IKEAs

Innovative HRM Practices

&

Work Culture
Presented by

Jaskaran, Prithvi, Stu

Sona, Prashant, Swet

Content
1 Company Background
2 Organizational Structure
3 Products
4 HRM Practices
5 Values
6 Complaints
7 Work Culture
8 Reasons Why People Stay @ IKEA
9 Best Employer
10 Values Offered At Workplace
11 Payoff
12 Sustainability Initiatives
13 Culture & Innovation
14 Some Innovative Products

Company Background

IKEA is aSwedishcompany
registered in theNetherlandsthat
designs and sellsready-toassemble furniture appliances, and
home accessories.
Founded inSwedenin 1943 by a
17-year-oldIngvar Kamprad.
The first IKEAstore was opened
inlmhult,Smlandin 1958.
Name is an acronym of Ingvar
Kamprad,Elmtaryd (the farm
where he grew up),
andAgunnaryd(his hometown
inSmland, South Sweden).
Furniture work is often associated
with aneco-friendlysimplicity.
The firm is known for its attention
to cost control, operational details,
and continuous product
development, corporate attributes.

LEIDEN in the World

Map

Ingvar Kamprad

Global Expansion

First stores outside Sweden were opened in Norway (1963)

andDenmark(1969).
In the 1970s, the first store outside Scandinavia opened in
Switzerland (1973) followed by Germany (1974)
Later that decade, stores opened in other parts of the world, such
as Japan (1974), Australia and Hong Kong (1975), Canada (1976),
and Singapore (1978)
IKEA further expanded in the 1980s, opening stores in countries
such as France and Spain (1981), Canada (1982), Belgium (1984),
the United States (1985), the United Kingdom (1987), and Italy
(1989)
Germany, with 44 stores, is IKEA's biggest market, followed by
the United States, with 37 stores
The first IKEA store in Latin America opened on February 2010
inSanto Domingo, Dominican Republic.
With 70 years of experience IKEA is serving in 42 countries to
approx 552 million customers

IKEA Numbers

Recent Expansion
Doha, Qatar (Mar 2013)
Johnson, Kansas (May 2013)
Lithuania, Baltic (Aug 2013)
Missouri, US (Dec 2013)

Location
Worldwide
Stockholm Kugens Kurva,
Sweden, 55200 m2
Sanghai Baoshan,
China, 55032 m2

Montreal, Quebec
Canada, 43636 m2

Sanghai Pudong Beic

China, 49400 m2

Tempe, Sydney,
Australia, 42000 m2

Co - Workers
Co workers per function

Co workers per region

Retail

106,500

Europe

99,000

Purchase &
Distribution

14,500

North America

18,000

Industry Group

18,000

Asia & Australia

11,000

Total

139,000

Russia

11,000

Ownership Structure

Shops &
Factory
INGKA Holdings
(Netherlands)
Stitching INGKA
Foundation
(Netherlands)

Franchise &
Trademark
Inter IKEA
Systems
(Netherlands)
Inter IKEA Holding
(Luxembourg)
Interogo
Foundation
(Lichtenstein)

Products

IKEAs around 9500 products, that are identified by one

word (mostly Scandinavian)
Articles

Name derived from

Upholstered furniture, coffee tables,

rattan furniture, media storage,
doorknobs

Swedish Place names

Beds, wardrobes, hall furniture

Norwegian Place names

Bookcase ranges

Occupation

Bathroom articles

Scandinavian lakes, bays and

rivers

Kitchens

Grammatical names

Chairs, desks

Mens names

Garden furniture

Swedish Islands

Lighting

Terms from music, chemistry,

seasons

Children items

Mammals, birds, adjectives

Kitchen utensils

Spices, herbs, fish, mushrooms,

berries

Curtains, carpets, bed accessories

Mathematical & geometrical terms

Guess What ??

DUKTIG (wellKASSETT
behaved)
(cassette)
BILLY
(Swedish
Male Name)

DINERA (to dine)

OSLO (capital
of
SKARPT
(Sharp)
Norway)

Funny items !!

Other Businesses

Restaurants And
Food Markets

IKEA Family
Loyalty Card

Samaland - The
Play Area

IKEA Mobile Catalogue

BoKlok Houses
And Flats

Family Mobile

IKEAs Vision
To create a better everyday life for
the many people

HR Management
Practices

People Employees, customers and the

community.
Philosophy subscribed to the belief that
employees were more productive and
committed when the company took care of
them and their needs; paternalistic stance
Promoted employee empowerment
Grievance procedure VOICE- company-wide
survey
Encountered a problem Application
was standardized, uniformly applied policies
to all
Didnt work well differing needs of
employees;
maximum benefit not being derived
Late 1990s Spiers-Lopez became HR head at
IKEA North America; realized that greater
flexibility was needed
She conducted comprehensive employee
surveys, asked detailed questions about their
needs, expectations, preferences.

Spiers-Lopez

Flexibility Policy
Initiatives that supported life
balance and diversity were created
Flexibility foundation of IKEAs HR
management philosophy.
Eg - 1. Flexible six-holiday schedule
Eg - 2. Flextime introduced
employees to choose when to start
and end workdays, subject to
requirements of store or office
Condensed work-weeks, job
sharing, telecommuting, video
conferencing also introduced
IKEA allowed employees to
coordinate schedules with spouses
work hours, in case of small children

Flexibility Policy(contd.)
Willing to transfer employees
between locations if there was a
matching opening
Aim of the policy was to ensure
employees didnt have to sacrifice
careers due to personal
commitments
Spiers-Lopez said If an IKEA coworker needs to take time off to find
a nursing home for an aging parent,
be home to kiss their child before
bed, or telecommute to better juggle
caring for a newborn, they can
actually do that without feeling guilty
or worrying about risking their career
aspirations
Led to employee motivation and

Other Initiatives
Substantial investment in making
stores more comfortable during
nonworking hours
1. Quiet rooms to pray or meditate
2. Lactation rooms for nursing mothers
3. Onsite childcare facilities
4. Entertaining rooms to receive visiting
friends and family
5. Resource rooms for employees to
access computers to browse IKEA
approved websites containing health
information, self-improvement tips,
forthcoming training details,
development programs, job openings,
etc
Also received substantial discounts at
IKEAs onsite restaurants

Benefits Policy

Full medical and dental insurance to all

employees working 20 hours or more
per week
Discounts for weight reduction,
smoking cessation services, free
subscription to health & wellness
magazines
Parental benefits 7 weeks maternity
leave with full pay for women; men
and adoptive parents got 1 week with
full pay
Employees encouraged to take a
vacation every year and could carry
vacation time to the next year
All employees were eligible for 15%
discount on IKEA merchandise
At annual Coworker Appreciation
Day- upto 40% discount on store

Additional Benefits
Tuition reimbursement for graduate and
undergraduate courses for all employees regardless
of how many hours they worked-contributed to
continuous development of employees
Employees were encouraged to take up study of
languages and pursue courses of potential
application in retail sector like accounting, interior
design, etc
IKEA paid 75% of the course fee upfront and
remaining after the course was done
Gave special bonus of $1000 to employees who
stayed with the company for one year after
completing the course
Policy also benefited IKEA as it required skilled
candidates for future promotions
Not just full time but part timers were also eligible
for the program
IKEA didnt lay minimum service conditions for
employees to become eligible for benefits

Important Elements of IKEAs HR

Management Policies & Their Effect on
Employee Morale
1. Flexibility in all areas :

2.

Employees could achieve better

work-life balance
Enhanced trust in the company
Greater productivity
Benefits policy :
Greater organizational
commitment and job satisfaction
Greater perceived organizational
support IKEA cared about
employees well being- onsite
childcare facilities provided by
IKEA
Low employee turnover
Greater employee engagement
open communication, enhanced
motivation and commitment

Employee Development

Policy on training and development

Employees could use several resources
to sharpen their skills and gain knowledge
Had specialized training programs
in various areas
Mentoring
Launched a program called Partners for Growth
Prepare them for greater responsibility, leadership needs
This made employees supported helped them grow
Paddle Your Own Canoe
Take responsibility for their own careers
Worked with mangers to know the skills required
Training done according to the requirements

 I Want Your Job

Train with the person whose
job they want
The development programs
were designed so that IKEA can
have a ready pool of
candidates for future
All the employees were given
the chance to advance
Programs were two way
activities

 Open IKEA- told employees of new job

openings within IKEA
Openings were put on websites, advertised
through catchy stickers on mirrors, soft
drink machines
Enterprise- E-recruiting system which
reduced the delays in hiring at global level
Responsibility of hiring recruits with store
managers

Employees Chosen
Practical skills
Ability to understand and get
along with other people
Ability to ask questions and give
inputs
Encouraged employees to
question the management and
express their ideas and belief
Co-workers who had mastered
their current jobs were encouraged
to seek new challenges
Job enlargement or enrichment
Value fit was the selection criteria

 Why Savers- ideas to improve

store
The company even gave an
advertisement inviting Why
Savers to join the company
Express Yourself- share
companies concerns and
complaints with Spiers Lopez
This improved the morale within
the company as she responded to
their complaints personally
It had a comprehensive
communications system for
employees like IKEA Radio and
intranet.
It also reached employees
through printed material as well

IKEAs Values
Togetherness and enthusiasm
Constant desire for renewal
Humbleness
Willpower
Cost consciousness
Leadership by example
Diversity is part of life
Simplicity

Complaints Against IKEA

In USA- workers complaint of
eliminated raises, a frenzied
pace, racial discrimination,
mandatory overtime
In Turkey- they were against
union forming by its employees,
they terminated employees who
were unionising and put pressure
on others to quit.
In France- it caused an outrage
as it spied on its employees

Work Culture
At IKEA, we think of ourselves as a family. Just as
one would look after their parents, siblings or
children, our coworker family is encouraged to and
excels at supporting and taking care of each
other.
-Spiers-Lopez

Work Culture
IKEA called all its employees, regardless of
rank, coworkers.
To promote open communication, IKEA adopted
a structure with no hierarchical distinctions.
Employees were encouraged to express their
opinions and ideas directly to the top
management .
Employees were
rewarded with high
level of empowerment.

Work Culture
Cost consciousness was deeply embedded in
IKEAs culture.
IKEAs culture promoted diversity.
Openness to change and adaptability were
stressed at IKEA.
Week-long orientation program
in Sweden on the IKEA WAY.

8 Reasons People Stay With IKEA

We hire the right people.
Theyre inspired!
Making mistakes is okay-really.
An up, Down and sideways career.
Sweden today, China tomorrow.
Egos parked at the door.
The rewards of a never ending job.
A parent friendly environment.

Best Employer

Awards & Achievements

In 2005, 100 Best
companies to work for
In Fortune magazine.
In 2004, listed as 100
best companies for
Working Mother
Lowest attrition rate in
the US retail sector.
In 2000, largest
privately held
companies.

Payoff
IKEA involved substantial costs
But payoff outweighed the costs due
to low employee turnover
So this reduced the cost
of repeated hiring and
training cost.

Sustainability Initiatives
Non-renewable material
used at IKEA
Recycling of nonrenewable materials
Investment in Renewable
energy
UTZ- Certification
programme for
sustainable growth of
coffee, cocoa and tea.
Better Cotton Initiative
(BCI)

Culture & Innovation at

IKEA

 Ikea has great products, no

doubt.
But that is not the only
reason why Ikea is
successful.
Ikea has a successful
concept of coming up with
innovative and new
products.
This is does successfully by
its culture, which fosters and
promotes innovation.

 There is absolutely an expectation at IKEA

that, with the flat organization structure,
everyone contributes. Everyone is
expected to contribute their ideas. It
doesn't matter what the idea is, it is
simply important that everyone
contributes. This way, more ideas come up
and this helps in more ideas coming up.
Ikea is a very process-oriented company,
with three basic processes: creating,
communicating and selling the homefurnishings offer.
Each of these three processes has a
matrix structure, and someone called a
matrix partner is responsible for
communicating the offer in every
country in the world. Since everyone is
equal, and constant communication, ideas
spread faster.

 Ikea operates by itself

when it comes to product
development. It is
completely independent,
and is not involved with
any external sources.
Ikea tries and explore new
avenues, and tries to
operate outside standard
operating procedures. By
doing so, IKEA manages to
hold and maintain its
culture of innovation.

Store Layout & Innovation

Everybody has the same desk
arrangement. This leads to an
accessibility that is rarely found in
companies. Even the CEO shares
his/her office space with other
employees, thus making it an
extremely open policy.
Ikea has a dedicated gathering space.
By doing so, it ensures the free flow
of ideas and thoughts, which
otherwise would not occur as easily.
A new concept called huddle rooms
has been introduced in IKEA, wherein
meeting rooms can be arranged for
spontaneously and without prior
permission. This promotes easier and
spontaneous flow of ideas and
thoughts.

Innovative Products by
IKEA

IKEA Bus Terminals

Adhesive-Free Furnishings

Side Table Sofas

The Table Vase

Severed Seat Storage

THANK
YOU