31 motivation ikea promotes motivation through its

3.1 Motivation
IKEA promotes motivation through its training and development programs. All the
employees at IKEA not only have access to training programs but also to leadership training, so
that they are able to develop themselves.
4.0 Performance Management
The purpose of performance management strategy is to provide means so that better
outcomes can be obtained from individuals, teams and the organization and this is done through
performance management and understanding of the framework of standards, competence
requirements and planned goals.
4.1.1 Expectancy Theory
Expectancy theory is one of the most famous theories of motivation. Expectancy is a
relationship that exists between an employee’s effort and his/her performance. There are two
concepts to this theory; whether the application of effort in regards to a task would lead to high
performance or the success of the performance by the employee leads to the desired end result or
not.
IKEA is very particular about its work activities, for example, selling furniture, therefore
it expects its co-workers will work extremely hard so that they are able to achieve their
objectives in time (that has been stated by the company). If the co-workers are able to

Management 9
accomplish the goals then they receive rewards in the form of cash or discounts on the
company’s products. Thus this motivates the employees to perform their best and take on more
challenges.
Employees want to be rewarded for doing their job well, so it falls on the management to
reward the employees who have performed extremely well. For example, IKEA once produced a
special bonus for its employees by pledging an entire day’s sales revenue to its employees. That
day the sales were doubled, and each employee received $2400 as the reward. (Mathis &
Jackson, 2008)
4.1.2 Key Performance Indicator (KPI) with Balanced Scorecard Perspectives
KPI is one of the metrics that drives performance management. KPI helps the company
by letting it know that the performance indicators within IKEA have been success or not. And
even if they are not achieving the objectives, it will help the company to move forward.
Perspectives Outcome measures Performance drivers
Financial  Increase in customers so that sales
can increase
 Cost Consciousness
 Increase in total revenue
 Profit Margin
 Earnings per share
 Customer satisfaction
 Sales percentage
Internal business
process
 Co-workers commitment to
Tesco
 Quality control
 Co-workers participation
 Open door policy
 Motivation
 Empowerment
 Communicate with the co-
workers with the needs and objectives
of the company.
Customer  Quality products
 Customer satisfaction and
retention
 Friendly service
 Needs and wants of the
customers are identified
 Increase in sales
 Company’s reputation for
selling excellent products
Learning and
growth
 Performance appraisal
 Training and developing
 Feedback from customers and
co-workers

Management 10
programs
 Turing into a learning