Motivation Management at IKEA - Case Study Example

Motivation at IKEA Introduction IKEA is a privately owned multinational company known primarily for selling home décor items ranging from furniture, bathrooms accessories and kitchens at their retail outlets all over the world. It was formed 1943 by a young teenager named Ingvar Kamprad Elmtaryd Agunnaryd in Sweden who would sell all kinds of products like pens, runners, wallets, photo frames, watches, jewelry at low prices. IKEA is a short form of the founders name and is now known worldwide as the largest manufacturer of furniture. IKEA has somewhere around 278 outlets in 36 countries, most of the outlets are based in Europe, United States, Australia, Canada and Asia. IKEA sells around 12,000 products with the idea to sell a wide range of home furnishing products at process which are affordable by many people. When IKEA first started business, the furniture manufacturing took place locally near Ingvar Kamprad’s home. Kamprad used his home as an office and then started to deliver the furniture as well. As the business started to increase, Kamprad started to use new tactics like selling by catalogs. In 1952 Kampard used ‘flat packing’, an idea that would allow the furniture to be unpacked and reassembled so that its delivery is easier. Then onwards IKEA has seen its business increase more and more. (IKEA, 2008) The reasons for its success have been its quality of goods and quality of service. The service is provided by the IKEA employees in the stores as well as customer’s homes when the goods are delivered. The quality of service is never compromised and the committed workforce does not let the brand image go down. In this paper we will be discussing how IKEA has been able to keep its employees committed and motivated to deliver the quality of service customers expect. Theories of Motivation Motivation can be described as something that increases the morale of a person and makes a person positive to do something. In organizations people might not work as hard as the management wants them to so therefore the management might give some incentives to the workers to make them work better and faster. Motivation has been known to be best used if it has Intensity, Direction and Persistence. Intensity is concerned with hard working that is how hard a person tries to achieve a goal or an objective. Direction is mostly based with effort that is directed towards the achievement. And Persistence is mostly based the effort of an individual to keep doing the thing he is doing. There have been many important people who have described motivation in their own ways. Some of these authors are explained below. 1. Maslow’s Hierarchy of Needs According to Abraham Maslow there are 5 levels of needs of every person. These needs have been told as a pyramid with Physiological needs at the bottom. As the need of living, food and shelter is done, the upper level of need i.e. ‘safety needs’ is required. When a person starts to feel safe, he next needs social acceptance, then ego satisfaction and then the topmost need to self actualization. This is the last level of need where is person is said to have everything in life that is ever required. 2. McGregor’s Theory X and Theory Y McGregor said that there are two types of people in the world, theory X and theory Y. The theory X type of people is the bad sort they do not like to work and would do anything to get out of it. And it also suggests that the employees are lazy and do not like to have any kind of responsibility and must be forced into working. The theory Y suggests that the employees of the company like work and they are creative, they also seek out responsibility and they need little direction to do their work. (Fullmer, 1983) 3. Frederick Herzberg’s Motivation and Hygiene Factor Theory Herzberg’s Motivation and Hygiene Factor Theory is also known as the two factor theory where Motivation and Hygiene are the two factors. The Motivation factors are related to job satisfaction of the employee and Hygiene factors involve the absence and the presence of job dissatisfies which include working conditions, pay, company policies etc. 4. ERG Theory The Existence, Relatedness and Growth theory is quite similar to Maslow’s Theory of Needs but this one has just there levels. The existence need suggests that with providing the basic material existence requirements such as hunger, thirst, shelter, safety, protection and security etc. Relatedness suggests the desire for maintaining important interpersonal relationships. These factors are associated with social and status desires. Growth suggests that individuals have intrinsic desire for personal development. This would include self-fulfillment, self-actualization etc. 5. McClelland’s Theory of Needs Another similar theory to Maslow’s and ERG theory is the McClelland’s Theory of Needs. McClelland tells us that a person needs recognition of his achievement and desire to accomplish something difficult. A person also needs Power at the workplace which is the desire to control and influence others. And finally a person requires Affiliation to the workplace which is the need based on friendly and close interpersonal relationships. 6. Goal-Setting Theory The Goal Setting Theory tells us that with specific goals and goals that are difficult to achieve lead to higher performance of the employees within the organization. Specific goals produce a higher level of output than those goals which are not specific. (Fullmer, 1983) 7. Expectancy Theory The Expectancy Theory defines that motivation depends on the employee’s expectations about their ability to perform tasks and receive desired rewards. Expectancy is actually based on the relationship among the individual’s effort and performance. If the people feel that they have done something correctly and deserve higher rewards, then these expectations must be met. If they are not met, then the employees will become dissatisfied. (Robbins, 2000) Motivational Ways at IKEA The theories explained above are used in a mix. Some parts of the theories are applied injunction with other parts of other theories. At IKEA motivation may not be a explicitly stated policy, but since actions speak louder than words, IKEA does well with the systems that are in place. Here are some of the characteristics of the motivational ways at IKEA. Attitude Attitude can be defined as judgment that concerns an object, people or things. As we know that an individual has different types of attitudes regarding work activities. Therefore the people at IKEA make sure that the employees of the company are motivated in such a way that the employees achieve the stated goals of the company. The attitude is tried to be kept positive with regular contact and talks with the managers. Meetings are held to give the employees idea that everybody is a part of the company and nobody is left behind. Expectancy Expectancy can be defined as that there are people who expect that their ability to perform tasks and will gain them to receive the desired rewards. This kind of characteristic is only relevant when it considers excellent performance on the behalf of the employee on the job. The more the management of IKEA is particular about the work activities the more likely the employees of IKEA will work harder to achieve the stated objectives in time. However sometimes employees do tend to feel as if they have worked harder than usual on certain shifts thus should be rewarded more than usual. Overtimes are paid to compensate for this feeling. Harmony When a person visits an IKEA store, the person feels a sense of calmness and harmony. This calmness is found due to the serene environment created by the lighting, placement of items, cozyness of the area and the friendliness of the employees. The employees are kept satisfied and trained to give a customer maximum help in the most friendly manner possible. Harmony can be defined as a pleasant working environment within the organization. IKEA makes sure that there is harmony in its working environment, because if there is harmony then the employee will be benefited with it and their working performance will improve and they will also be motivated. (Employee Motivation, 2006) At IKEA there are 5 basic ways of motivating the employees. All the companies respect their boundaries of their culture and so does IKEA. Employee motivation is considered important when an organization is building relationships for better communication with their employees. Again these 5 motivating ways are taken from the above mentioned mix of theories where Maslow’s Hierarchy, Expectancy, Goal Setting, Two Factor theory and the others have been mixed together. We can divide the motivational ways into monetary rewards and non-monetary rewards. The Monetary Rewards include: 1. Remuneration/Salary: Most of the employees at IKEA are full time employees and they receive either a fixed salary or a daily wage. In order to keep the workforce motivated, the salary is raised annually at a percentage that reflects the employee’s performance. This performance is measured by the employee appraisals that take place regularly by the human resource department. 2. Anticipated Rewards: This reward is based on the expectancy theory that all the employees of the company want to reward for doing a job well done and it is the management’s responsibility to reward the employees. Bonuses and overtimes are part of this system. Once IKEA conducted a special bonus for its employees by pledging the entire day’s sales revenue for its employees. That day the sales were doubled and all the employees received $2400 each. The Non-Monetary Rewards include: 1. Participation: This is not an actual reward but rather an accompanying element of other rewards. By involving all the employees in the decision making process, the employees feel a part of the company and work to attain this level all the more. At IKEA all employees are involved in the decision that is taking place. Though it is not necessary that the suggestions by the employees will be decided upon, but at least the suggestions are considered which is important in motivating staff members. Participation can be defined as process where the employees of the company share a certain amount of decision-making power with their immediate supervisors. This kind of participation helps get the employee motivated and their productivity level increases as well as their poor morale. 2. Recognition of Effort: IKEA recognizes their employee’s efforts. Just like expectancy theory, all the efforts made by the employees are taken into consideration. The supervisor appreciates the efforts that are done by his or her subordinates. Recognition is considered one of the major motivators that motivate the employee towards a better job performance. The employees may get a promotion, a new title or a new perk added to their job when their efforts are recognized. 3. Communication: Lastly clear \communication is emphasized by IKEA in all areas of the business dealings. Coming clean with the employees and telling the truth about the situation builds trust and hence keeps the staff members motivated. With the help communication it becomes clear to the employees what is to be done and how well they are doing it and what can be done to improve it better still etc. Conclusion Motivation is a process that is divided into 3 elements and they are as follows intensity, direction and the persistence of effort of an individual or a group towards the achievement of a goal or an objective. But if it is viewed generally motivation is concerned with effort towards any goal and here we are talking about the attainment of an organizational goals and objectives. At IKEA, these values are brooded upon thus the three characteristics that affect the motivation of the employees are given i.e. harmony, attitude and expectancy. Because of the usage of the mix of motivational factors, IKEA have been able to excel in its field where many find difficult to survive. References 1. Robbins, S. P. (2000). Organizational Behavior. Prentice Hall 2. Fullmer, R.M. (1983). The New Management. New York: Macmillan Publishing Company 3. Employee Motivation, (2006). Available from 4. IKEA, Available from Retrieved on July 30, 2008 Read More