
Purce, J., 2014. The impact of corporate strategy on human resource management. New
Perspectives on Human Resource Management (Routledge Revivals).67.
Reiche, B.S. and et.al., 2016.Readings and cases in international human resource management.
Taylor & Francis.
Storey, J., 2014.New Perspectives on Human Resource Management (Routledge Revivals).
Routledge.
Online
Brexit – employment law and HR implications. 2018. [Online]. Available through <
https://www.taylorwessing.com/download/article-brexit-employment-law.html>
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