IKEA's Innovative Human Resource Management Practices and Work Culture


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Case Details:

Case Code : HROB066
Case Length : 15 Pages
Period : 1953 - 2005
Pub Date : 2005
Teaching Note : Available
Organization : IKEA
Industry : Furniture Retailing
Countries : Sweden

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"Maintaining a strong IKEA culture is one of the most crucial factors behind the continued success of the IKEA concept".

-Ingvar Kamprad, founder of IKEA.1

"IKEA values the individual. We make people comfortable here and enable people to grow."

- Jaime Martinez, Head of Human Resources at IKEA North America, in 2003.2

Best Employer

In January 2005, Fortune, a prominent international business magazine, published its annual list of the '100 Best Companies to Work For'. IKEA North America (IKEA), a major furniture retailer and the American subsidiary of the Sweden-based IKEA Group, was 62nd on the list.

IKEA won points for its innovative human resource management practices that emphasized flexibility and welfare while focusing on employee development.

The company's unique work culture that supported coworkers (as employees were called at IKEA) and encouraged creativity and diversity was also applauded.

Pernille Spiers-Lopez (Spiers-Lopez), IKEA's President, said the company was thrilled at being recognized as one of the best companies to work for. "We're delighted to be among Fortune's '100 Best Companies to Work For.' At IKEA, we live by the philosophy that when coworkers have the support and flexibility to make their personal lives a success, they thrive in the workplace, too," she said.3

A few months earlier, in September 2004, IKEA was listed as one of the '100 Best Companies for Working Mothers', in a study conducted by Working Mother magazine. It was the second time that IKEA was so listed. Working Mother appreciated IKEA's efforts at creating a workplace that accommodated the needs of mothers. Three issues were particularly stressed in this study - flexible work scheduling, time off for new parents, and childcare facilities.

IKEA's popularity as an employer was noteworthy primarily because of the fact that the retail sector, especially in the United States, was not known for being employee-friendly. Many large retailers paid low salaries and offered negligible benefits while expecting employees to work long hours.

This accounted for the fact that the sector had one of the highest turnover rates of all industries. Consequently, it also suffered from high human resource (HR) costs, as companies had to recruit and train replacements at frequent intervals. In this context, IKEA stood out for its employee-friendly policies and generous benefits, which made it the preferred employer in the retail sector.

IKEA's Innovative Human Resource Management Practices and Work Culture - Next Page>>

1] www.IKEA.com.

2] www.rehwoldt.com.

3] www.IKEA.com

  

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