Analysis of HRM Practices at IKEA: Recruitment, Relations, and Impact

This report provides a detailed analysis of Human Resource Management (HRM) practices at IKEA, focusing on workforce planning, recruitment, employee relations, and the impact of employment legislation. It begins with an overview of IKEA's business and then delves into the purpose and functions of HRM within the organization, including managerial, operative, and advisory roles. The report evaluates different approaches to recruitment and selection, highlighting their strengths and weaknesses. It further explores the methods used in HRM practices at IKEA and their benefits for both the employer and employees, emphasizing the role of HRM in raising profit and productivity. The importance of employee relations in influencing HRM decision-making and the key elements of employment legislation are also examined. The report concludes by illustrating the application of HRM practices in a work-related context, using specific examples from IKEA, and providing a rationale for the application of these practices.

Human resource and
management

CONTENTS
INTRODUCTION................................................................................................................................3
COMPANY OVERVIEW.....................................................................................................................4
LO 01................................................................................................................................................5
P1 PURPOSE AND FUNCTION OF HRM, APPLICABLE TO WORKFORCE PLANNING AND
RESOURCES IN IKEA.....................................................................................................................5
MANAGERIAL FUNCTIONS.......................................................................................................5
OPERATIVE FUNCTIONS...........................................................................................................5
ADVISORY FUNCTIONS.............................................................................................................6
M1 HR FUNCTIONS TO FULFIL BUSINESS OBJECTIVES................................................................9
P2 & M2 EXPLAIN AND EVALUATE STRENGTH AND WEAKNESSES OF DIFFERENT APPROACHES
TO RECRUITMENT AND SELECTION...........................................................................................10
RECRUITMENT METHODS......................................................................................................10
SELECTION METHOD..............................................................................................................11
P3 & M3 DIFFERENT METHODS USED IN HRM PRACTICES AND THEIR BENEFITS WITHIN IKEA
FOR BOTH THE EMPLOYER AND EMPLOYEE..............................................................................13
EMPLOYEES............................................................................................................................13
EMPLOYER.............................................................................................................................14
HRM PRACTICES IN RAISING PROFIT AND PRODUCTIVITY FOR IKEA....................................14
P4 EFFECTIVENESS OF DIFFERENT HRM PRACTICES IN TERMS OF RAISING ORGANISATIONAL
PROFIT AND PRODUCTIVITY......................................................................................................16
LO3.................................................................................................................................................17
P5 IMPORTANCE OF EMPLOYEE RELATIONS IN IKEA IN RESPECT TO INFLUENCING HRM
DECISION-MAKING.....................................................................................................................17
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P6 KEY ELEMENTS OF EMPLOYMENT LEGISLATION AND THE IMPACT IT HAS UPON HRM
DECISION-MAKING.....................................................................................................................19
M4 EVALUATE THE KEY ASPECTS OF EMPLOYEE RELATIONS AND EMPLOYMENT
LEGISLATIONS IN RESPECT TO INFLUENCING HRM DECISION-MAKING...................................21
LO4.................................................................................................................................................22
P7 ILLUSTRATE THE APPLICATION OF HRM PRACTICES IN A WORK-RELATED CONTEXT, USING
SPECIFIC EXAMPLES FROM YOUR CHOSEN ORGANISATION.....................................................22
M5 PROVIDE A RATIONALE FOR THE APPLICATION OF SPECIFIC HRM PRACTICES..................27
CONCLUSION.................................................................................................................................28
REFERENCES...................................................................................................................................29
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INTRODUCTION
Every organization requires labour to convert their combined effort into organizational profit.
These workforces are needed to be recruited trained and managed in order to ensure
sustainable growth of the business. Human Resource Management department plays the part
of analysing and recruiting potential candidates for the specified job. Apart from this, they also
maintain a relationship with the employees and ensure their performance level is above the
specified limit (Wilton, 2016.). In the given assignment, the purpose and scope of the HRM
department are discussed along with understanding the strength and weaknesses of different
recruitment and selection approaches. Later on, the effectiveness of the key elements of HRM
in an organization Is evaluated.
Further on, the external and internal factors that affect the HRM decision making, including
employment legislation is analysed in detail. Lastly, the application of HRM practices in a work-
related context is illustrated.
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COMPANY OVERVIEW
For the following assignment, the chosen organization is IKEA; it is a privately held retail
company founded in the year 1943 by Ingvar Kamprad. IKEA provides ready to assemble
furniture, home, and kitchen accessories and is the largest retailer since 2008. It operates in 29
countries and has over 355 stores. It shares a vision of creating a better everyday life for their
customers. Company's business idea is to offer the affordable wide range of well-designed
home appliances and furniture. The owner of the company is Stichting Ingka Foundation of
Netherlands and current CEO is Jesper Brodin. Its headquarters is based in Leiden, Netherlands
and has a workforce of 194,000 people worldwide. As per the organizational structure, the
funds from its parent organization can only be reinvested either in the IKEA group or can be
donated for charitable purposes (IKEA, 2018).
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LO 01
P1 PURPOSE AND FUNCTION OF HRM, APPLICABLE TO WORKFORCE
PLANNING AND RESOURCES IN IKEA
Organizations like IKEA requires large and diverse workforce in order to maintain sustainable
growth in the market. Effective employees are required for the jobs and present employees
have to be managed in order to maintain their loyalty towards the company. The HRM
department of the company handles these tasks and much more. Human Resource
Development department in any organization is responsible for performing several tasks like
recruitment, maintaining employee relationship, and maximizing the performance of the
employees by performing several tasks. The functions of the HRM department can be broadly
categorized into following parts:
MANAGERIAL FUNCTIONS
Figure 1: Managerial Functions
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Plan ni ng
Org an izing
Dire cti ng
Con tro ling

 It includes determining the total workforce required in the company to achieve
organizational goals. Research and analysis is conducted and the impact of employee's
behaviour on an organization is determined
 To accomplish a common goal, tasks are assigned to the employees and relationship is
established among them so that they can cooperatively contribute to the tasks
 Directing, Motivating and commanding employees to maximize their performance
 It includes checking the performance of the employees and matching it to the required
level if the performance is below the planned level than controlled measures are taken
(Yao, 2010).
OPERATIVE FUNCTIONS
 It includes recruiting potential candidates so that the administration can select
according to their requirement
 Another function is determining the skills, qualification and experience required to
perform any specific job
 Ensuring the performance of the employees are above the acceptable level of the
organization
 Conducting occasional training for new and existing employees, this helps them in
improving their performance and gets prepared for more responsibilities
 Salary, incentives bonuses and other benefits are given to the employees are
determined by the HRM department, they decide the salary and other wages required
to pay for the jobs
 It also maintains relations with the employee union and conducts personal research to
determine the employee point of view regarding promotions, wages and other facilities
that help the organization to understand the employee turnover, satisfaction etc.
 HRM department also manages employee related documents such as employment
history, working hours, application forms etc. (Bratton and Gold, 2017).
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ADVISORY FUNCTIONS
 Since the department deals with human resources the HR manager shares their
experience and views with the administration while forming policies, personnel
programs etc.
 They also share their views with the head of the departments regarding job design,
workforce planning, performance assessment etc.
Workforce planning and resourcing is a strategy used by the HRM department to determine the
gaps in the current labour force and take necessary actions to fulfil these gaps in future. The
HRM department for workforce planning uses strategic 5-steps cycle, which is described below:
STEP 1
It involves gathering relevant information about the organization such as organization’s goal,
strategic and performance plans and linking it with the workforce planning process.
STEP 2
It involves determining the status of present staff and analysing the potential department
where large turnover may occur, additionally understanding the reason behind the large
turnover is also determined in this step (Boselie, 2010).
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Figure 2: Workforce Planning
STEP 3
After the analysis, necessary strategies to fill the gaps are determined, which can involve,
conducting training, recruiting, outsourcing etc.
STEP 4
It includes implementing the determined strategies by coordinating with the finance
department for budget allotment and initiating the recruitment process
STEP 5
It involves monitoring and evaluating the changes by working with different departments to get
the feedback on the implemented strategies and alter it accordingly to run the process
smoothly (Marchington, et al., 2016)
The HR manager in IKEA is responsible for conducting all the functions described above, since
the company is world‘s largest furniture retail organization, this is possible only due to the
performance of its employee. The HR managers determine the requirement of the employees
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Set Strategic
Directions
Workforce
Analysis, Skill
Gap
Indentification
Action Plan
Development
Action Plan
Implementation
Monitor,
Evaluate, revise

and the department recruits and train the potential candidates. After the training feedback is
taken from, the respected department and flaws are nullified from the training process. Apart
from managing these processes, the manager also helps the administration to form company
policies. While recruiting, the department follows staffs planning and recruitment policies to
ensure that potential candidates have been selected through a recruitment process.
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M1 HR FUNCTIONS TO FULFIL BUSINESS OBJECTIVES
As per the IKEA group, the company has reached a higher level in the market due to the hard
work and dedication of their down to earth employees. The recruited candidates are selected
on the basis of IKEA’s requirement, which is down to earth and skilled . Training activities
conducted by the HR manager improve their skills and prepare the employees to handle greater
responsibilities (Kew and Stredwick, 2016). HRM department ensures that positive work
environment is maintained, as IKEA group believes that having satisfied employee results in
happy and satisfied customers. Another essential function played by the manager of the IKEA is
maintaining a relationship with the employees and employee unions (Kats, 2014).
HRM department based in every country is responsible for defending and supporting the IKEA
culture. Moreover, personal researchers conducted by the company’s HR manager has
introduced several policies regarding flexible holidays and used technological advancement like
video conferencing for the betterment of the employees (Keegan, et al., 2012). Additionally, 7
weeks mortality leave with full payment and discount coupons for the families of the
employees are some additional benefits offered by the HR manager of IKEA.
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P2 & M2 EXPLAIN AND EVALUATE STRENGTH AND WEAKNESSES OF
DIFFERENT APPROACHES TO RECRUITMENT AND SELECTION
In order to convert the vision of IKEA into reality, effective and dedicated employees are
required to perform different tasks that will ensure the growth of the organization. To do so,
dedicated employees have to be recruited and selected for working with the organization.
Failing in recruiting or selecting, a potential employee can raise difficulties in the performance
of the tasks. Recruitment is a process of gathering potential candidates based on the factors like
experience, skills, qualification etc. so that the management can select the required candidate
from the pool. The department ensures of selecting right people for the right job.
RECRUITMENT METHODS
Following are the recruitment methods used by the IKEA to reach potential candidates:
EXTERNAL RECRUITMENT
It involves selecting candidates from outside the organization, which provides an opportunity
for selecting diverse candidates for the jobs. This method is comparatively time consuming and
somewhat expensive. Following approaches can be used while externally recruiting the
candidates
 IKEA has a section on their website that allows users to apply for the jobs, the merit for
such method is that it is cost-effective, helps in speeding up the process, and provides
global reach. Whereas the demerit includes that it will filter out potential candidates
that are computer illiterate
 The company advertises in various national and local newspapers about the job
requirement, which helps in building the brand awareness and communicate a positive
message about IKEA's fortune, additionally, it attracts candidates with specific skills. On
the other hand, this method is a considerably slow process and is limited to the
candidates that read newspaper's job section
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