HRM Report: IKEA's Practices on Recruitment, Benefits, and Legislation

This report provides a comprehensive analysis of IKEA's Human Resource Management (HRM) practices. It begins with an introduction to HRM, defining its purpose and functions within an organization, specifically focusing on IKEA's operations. The report then delves into the core functions of HRM, including recruitment and selection, exploring internal and external approaches and their respective strengths and weaknesses. Furthermore, it examines the benefits of various HRM practices for both employers and employees, such as training and development, flexible working, and performance management. The report also addresses the effectiveness of these practices in terms of organizational profit and productivity. It highlights the importance of employee relations and its influence on HRM decision-making. Finally, the report concludes by outlining the key elements of employment legislation and its impact on HRM decisions, illustrated with relevant examples within IKEA's work-related context.

HUMAN RESOURCE
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
P1- purpose and functions of HRM at workplace.......................................................................1
P2- Strength & weaknesses of recruitment & selection approaches...........................................2
LO3..................................................................................................................................................5
P3. Benefits of HRM practices to employer and employees.......................................................5
P4. Effectiveness of HRM practices............................................................................................7
LO3..................................................................................................................................................9
P6- Key elements of employment legislation and impact on HR decision making....................9
LO4................................................................................................................................................10
P7.HRM practices in work related context................................................................................10
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Human Resource Management (HRM) is the term used to describe formal systems devised
for the management of people within an organisation. The purpose of HRM is to maximize the
productivity of an organisation by optimizing the effectiveness of its employees.
Present study is based on the company IKEA, it was founded in the year 1943 by Ingvar
kamprad in Sweden. IKEA is a swedish-founded multinational group that designs and sells ready
to assemble furniture, kitchen appliances and home accessories, among the other useful goods.
Report will include purpose and functions of HRM applicable to work force with the strength
and weakness of different approaches of recruitment and selection. Further report will include
the benefits of different HRM practices for both the employer and employee. Effectiveness
different HRM practices in terms of raising organisational profit and productivity. It will also
include the importance of employee relations in respect to influencing HRM decision-making.
Final report ends with the key elements of employment legislation and the impact it has upon
HRM decision making. Illustrating the HRM practices in a work related context, using specific
examples.
LO1
P1- purpose and functions of HRM at workplace
Training & Development:
It is the main function of HRM. It helps an organization for improving the knowledge and
skills of individual and group of people. Training & Development are two different words,
training fulfil the short term goal of organization, it has some special goals and objectives of
enhancing the capacity, capability, performance etc. whereas, development is useful for
achieving the long term goals of firm and employees. IKEA provide the training and
development facilities to their employees for better and high quality production of furniture
(Purpose of HRM, 2016). The company provide training to their employees at the time of job
enlargement, job enrichment and also the at time of changing job location and scope. That
program may also develop the knowledge and skills of the person, also improve their work
efficiency.
Purpose:
Primary purpose behind the training and development program of firm is improving the
knowledge and skills of employees for the better performance of their role. It may also enhance
1

employee’s engagement and morale. T&D improve retention of employees and support them for
development and growth.
Recruitment & Selection:
It is the main function of HRM, In simple words recruitment is the process of searching
new candidate and finding and attracting able candidate for job and selection means, picking up
applicant who have relatable qualification and ability to getting these job. In IKEA recruitment
and selection is also conducted by the management team. If an individual want to work with Ikea
can easily apply on the open position in company by online and also by walk in interview.
Individual have certain quality for job in IKEA and which is examine by the interviewer i.e.
driven and adopt a teamwork, quality, good communication and urgency of the job. Individual
must have specific experience and qualification, must be down to earth and candidate must have
the spirit of advertising. An individual who have potential, specific education, experience, age
and attitude are going through the selection process. In process of selection series of question is
asked by the panel of BOD and after selection is go for training.
Purpose:
Major purpose of recruitment and selection is to attract the right candidate in
organization, it is lawful function which build good image of company, applicant feel genuine
for the job offer and also feel confident about the selection process.
Compensation Management:
It is act which provide the monetary and non-monetary benefits to their employees for
their jobs and duties. It’s also providing to individual for motivate them. HR department of
IKEA also design the compensation package for their employees, they consider role, extra
working hours, PF, ESIC, performance of individual. They also provide non-monetary benefits
like insurance their pet, paid tour package, medical facilities and also provide facility of pension.
Purpose:
The key purpose of compensation management is attracting highly capable and efficient
employees. It is also important for retain the employees in firm. They are also very important for
boost up the morale and motivation of employees of IKEA. Compensation management are
helpful for
2

P2- Strength & weaknesses of recruitment & selection approaches
INTERNAL APPROACHES
STRENGTH WEAKNESSES
1. PROMOTION
It is a process of progression of the employees
to a higher position at a specific period.
Ikea through promotion raises the morale of its
employees which help the them to work with
more enthusiasm.
The employee’s retention rate in Ikea is quite
higher as the personnel in view of the
promotion tend to remain in the company and
work hard to seek it.
1. PROMOTION
The main weakness of this method is that it
does not introduce any new & innovative ideas
in the company because no external candidate
is hired
Besides this, it creates a sense of resentment in
the minds of employees for each other. The
Ikea employees creates hatred among others.
2.JOB POSTING
Ikea to fill its vacant seats, posts the
advertisement of the vacant jobs on bulletin
boards, notice boards as well as informs the
employees through memos.
The main strength of this method is that the
Ikea employees see a room for their
development and advancement.
Apart from this, The work load of the
managers of Ikea remain less as they are
already aware of the working of the employees
and know their skills and potential.
2. JOB POSTING
It may introduce an unhealthy competition
among the employees to secure the vacant
seats.
Moreover, It lacks the talent pool from which
the new employees could be selected and
therefor limits the options of Ikea to select the
best candidate.
3.TRANSFER
It is the act of transferring the employees from
3. TRANSFER
It has been seen that the employees of Ikea
3

one branch to another or from one department
to other.
This internal recruitment method help the
employees of Ikea to gain the thorough
knowledge of the different job and perform
them efficiently.
who are being transferred to the another branch
sometimes finds it difficult to adjust in its
working environment and also face problems
in performing the different job.
EXTERNAL APPROACHES
STRENGTH WEAKNESSES
1.NEWSPAPER ADVERTISEMENT
The selection process of Ikea also involves
posting the job and its details in newspaper and
attracting the candidates.
The best advantage of this is it taps a large
geographical areas and reaches almost every
candidate.
The HR managers of Ikea has the freedom to
design the posting on the basis of budget and
have various options.
1.NEWSPAPER ADVERTISEMENT
The most important weakness that Ikea faces is
that this method limits the number of people
who read a particular newspaper. For example-
Ikea posted its vacancy in Bharat times
therefore it reached only that candidates who
reads this newspaper.
2.CAMPUS PLACEMENT
Ikea visits various management and technical
institute to hire a bunch of students who have
completed the education or currently pursuing.
It allows the company to hire the highly skilled
and talented students.
It creates a massive talent pool of the
candidates and Ikea have the wide opportunity
to select from that pool
2.CAMPUS PLACEMENT
Ikea hiring the fresh graduates encounters a
major problem of providing training to them
which cost them a huge amount.
Secondly, They are not sure whether they will
stay in the company for long or not.
4

3.EMPLOYMENT AGENCIES
Ikea outsources the selection process to
employment agencies who are responsible for
finding qualified employees for them.
It saves their precious time as well the cost of
hiring the employees.
Most importantly, It brings the candidates
which exactly matches the job requirement and
are proficient.
3.EMPLOYMENT AGENCIES
Ikea pays a great amount of fees to the
agencies approx. 30-40% of the annual
earnings of an employee therefore its quite
expensive.
Sometimes it becomes difficult to exercise the
control over agencies and ends up in making
wrong decisions.
SELECTION APPROACHES
INTERVIEW
STRENGTH WEAKNESSES
Interview helps the Ikea interviewer and the
employees to develop a sound mutual
understanding between them while conducting the
internal recruitment process as well as increases
knowledge of both.
While selecting the external candidate, It helps
them to select the most efficient candidates and
extract the sufficient information.
While selecting the internal employees, Many
interviewers of Ikea tend to be bias and design
questions to secure his favorite candidate.
In purview of the cost and expenses, interview
approach normally incur high cost of traveling
to locations for hiring the external candidates
as well as require extra time and effort.
LO3
P3. Benefits of HRM practices to employer and employees
Employer Employee
5

Training and development: As the workers will be skilled
and enhanced it will generate
more of revenue to the
organizations. As IKEA deals
with furniture and home decor
More of skilled workers will
help in efficient working in an
organization. The work ethics
of the workers helps industry
in the salient working. The
time dependency will be less if
more of the workers will be
skilled. Motivated employee
will work in a fair manner.
Efficient worker will work
accordingly which will help in
revenue generation which will
bring laurels to the company.
Training and development
helps in the overall growth of
an organization. It helps in the
development of social and
moral work ethics, which
increases the job satisfaction
of the employee. It boosts
employee motivation and
awareness towards the job. It
increases efficiency of the
workers. It increases
innovation and mindsets of the
workers changes as they begin
to grow their skills as the
workers of IKEA will be
skilled and efficient in the
working there will be fewer
possibilities of failure in their
job.
6

Flexible working: As the company IKEA will
provide more of the flexible
environment to the workers
they will work more efficiently
as the healthy body will work
more efficiently than a tired
body as the efficiency of
workers is increased they will
add up the revenue to the firm.
Misunderstanding between co-
workers are reduced which
creates a healthy environment.
Flexible working in an
industry will help in growth of
industry and worker, like
working in shifts will help
employee to rest physically
and mentally which will help
in all round development of
the company. As the employee
are polished with skills
managers will take lesser time
for explaining things and
managing them.
Performance management: Performance of each
individual is tracked and
recorded which gives an idea
about the changes needs to be
made by managers and to
improve the skills of each
individual where required.
Based on the performance
which are tracked the
employee gets rewarded as
increase in wages and
increments. Based on the
performance workers are
provided with appraisals in the
firm.
Based on the performance of
the employee they are
provided with tasks which they
are best at. This helps in
growth in career. This helps in
learning and development
opportunity. It acts as a link
between performance and
exception. This gives an open
job feedback to the workers.
Payment and reward
management:
Reward can be anything which
boosts the working culture of
To create a healthy working
environment in an industry
7

the individual example:
increase in wages of
performer, any other facility
which help worker like
transportation, health and
safety benefits, which helps
industry in keeping the pace in
the market.
employees are rewarded.
Which help in their self-
growth and development of
their skills. This helps in the
appraisal of the industry.
Reward boosts up the working
strategy of the individual as
well as of the team, Reward
management will increase the
level of performance of each
employee.
P4. Effectiveness of HRM practices
Learning, training and development – It is the subsystem of an organisation which
emphasis on the efficiency and improvement in the skills of the employees. Ikea develops a
comprehensive training package, in order to maintain a motivated and skilled workforce and to
fulfils the need and growth potential of the organisation. They design the learning training and
development programs based on both the organisation's and the individual's need to assure that
training fulfils co-workers needs, objectives and relevant organisational and statutory policies,
including health and safety, employment and equity laws.
Efficiency – This training and learning program motivate the employees to give their best with
the help of time to time trainings. Ikea provides computer training to its workers to motivate
them Employees are also enhance to work with schedule time management. More improvement
in their skills increases the workers work efficiency and effectiveness.
Skills – The training programs helps the employees to enhance their working skills with the
sustainable use of time and resources with effective output. With training and development
programs employees learn advanced skills which helps them to make furniture with the tricky
ideas and new concepts.
Flexible working – Flexible working provides the worker the flexible working hours as
Ikea allows their employees to work for prescribed working hours and if overtime is done they
would pay for it. Ikea provides a friendly environment to all his employees they are very flexible
8

with the employees needs and urgencies. They had their scheduled paid leave for any emergency
in the family extra Christmas leaves, sickness pay scheme where you will be paid for the sick
leave etc.
Efficiency – Ikea says each their co-workers bring their unique ideas and talent to work every
day – they are what makes IKEA great. They make sure every co-worker feels welcomed and
valued, and has the opportunity to develop their potential so they work on the flexibility of the
working.
Skills - Flexibility of working helps employees to work more efficiently without any pressure. It
helps employees to grow their skills and explore up with new ideas for the furniture and
appliances designing.
Payment and reward management – The achievement and benefits received by
employees for their job performance in an organisation are known as reward. Ikea is committed
to providing its employees with a living minimum wage. Ikea has also created employee loyalty
program it called “Tack” which is Swedish for word “Thank you” in such program they provide
all full time and part time employees with over 5 year of service with an annual bonus based on
Ikea's performance in that country of operations.
Efficiency – This rewards by Ikea motivate and encourage workers to work for the long term
stability and with a sustainable work output. This influence employee’s worker to work hard for
the company's objective which helps the Ikea to grow rapidly.
Skills – Rewards and increase in payments sets a positive mind set among the co-worker to
became the part of the rewards and appraisal they will work more efficiently which enhance their
working skills which somehow directly influence the company output.
Performance Management – Performance management is the process reviewing an
employee' performance during the preceding year or cycle and deciding where he or she stands .
In Ikea they provide promotions to the old employees as per their work efficiency. Co-workers
are marked up with the grade provision based on seniority. The performance of the employees
plays a major role in the promotions and the yearly appraisals (Taylor, Doherty and McGraw,
2015).
Efficiency – The performance management program by Ikea enhances the particular employees
specific performance during the preceding year and the employee is rewarded with a good
9

appraisal or promotion according to their skills this influence employees to enhance their
working efficiency individually also.
Skills – By this program skills of the employees also grow as per the employee works towards
the individual growth and develop more and more skills. Ikea's this management strategy
towards its employees let it became the best place to work for employees with the flexibility and
work positively towards the company’s profit.
LO3
P5. Importance of employee relations
Employee relation:
Employee relation refers to the efforts made by company to manage relationship between
employers and employees (DeCenzo, Robbins and Verhulst, 2016.). Organization with a fair
and consistent relationship with employee will be benefited with fair and salient working of the
organization.
If the relationship between co-workers will be good then it will be easy for an organization to
work in a team. Healthy relationship between colleagues will create a healthy environment at
work. It is a key duty of the seniors to create a peaceful environment at work and to discourage
the conflicts between co-workers and promote them for a healthy working environment. Most of
the time is spent at the same place of work which must be enjoyed and built a healthy
relationship with group mates instead of quarrelling. A healthy place of work keeps on
motivating and boosting the morale of workers in an organization.
A person only enjoys his place of work only if they get a peaceful environment and a supportive
fellow worker. A fresh environment built your self-esteem and helps you to achieve heights. If
you have a healthy relationship with fellow worker it will help you to keep pace in the office.
Many times a situation arises when you need to adjust with your fellow workers and compromise
many things.
Importance of employee relationship in an organization:
Every worker in an organization shares a certain relationship with his fellow worker. Every
individual needs a support socially and emotionally from his fellow workers, if you work alone
you will not be able to flourish and develop as a social well-being.
There are many curves where you cannot decide alone on what to be done next. You always need
a helping hand in a company (Berman and et.al. 2019). If you have a healthy relationship with
10