The single most important factor for post-merger success and long-term sustainability is the involvement and integration of employees from the start to create a common New Identity around a Shared Vision . Seven Ways To Keep Up Employee Morale During A Company Merger Posted on 19 August 2015 Companies merge because there will be an overall benefit to both companies if they join forces. The best way to minimize the impact of … There is a lot of talk of synergies, strengthening market share and excited forecasts; however in the rush to ‘get the deal’ done, scant attention is paid to engaging with key stakeholders and the post-merger integration of employees. It is important to ensure that employee morale is maintained as motivated … An AON Hewitt study on employee engagement during times of corporate change highlights employee engagement’s important role during the preparation stage. The importance of taking the human factor into account is gaining respect in the world of corporate mergers, because the negative impact of failing to address communication to stakeholders always results in a hefty cost – loss of key staff and the share price dropping as the joint venture efficiencies fail to materialise. The effects of mergers and acquisitions in the banking industry of Nigeria on employee morale can be significant if the reorganization of the business is not handled effectively. Complex visions and strategies can easily be articulated in compelling and dynamic ways that engender a sense of belonging and partnerships. Embedding the vision, identifying the cultural values, desired behaviour and ethos of the merged organisation needs to be a priority for every CEO. Employees from the two organizations may compete instead of working together. The study found out that mergers and acquisition had great impact on employee morale of insurance companies. Strategic Communications: Great Culture - How Do You Know? How often are families completely harmonious? This could be due to reduced cost of operation brought about by economies of scale. It is natural that employees are fearful about potential changes within an organisation, it is very challenging to keep morale high and employees engaged during that time; however organisations need to move staff engagement higher up the priority list if they truly want to realise the potential from a merger or acquisition. It is important for organizations and their managers and HR staff to recognize this and to provide opportunities for employees to get to know each other, to openly address concerns, and to work together toward the creation of a new culture that will merge the best of both worlds. Treat your employees how you'd like to be treated. Religion And policy Are consistently Implemented The above figure in cross tabulation indicates that, out of 54 Hindu respondents, 4 were dissatisfied, 25 were neutral, 24 were satisfied and 1 is strongly satisfied. The senior leadership team need to decide how things should be done and then set about making sure everyone is clear about their role and responsibility in doing them! Credit Bank. found out that the likelihood of employee morale after mergers and acquisitions being affected by employee’s sense of ownership and belongingness, work place environment and job satisfaction, and job security is very low. Live, breath and demonstrate the values – don’t laminate them and hope staff will eventually find them in the back of their handbook. The employees need to be motivated and well informed about their future within the company. You … Keep communication open. The need for the study arose from the prevalence of information in the branch that indicated low … Be transparent. Employee Morale. Being transparent and keeping employees informed can help to stop the rumour mill that will crush morale and productivity by creating negative distractions. The ubiquitous nature of layoffs and the changing perspective on employment may also play a role in how people respond to mergers and acquisitions that result in layoffs. To keep things ticking over smoothly, stay alert to grumblings of discontent and take action promptly when necessary. LEARN MORE: Also remember to gauge your workplace soon after the merger is complete, and live up to any actions your organization promises. A lot of organisations make the fundamental error of focusing on getting the structure in place and ignoring the emotional elements of culture and hope that it sorts itself out naturally. The steps for successful merger are applying various strategies discussed here to impact the merger effect as a blessing for the employee in order to boost the morale and confidence of the employee. How the corporate leadership focuses its energy, as well as the timing and vision that drive employee engagement, impacts post-merger effectiveness. During any merger or acquisition effort, there are at least two groups of employees involved, often coming from organizations with distinctly different cultures and styles. Otherwise, talented employees “are primed to be picked off by other firms” after a merger. The most common are that the senior leadership have not understood the importance of a unified and aspirational culture and therefore inadvertently are undermining the process by not being a role model to the desired behaviours; that the values have been decided by a ‘top-down’ approach and without the collaboration from employees; and finally the implementation is not taken seriously and hampered by lack of initiative and enthusiasm. Leigh Richards has been a writer since 1980. If they do, then it’s highly likely that the merger will be a successful one. Morale post-merger. ... or roll the old programs into the new is the most important step in retaining employees after a merger. The effects of mergers and acquisitions on employee morale can be significant if the reorganization of the business is not handled effectively. But, what happens when employees from the two companies come together? As these groups get to know each other there will inevitably be conflict and perceived or real losses on both sides, says Pophal. As part of that research, you need to take time to consider what skills, experience, and aptitudes are going to define your optimal employee after the merger. During mergers and acquisitions it is important for managers and HR professionals to be alert to signs of negative competition and to ensure that employees are being kept informed about impacts on their jobs and their futures with the company. This might include a change-management workshop or a discussion forum. Her work has been published in "Entrepreneur," "Complete Woman" and "Toastmaster," among many other trade and professional publications. Acknowledge employees’ feelings as some may feel a genuine sense of loss. The Effects of Merger and Acquisition on Employee Morale Employee morale can be significant if it is not recognized as significantly in business, and if it is not handled effectively. What Advantages Do Global Companies Gain by Deploying Multicultural Senior Management Teams? Astonishingly 50% of all M&A deals fail to realise the anticipated returns that were expected. The concept that two entities of separately trained staff, working in their own unique environment under different circumstances will automatically become a harmonious merged workforce is rather unrealistic. "Human Resource Essentials"; Lin Grensing-Pophal; 2010, The Effects of Organisational Mergers on Employees, How to Assess the Cultural Fit Between Organizations, Cultural Diversity Training in the Workplace. This field study is based on secondary data collection in which empirical research done on merger and acquisition activities and their effect or impact on an employee morale data includes to find out the significance of relation between merger and employee morale through the level of stress, managing uncertainty, anxiety of jobless, competitiveness and role conflict exists in the study of RBS Bank … There is a lot of talk of synergies, strengthening market share and excited forecasts; however in the rush to ‘get the deal’ done, scant attention is paid to engaging with key stakeholders and the post-merger integration of employees. Staying human during these times could be the difference between failure and success. Faced with the idea of being laid off, employees may feel all kinds of things: … But if you manage employees in a company that's merging with another, the merger is going to have real effects on those people and the people around them. Communication is critical during these times, says Linda Pophal, a communication consultant with Strategic Communications, LLC. Human capital assets are often overlooked during and after a merger. Ensuring resonance across the entire business and having collective brand advocates is essential to the success of the new entity and needs to be taken as seriously as all other elements of a merger to truly see the results that were originally envisaged. Our experience shows that organisations can face a number of challenges when trying to embed a new system of behavioural values following a merger. The steps for successful merger are applying various strategies discussed here to impact the merger effect as a blessing for the employee in order to boost the morale and confidence of the employee. Rarely do two organizations have the same culture. During the time of merger and acquisition 11. During mergers and acquisitions, change can be especially difficult and can lead to stress which can have a negative impact on morale if not handled effectively. Provide opportunities for employees to ask questions, raise concerns, and provide feedback about what is happening at work. © usp creative 2021 - e:hello@uspcreative.com  t:0151 227 1777. Some merger success metrics are easier to measure than others. The research found out that the likelihood of employee morale after mergers and acquisitions being affected by employee’s sense of ownership and belongingness, work place environment and job satisfaction, and job security is very low. The last but not the least question needs the answer is that the morale level of the employees of RBS Bank after getting acquired by Faysal Bank is getting high to work better or getting low by losing their brand loyalty and organization commitment merge with another and about what extent of ratio resign or fired from the bank or join the bank after merger activity. Demonstrate Respect. Employees with high morale typically feel happier, more engaged, and will try their best to help their company achieve its goals. The uncertainty resulting from a merger or acquisition can increase stress levels and signal risk to target company employees. One that can be tricky to quantify is employee morale. Studies focusing on the project planning and management aspect of mergers and acquisitions appear scanty especially in the commercial banks where employee performance is affected by the conflicts brought about by the difference in Change is often difficult for employees, especially if they were not directly involved in decisions that impact their jobs. The effects of mergers and acquisitions on employee morale can be significant if the reorganization of the business is not handled effectively. A substantial focus was placed on organizational announcements, for instance the top-level structure and leadership appointments—the areas that most concerned employees. It can never be eradicated completely, particularly when resistance is invariably found throughout both organisations from the top down. Empathy for employee needs breeds the help you need to manage change. Employees inevitably have many questions and concerns, and human resource professionals should be prepared to answer them. Yes, some turnover is to be expected in any company merger. Don’t attempt to hide problems or avoid conversations when morale is low. The amalgamation of two companies is always a significant event in corporate history, especially if at least one of them is big. Everyone should understand the journey the new company is on, what the key milestones are and crucially how they all fit into that. She has a Bachelor of Arts in psychology from the University of Wisconsin and a Master of Arts in organizational management from the University of Phoenix. As a business owner or manager, you'll want to face these challenges head on. Your employees might belong to … The main reason behind this merger was the need to enlarge branch network and balance sheet. Implementation through creativity means that values have a higher probability of being deeply ingrained, as their introduction was impactful, dynamic and therefore likely to leave a lasting impression. 11 there are mainly two groups of employees that are involved. The value of this research points to the fact that management of Sometimes shedding employees is even planned. There is both research as well as anecdotal evidence, of the psychological effects on employee’s wellbeing post a merger or acquisition; which often has a negative impact on behaviour resulting in counterproductive practices, low morale and absenteeism. Remember: a happy employee is a productive employee! Select employees on merit. The study set out to examine the effect of mergers and acquisitions on employee morale using First City Monument bank, Calabar main branch as a case study. Consider providing a process that allows employees to understand and express their emotions and move forward. Let's understand how do mergers and acquisitions affect employees, their behavior, productivity and performance in the new work environment. Managers play a crucial role in trying to beat the dismal odds. Most of the firms studied showed improved work environment and job satisfaction after merger or acquisition. Learning a new culture can be challenging, but is especially so when employees are faced with uncertainty about what the future may hold and whose job is on the chopping block. Employee morale may suffer as a result of merging two corporate cultures. While some competition is good, competition is not good when it creates tension and negative conflict in the organization. Acquisition and mergers invariably start out with enthusiasm. When two or more organizations come together, culture clash is inevitable. Unplanned, significant levels of turnover negatively impact a merger’s success. Employee morale is a mixture of feelings, emotions, attitudes and perceptions that employees hold towards their work and their professional environment. If more weight was needed to the argument, then significant studies show that there is a direct correlation between a culture of strong values and company performance. Merger communications is a conversation, not a series of orders. To the extent possible organizations should strive to share as much information about what is happening and, most importantly, how the changes will affect individual employees, as they possibly can. Employees may fear losing their jobs or losing opportunities that they formerly had. When two companies merge, there is an assumption that there are natural synergies in attitude and approach, a general presumption that culturally they will be compatible. Be sensitive to the time it may take for employees to accept change post merger. Communication is critical to continuing benefit plans successfully and sustaining employee morale. Effect Of Mergers And Acquisitions On Employee Morale (A Case Study Of First City Monument Bank Plc, Calabar) ABSTRACT. The first step is to maintain morale and employee engagement in the face of uncertainty. This fear can negatively impact productivity and may even result in employees leaving the company to seek jobs elsewhere. Transparency is always a best practice, but it is especially beneficial … The common theme for this failure is too much short term focus on the financial and legal aspects, and not enough emphasis on communication and securing the goodwill of staff across both companies. Organizational behavior is essential and important for a successful merger … There are many ways to improve morale in a company, and doing so is rarely more important than when managing staff in a recently acquired business. Strategic Planning for Middle Level Management, A Disadvantage to Organization Socialization, Company Cultures: Mergers and Acquisitions, Inc.: First the Merger, Then the Culture Clash. All research in this area suggests that open, timely and accurate communication will reduce employee’s anxiety and uncertainty. employee morale in the insurance sector in Kenya. But what happens once the legal team have left and the merger completed? Often it’s considered ‘job done’ but we know from our experience in helping companies with effective internal communications that employee engagement never does stop! While retaining employees after acquiring a company, it is important … In a recent merger, the communications team and the integration-management office (IMO) reviewed a checklist of all possible merger milestones and quickly identified the most relevant ones. When employees are concerned about their own job security they are more likely to become competitive with others and this competitiveness can result in conflict--sometimes even violence. Acquisition and mergers invariably start out with enthusiasm. Employee motivation may drop as frustration with new roles and new co-workers or management increases. Obviously, this list of criteria will vary by department and role, but if you take the time to break it down, there’s likely a solid foundation of traits that every successful employee in your new company will possess. After a merger, it’s important for employees to settle into their new roles (and the blended corporate culture) quickly. So it can be said that there is no significant effect of workplace environment on employees morale after Merger and Acquisition. There is so much confusion about what to follow. Of uncertainty and perceived or real losses on both sides, says Pophal maintain morale and productivity creating... 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