Any topic (writer's choice)

Instructions

First, Please read and respond to the IKEA case study. (one page)Second, start a new page to respond two of my classmate's posts(100 words per respond)1. (1) Firstly, I totally support the idea of living-wage formula as it not only help the employee but also help the employee increase his/her social status within the society as well. However, IKEA may have a hard time selling these idea to the businesses as they might not agree with the this idea as they will have to increase the minimum wage of their employees where there are 70/30 chances that they will do that willingly and they have, there may be chances that the employees does not take this generosity taken for granted and do not be motivated to work efficiently. In addition to that, there are chances that the employees in Pittsburgh, Ohio and West Chester might feel underpaid as compared to Woodbridge, Virginia and IKEA might have a short fall of employees in Pittsburgh, Ohio and West Chester and have excessive resumes flowing at the stores of Woodbridge, Virginia.(2) The only advice I would give IKEA to have a airtight policy on these formula so there is no doubt for any other employees and they should probably have the same wage payment for all the stores no matter where the store is.2. (1)What are some risks and challenges that IKEA is likely to face as a result of basing its minimum pay on the living-wage formula, rather than just legal requirements and the market rate?I think IKEA's minimum wage is based on the living wage formula, not just legal requirements and market prices. The risks and challenges Ikea faces are the risks of profit and the challenges faced by peers.Risk of profit: As mentioned in the article, "Rob Olson, IKEA's chief financial officer, indicated that the company does not intend to raise prices to make up for the added expense of higher wages. Rather, it hopes that because the company "invests in" its employees, they in turn will invest more of themselves in the stores and their customers." IKEA does not intend to increase the price of goods to compensate for the additional expenses brought about by rising wages. This will greatly reduce IKEA's profits. At the same time, employees in turn will invest more of themselves in the stores and their customers. When customers enjoy good services and goods, they will definitely linger, which will further reduce IKEA's profits. Finally, IKEA also said it would review wages every year. Although there is no promise to increase the tax rate whenever the calculator shows that the cost of living rises, IKEA still faces the need to monitor changes in the cost of living and wages in each area where IKEA employees are located. Will incurs time and labor costs.The second is the challenge from peers: The article mentioned that "Before the salary increase, IKEA has exceeded the federal minimum wage of $7.25. Compared to its competitors, IKEA is also very generous. Gap, whose stores include Banana Republic and Old Navy, announced it would phase in an increase to $9 in 2014 and then to $10 in 2015. And Walmart's Twitter account sent a tweet saying it's "average hourly wage for full and part-time associates is $11.81." This shows that competitors have already noticed IKEA also made a counterattack. At the same time, because of IKEA's generosity, many competitors have to substantially increase their wages to retain employees. This inevitably makes people worry that competitors will target IKEA's business for this reason.(2) Given that IKEA's management considers the living wage to be consistent with the company's mission, what advice would you give the company for implementing it successfully?First, I think IKEA should make some changes to its salary calculation, as described in the article: "In Pittsburgh and West Chester, Ohio, the minimum cost is only $8.69; At the other end of the spectrum, workers in Woodbridge, Virginia, earn $13.22 an hour."Wages in some places calculated by the MIT method are too low and too varied. This will affect the emotions of employees in some areas and will hurt the dignity of employees to a large extent.Second, I think IKEA should make good use of its current status as the "highest-paid employee in the industry", which can improve morale and reduce employee turnover. Although turnover is significantly lower, the company's recruitment costs are also falling. Similarly, the highest salaries in the IKEA industry will attract more qualified candidates who need less training time and are able to better perform their job duties. Wage increases offset other costs such as recruitment and training.Finally, I think IKEA should repair the relationship between peers to a certain extent and reduce the targeting of peers. Such as partnering with Walmart to help other companies follow in their footsteps.3.  (1)IKEA's minimum wage is not set according to legal requirements and market prices, but according to the local cost of living. Although this is a good thing for employees, IKEA may face multiple risks.It is mentioned in the article that IKEA sets the minimum wage standard in different regions according to the local living cost. It uses MIT Living Wage Calculator to set the wage for local staff by taking into account food, housing, taxes and transportation. For example, in Pittsburgh, West Chester and Ohio, the minimum wage is only 8.69$.But in Woodbridge, Virginia in the minimum wage is as high as $13.22, it is easy to lead to employees believe that when they are working for ikea and why different areas of the wage difference is so big, they might quit, even a lot of to work in some of the high cost of living city of ikea, lead to the low cost of living the ikea lack of labor force of the city.In addition, ikea has exceeded the federal regulation of $7.25 minimum wage, its rival, Gap and Walmart all promises that it will also enhance their minimum wage, thus it can be seen, although ikea to raise the minimum wage objectively brought benefits for workers, but it is likely to cause chaos in the labor market, companies have to raise the minimum wage to compete with ikea, however, those small company strength is much less than the big companies would not have enough money to raise wages, resulting in a small company can't attract labor.(2). First of all, IKEA sets different basic wages in different regions. Since the cost of living is objective and cannot be changed, IKEA can provide appropriate subsidies to employees in areas with low cost of living to prevent the loss of labor force, so that they can work safely in IKEA.Secondly, IKEA should reconsider whether it is necessary to set the basic salary at such a high level. After all, it is likely to cause vicious competition among peers and disrupt the order of the labor market.

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