Roles of HR Management in a Merger, Acquisition

Introduction

A merger is a situation where two firms come together to form a single firm through a combination of their assets and liabilities. When a larger firm takes up a smaller one, this is commonly referred to as acquisition. On the other hand, the term merger is commonly used when two firms that are of the same size come together to form one firm. When two firms merge, there is hope that the operations will be better and performance will improve hence increasing the firm’s overall output.

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When this happens, the employees may be greatly affected by the changes and hence the need to define a system in which they will be helped to cope and adapt to a new working environment (Armstrong, 2003). The following essay paper describes the role of human resource management as a strategic partner in a merger/acquisition of a health care facility in terms of recruitment and retention, training and development, employee performance management, regulatory compliance and compensation and benefits.

Discussion

According to Armstrong (2003), as an individual entrusted with issues mostly relating to employees, a human resource manager has the task of ensuring that the affected employees do not walk out on their positions on hearing such news. It is apparent that when people in an organization learn about a merger or acquisition, they are surrounded with fear of losing their jobs hence may start looking for jobs in other places. If an organization is contemplating a merger, it is important that the human resource manager maintains a dialogue with employees concerning the issue, though he/she might not have the full information a hand.

The key personalities should be evaluated to ensure that their skills and capabilities are in line with the new firm. It is essential that he identifies the key roles and then get the right individuals to fill in those positions. A retention system should be set up to ensure that key talents are retained (Bramson, 2000). Lack of proper planning may lead to the loss of important people whole would be of great value to the organization’s future.

To ensure maximum growth of the firm, Bramson (2000) says that attractive compensation and benefits programs should be set up so that the desired employees are retained and others attracted to the new firm. The human resource manager should review the compensation plans in place by comparing them with other positions in the firms involved and also with the community expectations.

If the benefits offered are perceived as less as compared to a hose of other employers, the employees might be forced to leave in search of better positions. The key issue here is to keep the compensation and benefit as competitive as possible so that important personnel is not lost. However, it is important for the manager to realize that good pay is not the only benefit that will retain employees. There are several other non-monetary benefits that should be considered to attract and retain employees such as career development programs, retirement benefits, safety, and security.

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In the event when two businesses merge, there is the realization that it might be a difficult task to handle the functions of the newfound group and as such, the importance of outsourcing comes in (Armstrong, 2003). Sometimes merging the two HR departments may not be considered worthwhile hence the need to outsource for an individual to take over the position. Such a new position may involve activities such as recruitment and selection, performance management, and payroll. However, outsourcing should not be an immediate consideration for HR to avoid abandoning the main objective of the merger itself.

The work of integrating the merged business should be the role of HR to ensure that the business runs as usual. He/she should ensure that there is a clearly laid out plan on the new platforms, the personnel, and the technology adopted before deciding on whether they want some additional resource through outsourcing. Bramson (2000) says that most mergers and acquisitions today do not live to accomplish their intended purpose. Much as the HR department is entrusted with the huge and challenging task during this process, it is important that focus and proper preparations are made as well as desired technology applied so that not only the HR department that oversees a successful transition but the whole firm as well.

When the issue of merging or acquisition comes up, all the people in the organization, be it employees or managers are affected in one way or another. According to Bramson, (2000), the psychological trauma associated with such an event may be difficult to cope with. Although not all may be worried about the consequence of this on their positions in the firm, some may panic or feel threatened that their careers may be the way to extinguishment.

Those of the absorbed firm may feel like foreigners since they might encounter a whole new culture as well as new clients. Those who were in senior positions may develop bad feelings in case they find themselves in minor positions compared to those they held before. However, this only happens in a case where proper personal care on the employees is not taken. In this case, HR has the role of employee performance management as well as motivation.

He should determine ways on how the two cultures will be merged, how skills will be transferred and used effectively in the new firm. In determining who goes or who stays, skills are not the only essential thing that should be looked at. An individual’s personality and level of motivation are important as well. How one takes up the new culture may have an effect on his/her overall performance. Bramson (2000) insists that it is therefore important that employees at this stage are given a chance to discuss their career objectives and that they should be made aware of future options available to them.

Getting the HR function to work effectively is a matter of great concern. In the process of acquisition or merging, HR has to engage in data collection to avoid getting into contracts without sufficient information on the policies and plans of the other firm. He must have clear information on personnel matters, policies as well as employment conditions. He is expected to fill the necessary legal requirements, negotiate for new unions for the employees where necessary and ensure that the information that needs to be availed to the public regarding the new acquisition is done at the right time. He should also do away with the unneeded positions, unproductive individuals, and inessential facilities to realize short-term profit (Armstrong, 2003).

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Conclusion

In conclusion, the HR function is a paramount one when it comes to acquiring a firm or merging the already existing ones. It is important that care must be taken to avoid losing valuable personnel who could be of great importance in the future. Prior plans must be made on how new employees will be acquired as well as how to retain the current ones without any favoritism. In the event of adopting new technology, the employees should be given training so that they can be conversant with it. How the HR plans for all this will determine the success or failure of a merger.

Reference list

Armstrong, M. (2003). A handbook of human resource management practice. (9th Ed.). Kogan Page Publishers.

Bramson, R. (2000). HR’S Role in Mergers and Acquisitions – human resource management. Business publications. Web.

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Paperroni. 2022. "Roles of HR Management in a Merger, Acquisition." June 6, 2022. https://paperroni.com/roles-of-hr-management-in-a-merger-acquisition/.

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Paperroni. (2022) 'Roles of HR Management in a Merger, Acquisition'. 6 June.

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