IKEA's Innovative Human Resource Management Practices and Work Culture
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Human Resource Management Practices
This did not always work well, as different employees had different needs. In the late 1990s, when Spiers-Lopez became the HR head at IKEA North America, she realized that employees were not able to derive the maximum benefit from IKEA's generous HR policies, as the policies did not always match individual needs and requirements. She felt that employees would benefit more if there were a greater amount of flexibility in benefits administration...
IKEA's positive HR policies were supported by a strong and nurturing culture that promoted diversity and creativity. Spiers-Lopez said IKEA's culture was characterized by a family-like quality that made relationships between employees strong and open.
No doubt IKEA's generous policies involved substantial costs for the company (sometimes they seemed to be the antithesis of the company's cost conscious culture), but the pay off far outweighed the costs. For one thing, IKEA's employee turnover fell drastically, from 76 percent in 2001, to 56 percent in 2002 and 35 percent in 2003. The company's turnover was also almost half the average industry rate, which hovered around 60 percent. This substantially lowered the company's costs in recruiting and training replacements...
Exhibit I: IKEA's Ownership Structure
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