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HRM Strategy in a case study on IKEA Essay

1. Introduction
The human resource function has undergone throughout its history major transformations and evolutions. Concepts managements have given way to others as imposed by the globalisation of markets and by a workforce more educated, more fluid and diverse. In this context of internationalisation, companies are anxious to take their benefit so as to seek the most advantageous model management. United States speak of mobilising and unifying model of human resources. Warner (2011) discusses about Japanese model that focuses on employee participation in company decisions. Finally, the Swedish model which works on the establishment of principle of consensus. Each of these models present advantages and disadvantages, strengths and weaknesses. What is the most interesting model of human resources management and more profitable for the organisation? , the models are they transferable and applicable to cultures and different to hand out?

Can a European model applied in North America and a Japanese model in Europe? What adaptation the organisation needs to do to succeed in setting? To answer this question, I have chosen the Swedish multinational IKEA. The organisation was founded in 1943 by its principal designer Ingvar Kamprad in southern Sweden. The organisation has more than 325 stores, present in 44 countries around the world, and employ more than 140,000 employees. In Quebec, IKEA opened its first store in 1982 in town centre of Montreal, in 1986 it then moved to Cavendish in the borough of Saint-Laurent employed 13,000 people in North America. The main activity of the company is selling furniture and interior designs; it is considered a world leader in this niche market.

In this analysis I will try to define the concept model of human resource management IKEA adopted for its store in Quebec, understand the reasons for this choice and the success of this model. Present the functions of HRM in this organisation and its evolution through the years and finish with a personal reflection on practice and business strategy in this area The IKEA case study discusses the aspects of HRM and the approaches adopted by IKEA focuses on nurturing and developing staff. In aiming to achieve corporate goals, this initiative has enable growth, innovation, creativeness and success of the organisation. In this case study, the analysis will focus on recruitment and selection, training, work organization and labour mobility.

2. HRM practices and systems in place

In order to achieve strategic objectives and goals defined by the founder Ingvar Kamprad, IKEA made changes in its human resource practises and culture at work. The organisation has put in place a human resource management initiative that makes it have a competitive advantage. Furthermore IKEA human resource management style is largely described as incorporating the HRM strategy with its corporate strategy. In terms of the organisation’s business strategy, it can be analysed that it has evolved for the past few years, where new strategy such as innovative and creative designs has taken place for more affordable cost.

3. Measurement of Managers performance

The Swedish company, committed towards its working time frames restructuration, identified as an essential point to measure its managers’ performance. “A senior officer should not be a doer, but a team coordinator,” says Marc Chousseaud, human resources director who is one of the twenty leaders judged. This assessment tool allows everyone to become aware of defects management. Inaugurated in March during a training session of leadership in management, the tool – called Index Coordination Skills – is part of the Anglo-Saxon Team Management System method. It comes in the form of a questionnaire with 66 points relating to 11 skills that the manager must show. Each of the twenty managerial staff was initially self-assessed and distributed the questionnaire to teammates at headquarters and in stores. The Director of Human Resources has been judged by his collaborators (five person) and nine human resources managers, all done in an anonymous way. This cross-evaluation overcomes personal conflicts and obtains the most objective assessment possible. 4. The eleven skills measured for executives Ikea

The 360° evaluation of Ikea frames method, used by Team Management System, determines eleven core competencies:

▶ Listening: the manager must listen before judging;
▶ Communication: he regularly exchanges with members of the team;
▶ Troubleshooting: it is available and ability to overcome obstacles;
▶ Team development: it provides the balance of talents;
▶ Division of labour: it distributes tasks based on skills and individual preferences;
▶ Confidence: it promotes respect, understanding and trust;
▶ Delegation: he says the work he should not personally perform;
▶ Exemplary: he leads by example and is accepted by the team high standards of quality;
▶ Determination of objectives it sets exciting challenges and exerts a constant pressure to improve performance;
▶ Coordination: coordinate effectively and meet all the members of his team;
▶ Participation: it involves team members in solving important problems.

Companies are often considered unsatisfactory, both from the point of view of employers and that of employees as well. The definition of evaluation criteria also depends on the type of management practiced in the organization. In this context, the evaluation of the individual is in achieving or not objectives fixed. Schematically, the performance of an individual can be evaluated along three dimensions, Work done; Results of its work; and Personal characteristics.

5. Motivation Factor

The motivation of people at work is a key factor in business success. The meaning of work and character of obligation are dependent on its culture, structures, social, and economic realities. The involvement and motivation cannot be obtained everywhere and always by the same means. Theories and methods used by business leaders and managers to boost motivation date forty years , while the conditions of work, nature of work and skills as well as the socio- economic conditions have changed considerably and change again. Mitchell (1982) states that to engage in certain specified behaviours, motivation is considered as the level which is chosen and desired by an individual, however Steers and Porter (1991) defined motivation to be a number of forces that are co-related thus causing people to have certain way of behaviour.

The third strategy is the management of human resources in the store. 75% of employees work in IKEA stores. The primary role of the store management is to recruit, train and retain motivated employees. There are a number of key factors to effectively manage a store: a turnover rate of the size of the order of 20 % per year, a proportion of full- time should not be less than 40 % or 50 % of the workforce , a maintenance management staff for five years in the ideal, and in any case for at least three years . Depiction from IKEA case study highlights that the IKEA’s SHRM policies have led to significant fall in employee turnover, i.e. fall in employee turnover to 6% in 2001 to 56% in 2002, and only 35% in 2003, thus prominence rise drift in motivation of the employees to be a part of the organization above longer durations than before. Strong leadership, a focus on skills development and planning staff are key to the management of human resources.

Maslow hierarchy of needs

IKEA case study has showed the use of motivational techniques ranging between Maslow’s hierarchy of needs i.e.: psychological, security, safety, affection, self-esteem, and self-actualisation.

6. Conclusion
IKEA’ culture notably values the employees; by providing enriched job the organisation promotes engagement amongst employee. IKEA should use effective communication as a mean to promote high level of engagement and interaction. Different methods of communication can motivate from low level to high level of interaction. In IKEA case study an important aspect has been noticed that is none other than the use of communication. Communication eventually improved the relationship between employees with employers and enhanced the ambition in terms of motivation and commitment of the staff towards the company. In conclusion, for IKEA to be successful on a long run, they need to promote employee engagement and interest towards the organisation. In order to generate and engage workforce, IKEA need to value its employees and show them that they genuinely care for their well-being. IKEA has proved about its concerns about care and employee flexibility where this initiative has contributed greatly in engaging employees in the organisation.

References:

Baron, A. and Armstrong, M., (2007), “Human Capital Management, Achieving Added value Through People”, Kogan Page Limited London Amstrong, M., (2008),
“Reward Management: A handbook of Renumeration Strategy and Practice”, Kogan Page Limited London Barney, J., (1986), “Organizational Culture: Can it be a source of sustained competitive advantage?” Academy of Management Review, Vol. 11, No. 3, Pg. 656-665 Attridge, M., (2009), “Measuring and Managing Employee work Engagement: A review of the Research and business literature”, Journal of Workplace behavioural health, Pg. 383-393 Corone, B., (2012), “Research in Management”, Eramus Institute of Management PhD Series, Netherlands Clutterbuck, D., (2004), “Making the most of informal mentoring: A positive climate is key”, Development and Learning in Organizations; Vol. 18, Issue: 4 Sarah, C., (2010), “The essential to employee engagement: better performance through staff satisfaction”, Kogan Page UK Douglas, et al., (2004), “The psychological conditions of meaningfulness, safety and availability and the engagement of human spirit at work”, Journal of Occupational psychology, Pg.11-37 Gerhart, B. & Fang, M., (2005), “National culture and human resource management: assumptions and evidence”, International Journal of Human Resource Management, Vol. 16 Issue 6, Pg. 971-986 Duncan, C., (2001), “The impact of two decades of reform of British Public Sector industrial relations”, Public Money and Management, Pg. 27-33 Gunnigle, P., Heraty, N., & Morley, M., (2006) “Human Resource Management in Ireland”, Gill & Macmillan, 3rd Edition Dublin Gibb, S., (1994), “Inside corporate mentoring schemes: the development of a conceptual framework”, Personnel Review, Vol. 23 No. 3, Pg. 47-60 Kelly D. & Albert J., (2005), “Maslow: man interrupted: reading management theory in context”, Management Decision; Vol. 43 Issue 10 Hofstede, G., (1991), “Cultures and Organizations: Software of the Mind, Intellectual Cooperation and Its Importance for Survival”, Berkshire, McGraw Hill Lynch, R., (2003), “Corporate Strategy”, 3rd Ed, FT Prentice Hall Kinne, N. Et al., (2005), “Satisfaction with HR Practices and Commitment to the Organisation: Why one size does not fit all”, Human Resources management Journal Amstrong, M., (2006), “Strategic Reward: Making it happen”, Kogan Page Limited London Rayner, C. and Derek, A., (2009), “Managing and Leading People” 2nd Edition CIPD London Marchington, M. & Wilkinson A., (2008), “Human Resource Management at Work, People Management and Development”, 4th Edition CIPD London Rolf, R., (1999), “Workforce of the future”, Global Business, Pg. 52-57 Murphy, K. & Gosselin, A., (1994), “The failure of the performance evaluation”, Vol. 19, N° 3 Amstrong, M., (2009), “Armstrong handbook of Human Resource Management Practice”, Kogan Page Limited London

Web references: Case Study
http://www.palgrave.com/business/beynon-daviesbis2e/students/case-studies/IKEA_2nd-edition.pdf http://www.iisd.org/business/viewcasestudy.aspx?id=119

http://www.staffs.ac.uk/schools/business/resits/postgrad/InternationalSupplyChainMgmtIKEACaseStudy.pdf http://businesscasestudies.co.uk/ikea/swot-analysis-and-sustainable-business-planning/introduction.html#axzz2yEzaqxUf http://www.slideshare.net/asad101/ikeacasestudy-12663939423849phpapp02 http://www.eurofound.europa.eu/emcc/labourmarket/greening/cases/ikeasweden.htm http://www.circleinternational.co.uk/CIRCLE/Strategy_files/ikea%20mrktswot.pdf


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