Operating in over 32 countries, IKEA is one of the largest manufacturers of furniture in the world (Maxwell 183). The company is popular for its furniture retail, credited for the style and innovative way in which they are made. Additionally, being the first-ever company to make and sell furniture that is easily dismantled to allow for easy transportation, IKEA has made a mark in the furniture business.
Human Resource Practices and Policies
The company’s strong business initiative is said to be linked to its committed workforce, which initiated the culture of innovativeness. The human resource policy at IKEA has been adopted from the perspective of its vision statement. The company’s vision is “to create a better everyday life for the many people”, where the concept of people is regarded as an all-inclusive initiative comprising of the surrounding community, staff, and customers (Maxwell 187). The company’s HR philosophy is directed towards the belief that employees can work better with a committed attitude if their needs were highly regarded and well taken care of by the employing company. This was regarded as a positive approach in the management of employees that would benefit their company through staff commitment. To empower their employees, IKEA applied a paternalistic approach, where employees worked as one unit of a family, treated equally in all aspects and needs. The open human resource policy was seen as a way of organizing work in a manner that would enable easy transferability of skills and spur innovations. This approach is also used to award employees handsomely, with generous packages to increase their commitment to work.
In the last decade, the company initiated several changes to its human resource department by adopting a ‘work balance’ strategy where employees were given time to gauge their personal lives and work. This was intended to make employees more committed and have a culturally balanced lifestyle in the workplace. It in effect developed an open culture of mixing ideas, sharing personal experiences as well as increasing care for each other in an open engagement.
Although this approach was lauded for all its positive results and attributes, it developed some critical problems for the company in terms of not achieving an overall goal. In other words, the approach has some drawbacks that need to be looked at. First, the paternalistic approach has not gone down well with all levels of employees, especially those at senior positions. In essence, the approach was structured such that the application of rewards and benefits to the employees was standardized and uniform in implementation. It failed to work as expected as employees are known to have different needs as far as human interests are concerned. This in effect leads to failure to boost employees’ morale across the board as relations between their respective objectives becomes incompatible. According to Banfield & Kay (14), the objectives of the employees are mutually exclusive and incompatible as far as managerial and employee duty is concerned. In other words, the managerial aspect of developing employees to increase efficiency may not be compatible with the employee’s need to do as little work as possible. This may be a source of conflict between employees and managers, who are expected to work as a family.
Additionally, employees at IKEA were allowed to explore and advance their careers, with the company expecting to reap more benefits from more knowledgeable members of staff. It must be observed that the objectives of both employees and managers can be attained despite the overlap between them, particularly where the employees’ needs for career growth are seen to reflect the company’s objectives of increased skills, hence more and quality productivity. Although this may augur well with IKEA’s objectives, it is critical to note that it may be a source of conflict between employees and managers. Banfield & Kay (15) says that this approach is sometimes fragile and may offer just a temporary solution to the company’s needs as far as objectives are concerned.
Although the cost of IKEA’s HR initiative is high, the result is worth it as far as profitability is concerned. Furthermore, it has considerably reduced the company’s employee turnover from over 70% to 35%, nearly a half of the industry average of around 60% (Maxwell 184). However, sometimes the objective of having long-term employment for its employees may be profitable at the initial stages of its initiation, but not in the long term or all circumstances. It must be noted that long-term commitment made by employees in exchange for job security may not outweigh that made to provide high-quality employment (Banfield & Kay 15). Banfield & Kay observe that even in situations where there is a need to scale down human resource costs in terms of layoffs, quality work commitment would still be compatible with the employees’ needs; hence the satisfaction of the two parties.
It is therefore important for IKEA to adopt a more realistic approach as far as work relation is concerned. That is to say, the conflict that may occur between the two entities may be superficial and may be sorted out through proper management skills. Reasonably, there’s more need to emphasize the quality work commitment on the side of employees instead of long-term commitment.