The Performance Management System of IKEA


Companies are always trying to better assess and measure the performance of their employees. The purpose of performance management is to improve the performance of a company via stimuli. It is also in line with the broader company objectives and tasks, employees, and individual objectives. Organizations initially depended on yearly performance assessments based on paper. However, the paper-based approach was cumbersome, unpleasant, and biased. Organizations have taken technology to resolve their flagrant inefficiencies – shifted to instruments for performance management. The management tools enabled businesses to move to regular and frequent feedback from broken yearly evaluations of their performance. Technology is still influencing the way work is done (Ashdown, 2018, 1). However, picking the correct software for performance management is a struggle alone. The only thing that makes businesses want to go back to the conventional evaluation method is to think of flailing in obscurity with an unknown, complicated program.

A system of performance management is a method for the constant and measurable monitoring of job satisfaction. It enables the firm to guarantee that staff and departments within the organization operate efficiently to achieve the strategic objectives of the business. Workers still have objectives, but like other businesses, short-term objectives (Cappelli and Tavis, 2016, 13). Successful organizations benefit from the greater alignment of workers with company objectives. Performance management tools accelerate the process of performance management and allow businesses to conduct regular and fair evaluations. Most businesses are moving away from contemporary performance management software from time-consumption manual solutions. To meet the increasing needs of staff, modern performance management systems attach more significance to learning and development. Most tools for performance management have many components.

Performance Management Systems’ Features

Previous results enable managers and staff to evaluate successes and achievements and contextualize present performance. It also indicates how they have achieved their role patterns and set goals for the year. An excellent performance management solution comprises 360-degree feedback on the performance of an employee. Feedback from 360-degree is a way to generate positive and critical comments on job performance as part of a more extensive evaluation process. The traditional approach depends on the worker’s manager’s input. This technique nonetheless collects several inputs from several sources, namely workers, external clients, direct line managers, and employees, if necessary. This information can be collected in several methods, including in word form, via paper or email form, or by an electronic device.

The fundamental objective of establishing a 360-grade feedback mechanism is to let workers, instead of their direct line managers, get relevant and constructive feedback from more than one source. It can be beneficial. Depending on the function of your employee, you can work directly with a teammate or even a client outside of the company and receive organized feedback. Therefore, the feedback from 360 degrees gives the employee a far more comprehensive, relevant, and particular assessment of their effectiveness in the fields by collecting their thoughts and ideas. The Development Plans are part of an employee performance management system that enables managers and workers to specify expectations about what they will work for and attain in the future and collect information on future possible training needs, promotional chances, or other developmental issues.


The mission of IKEA “to improve the daily living of many people” is represented in their excellent quality, good design, and valuable goods at accessible costs and a wide variety of services. This philosophy is integrated into all of their activities in a cost-conscious and environmentally friendly manner. Using flat and ready-packed items and using a product community reduces transport, inventory, and production expenses. However, their cost-conscious attitude is confined to that element and encourages management and employees to be economical. This work was written to study the performance management system of IKEA.

It all starts with top management, and the founding Ingvar Kamprad, a leader, who sleeps in cheap hotels and travels in the business class. This attitude spreads to all employees across the pyramid of the organization. IKEA includes a cost reduction strategy and adds value via innovation and creativity to its supply chain, while, on the other, it invites clients to become involved and part of IKEA’s family. IKEA is embarking on a journey to exploit its distinctive corporate culture and business style to promote company efficiency. To this end, they had to provide their managers with the coaching abilities of performance management to complement their present management style and extend their management and leadership competencies portfolio.

Description of Company

As the world’s leading retailer of furniture, IKEA is a worldwide corporation that is inventing solutions that impact millions’ lives and the future. IKEA Group, usually known as IKEA, is Scandinavian furniture and global accessory retailer based in Delft, Netherlands (Panahi, 2016). IKEA’s culture and principles represent its founder Ingvar Kamprad’s entrepreneurial drive and are vital to his international success. The eight central values of IKEA are cohesion, human and planet-friendly care, cost awareness, simplification, renewal and enhancement, the difference in meaning, responsibility, and inspiration.

By enhancing leadership and management capabilities, IKEA sought to increase corporate success. They required a training course for performance management that would incorporate an IKEA-based Coaching Culture and enhance the previously poor utilization and efficiency of their internal management and leadership development courses.

The Objective of Performance Management

Performance management is a method used by management to assess job performance by defining the roles and responsibilities within the business, as well as their achievement. Effective management is prevalent in public organizations; many governments have introduced performance management systems to improve corporate efficiency (Gerrish, 2016, 48). For the administration of topics, it is indispensable to monitor staff positions to achieve it match the companies’ needs. Companies must understand the success of their PMS to achieve extraordinary employee results (Sharma et al., 2016). In the framework of IKEA, the management employs a variety of approaches for the monitoring and management of employee performance in future terms.

The manager produces principally in this checklist and weighted checklist technique a list of assertions of every behavior. It allows the management to portray the employees’ poor or excellent conduct in the workplace. This technique would assist IKEA in reducing the performance bias and offer a framework for discussion of performance. Goal administration would assist management in identifying the goals and communicating them amongst employees. IKEA’s administration might establish the exact time limit for the employees who have to fulfill it. The administration monitors the productivity of workers and talks with employees about their performance primarily.

The fundamental objective of performance management is to enable companies like IKEA to continue to compete. The organization must thus measure its workers’ productivity. IKEA has several ways to assess its workers’ effectiveness. Nevertheless, the most frequent approach used by the organization is the assessment system. Performance reviews and assessments one method companies might obtain information on the results of employees is a thorough assessment. The assessment may be active or passive. If the assessment is open, the evaluator can participate actively in the evaluation process and debate the outcomes. The report stays secret if the assessment is closed. The assessment examines what the work of an employee is, how well it is done, and what measures must be taken in the future.

The assessment consists of several phases. Development of the assessment system Companies like IKEA must decide on the aim of the evaluation method. The organization should discover areas in which the individual may become more efficient and ultimately establish development objectives. The organization should establish an acceptable strategy for achieving the objectives: inspection, conversation, and performance check figures. The organization needs to decide who will be the evaluator.

Human Resources

Human resources are the main assets of an organization that must be adequately and efficiently managed to enable it to achieve its desired organizational objectives. Human resources management is a vast area that encompasses several issues especially connected to human resources and organization. It is simply a technique that helps a company, in particular, to improve human resources by carrying out different activities such as planning, recruiting, selecting, training, and developing.

Guest’s Model of Human Resources Management as Applied to IKEA

David Guest has chiefly outlined the Human Resources Management’s (HRM) Guest model, which comprises six aspects of the assessment, such as HRM results, strategies, behavioral results, performance results, and financial results. This particular approach enables the company to properly recognize the distinctions between the management of human resources and personal management. The approach typically works towards identifying the talents and competencies of employees and making managers aware of the need to improve employees’ skills and knowledge and improve their performance. Concerning IKEA’s functions, it became apparent that this model was used by the organization to acquire employee loyalty and confidence in the company.

The approach is also used to carry out intelligence gathering to achieve the required levels of goals. The approach makes it possible for IKEA to ensure the optimal usage of the organization’s assets and to recover better profits. Furthermore, the guest model also shows the good relationships between the management and employees at work. IKEA has recognized that by applying the model in its functions, IKEA may draw greater revenue levels and also improve staff communication skills and enable them to successfully transmit information on the job. The guest model would help manage IKEA and contribute to an extensive range of commercial activities inside the corporate structure.

Implications of Line Manager

Line managers are essentially those with direct management responsibility for specific staff or individuals. In the development of plans, the IKEA management staff has been shown to play a crucial role in supporting workers in the event of challenges. The manager is primarily responsible for evaluating strategy and planning and then informs the upper management of the company immediately of any difficulties identified. It is most likely to identify the breakdowns or the advantages or disadvantages of the strategy before implementation to prevent any disadvantages. The line manager even has to monitor and enhance the performance of the workforce if the levels are not met through appropriate training courses. The line manager of IKEA monitors and keeps employees informed of their progress thus that they may improve their performance and schedule appropriate training as needed. When necessary. Moreover, the IKEA line manager also contributes to implementing the plans developed by senior management and contributes to the resolution of workplace problems.

Model of Flexibility

Safety in the workplace consists of several rules and procedures developed according to the particular demands of the employee and the company. In the present day, flexibility in working patterns has been an essential issue for the company as it is essential to make employees more privileged and more satisfied with their employment. IKEA can measure the HRM operations and recognize the growth requirements of the company through its flexibility model. To achieve more excellent performance and productivity in the company, IKEA management has found it feasible to give staff members positive flexibility patterns in the workplace.

IKEA has adopted a functional model for determining the workers’ operational talents and assigning the positions accordingly. The concept essentially means that the employees need enough training and incentive to do their best for organizational purposes. IKEA provides the necessary skills and practical pleasure for the workers. Financial resources in any company are regarded as the essential component and are employed precisely to meet the organization’s demands. The financial flexibility model has been introduced primarily to motivate and enable workers to perform more effectively and be more interested in the business. Therefore, this flexibility model was used by IKEA by generating financial results and ensuring that the workers were more satisfied with their jobs and motivated to perform their best. The financial flexibility model would thus enable IKEA to reduce the staff turnover rate and maintain it at work for longer durations.

Types of Flexibility that May Be Developed

With growing pressure or responsibilities in the workplace, the balance of working lives of individuals has become increasingly essential so that people live a better life. Flexibility might be called in everyday language convenience or freedom to alter any action following changing conditions. There are several forms of flexibility that the company may create in connection with the IKEA workspace.

Employment splitting is a sort of flexible approach which is now most popular in the day, as workers are made more able to share their full-time employment following their working hours and other employees with formal permission for equal times in particular. A part-time job is another kind that the applicants chose. IKEA enables its workers to work part-time and under less than work hours guidelines. It is mainly because the workers are not fully available for any conditions in the company.

Swap shifts are also an excellent kind of adaptability employed for its employees by the administration of IKEA. The personnel has the freedom to make the transfers easy and to handle the work with the administration. However, IKEA management ensures that all the transitions are met and taken over by its employees and that they do not affect their productivity. In addition, IKEA may make use of this flexibility kinds to successfully develop good work patterns and make the best abilities of workers.

Impact of Issues on the Human Resource

Different problems impact HR procedures in IKEA. These problems influence operational and non-operational procedures. The staff of IKEA concentrates continually on minimizing the effect of such difficulties. Many problems have also been created after so many attempts and have had an impact on the system. Technology developments and adjustments impact IKEA’s HR approach. The manager should update his staff correctly, adding new technical tools every day. Technological tools are utilized for environmental design, development, and monitoring. The company should alter and maintain the system up to date by giving the HR department suitable training processes.

Workforce shortages directly affect IKEA. Because there is no man’s power supply, it becomes a difficult job. This predicament develops because of a lack of competent workers on the market. It would harm IKEA’s furniture production. To make good furniture, highly trained personnel are always required. The HR Manager sometimes employs more skilled workers to teach existing employees. Sometimes furniture demand is reduced because of a recession or any other reason. The power of the man is, therefore, a burden or an excess for the company. It happens if the organization, which affects HR practice, recruits people more than necessary.


Companies attempt to better evaluate and quantify their workers’ performance. The objective of performance management is to stimulate a company’s performance. It also corresponds to the company’s broader goals and duties, staff, and individual goals. Initially, organizations depended on annual paper-based performance reviews. However, it was a laborious, disagreeable and prejudicial paper method. Organizations have adopted technology to address their blatant inefficiencies – switched to performance management instruments. The management tools let companies receive regular and frequent feedback from broken annual performance assessments.

A system for managing performance is a means of measuring work satisfaction continuously and measurably. It allows the company to ensure that its employees and divisions function effectively for the company’s strategic goals. The better alignment of employees with business objectives benefits successful businesses. Performance management technologies speed up the performance management process and make regular and fair assessments possible for organizations. Most companies move away from today’s software to manual methods for time consumption. Modern performance management systems add more importance to learning and development to satisfy the rising requirements of employees. Various components are available in many performance management solutions.

The manager mainly provides a list of statements of all behaviors in this checklist and checklist technique. It enables the management to show the bad or excellent working performance of the personnel. This method would help IKEA to reduce the performance gap and provide a performance discussion framework. Goal management would help managers to set objectives and communicate them among staff. The management of IKEA may choose the exact deadline for its workers. Management oversees workers’ output and mainly discusses their performance with staff. Performance management’s main aim is to continue competing with firms like IKEA. Thus, the company must measure the productivity of its staff. IKEA has many techniques to evaluate the effectiveness of its staff. However, the evaluation system is the most common technique employed by the business.

The report found that by applying this model in its functionality, IKEA could draw greater revenue levels and also increase the communication skills of its employees and ensure that information is efficiently shared within the workplace. The study Even it has been recognized that IKEA line managers play a significant role in the development of strategies and in helping workers in the event of problems. The research showed that, for IKEA line managers to introduce improvements and plan required training courses, they monitor staff and keep them up to speed on performance levels.


Ashdown, L. (2018). Performance Management: A practical introduction. Kogan Page Publishers.

Cappelli, P., & Tavis, A. (2016). The performance management revolution. Harvard Business Review, 94(10), 1-24.

Gerrish, E. (2016). The impact of performance management on performance in public organizations: A meta‐analysis. Public Administration Review, 76(1), 48-66.

Panahi, O. P. (2016). IKEA Group on the international stage. Asia Pacific University of Technology and Innovation.

Sharma, N. P., Sharma, T., & Agarwal, M. N. (2016). Measuring employee perception of performance management system effectiveness: Conceptualization and scale development. Employee Relations.

Cite this paper

Select style


BusinessEssay. (2023, January 19). The Performance Management System of IKEA. Retrieved from


BusinessEssay. (2023, January 19). The Performance Management System of IKEA.

Work Cited

"The Performance Management System of IKEA." BusinessEssay, 19 Jan. 2023,


BusinessEssay. (2023) 'The Performance Management System of IKEA'. 19 January.


BusinessEssay. 2023. "The Performance Management System of IKEA." January 19, 2023.

1. BusinessEssay. "The Performance Management System of IKEA." January 19, 2023.


BusinessEssay. "The Performance Management System of IKEA." January 19, 2023.