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Human resource systems, policies and practices have great influence over an organizations culture. For that reason, the examination and diagnosis of HR policies are essential to any successful acquisition. During due diligence, a careful and thorough HR examination is prescribed. Workforce issues are a critical variable, but often ignored. As such, it is imperative that the existing HR policies of both companies be examined regarding issues such as grievances, peer mediation, telecommuting, flex-time, code of conducts and other important issues.
After the examination, a new set of HR policies must be devised to fit the needs of the newly formed company. The traditional grievance process for workplace disputes, are rarely the best means of dispute resolution. Company A has the traditional grievance process, which is expensive, disruptive and protracted. More significantly, by its very nature, it tends to drive the parties further apart weakening their relationship, often irreparably. Sadly, far too often the process completely ignores the real underlying problem. As a result, by the very nature of the grievance process, the minor disagreements and the stress inherent in the employment relationship escalates into a full-blown conflict, typically resulting in the termination of the employment relationship, years of litigation and tens of thousands of dollars in legal expenses.
Company B has the peer mediation process, which can result in emotional exhaustion especially where parties take a long time to come to a common understanding. The process can be laborious, and so it is a potentially slow process. Furthermore, critics say that the mediation process puts too great an emphasis on reaching a settlement, rather than on reaching a settlement that deals thoroughly with all the needs of all parties, both now and in the future. As you can see, neither policy is perfect, therefore, the best option is to integrate the two former company policies that will create tactical solutions that utilize cooperation, respect and a liking and/or an understanding for the newly formed company. The goal is to add a voluntary peer mediation component to the traditional employee grievance policy.
The new HR policy will encompass a mediation-based problem solving technique that creates effective solutions while improving the relationship between the parties. The process separates the person from the grievance; it explores all problems to define issues clearly; brainstorms possibilities and opportunities; and uses some mutually agreed upon standard to reach a solution. In closing, our combined policy plan focuses on mending the relationship between the parties by finding a compromise solution that meets the interests of both parties. This will increase employer � employee participation, which is very important after a merger or acquisition. Lastly, research suggests, that agreements achieved through mediation are more likely to last because the parties themselves play a major role in fashioning the agreement.
In addition to grievance and mediation policies, when merging two companies corporate policies it is best to do best of breed of the policies with regards to the new corporate culture. The policies on flextime and telecommuting need to match the new corporate culture. An overnight change will alienate all employees of both companies. The goal is to bring the policies into alignment with out disruption and strife.
The first step will be to analyze the policies and the effect they have had on the two companies. Since company B does not have the policies for flextime and telecommuting they are the control group. Gathering historical data on similar topics from both companies will give the comparison that is needed. Comparing productivity between the companies in similar departments will allow the decisions to be based on relevant data. Other data that must be included is some interviews with employees regarding the policies to get a good feel for how the employees will take to any changes.
Once the data has been gathered and analyzed any productivity gains can be seen. Both flextime and telecommuting are employee empowering items. Taking either away from the current employees that have them may mean that the company will lose some of the experienced staff that they already have. The only real possibility of removing either policy is if the current corporate culture does not allow for them and the productivity gains are not significant. If the gains are significant but are not in the corporate culture it will give the ammunition needed to up channel the change to upper management to change the culture for all.
Once the policies are decided on then a phased approach will be the best implantation plan. By considering there will be some give and take between the current policies, the best way to phase in the changes is to start by implementing the employee positive changes while integrating the negative changes in such away that the positive changes are highlighted. Either way there will be some upset employees and some level of discord; however, when properly handled the policies can increase productivity through tremendously. Employee empowerment normally increases employee satisfaction and a happy employee is more productive. As stated earlier, there will be some upset employees and some discord during a merger; therefore, the written code of conduct must be taken into account with the impending acquisition, as the code of conduct will set the new corporate culture. There are several recommended approaches as to how a manager can implement the code of conduct. The end goal is to enable the manager to control the corporate culture. The code of conduct outlines the company rules, mission and company creed and will take the newly formed company to the next level.
Forcing a new culture on our employees will have a devastating effect, unless management controls the process. Research has shown that one-half of all mergers fail due to not controlling the human aspect of the cultural change. Therefore, management must include the new and improved Human Resource policy and the new code of conduct into all the levels of management in order to make the change effective.
The former company’s codes must be compared and analyzed in order to understand their similarities and differences, decide how these similarities and differences are valued by the employees. This section of the report will deal with our findings from the two cultures and our method to implement the new code in our department.
Our present company has a clear and concise written code of conduct. All employees know what is expected of them and what to expect from others within the organization. We have been informed that the company acquiring us has no written code of conduct. This ambiguity in the new code of conduct is a source of great stress to our employees and this management team. Our research has shown that we need to understand the new cultural values and the effect it will have on our people, if we are to accomplish our performance goals.
In our research of this subject, an article by Robert J. Thomas, points out the need for “cultural due diligence” for assessing the cultural differences between our two companies. It is a process for “measuring the gap” between both tangible and intangible values of the codes of conduct. This process takes into account the “unwritten rules of behavior and views on human motivation.” It allows us to graph the out come on a grit to access a plan of action. As the new company does not have a written code, it will give the needed information allowing us to communicate the change to our people. Edmond Dossa-Sossavi in an article entitled Management in a Merger/ Acquisition Environment demonstrates that communication is the most important factor in controlling this issue. Further, in an article by AON Insights, entitled Protecting Your Workforce, stresses the need to “communicate the case for change from their perspective, not the corporations.” They further advise, to measure the results of the communications, and continue communications until the change is complete. In an article interview with Fred Hasson, President and CEO of Pharmacia Corporation, he states the need for top-down management buy in to the new culture for success. According to Mr. Hasson along with the need for strait forward communications, Management needs to be committed to the new cultural rules and behavior to show how it helps get good results. Mr. Hasson states “it’s important that supervisors internalize it before they’re asked to pass it down to the next level below them.” With this information in mind this management came up with the following recommendations for managing a planned change.
1. Have the HR department perform a Cultural Due Diligence assessment to identify the gaps between the two cultures.
. HR and Top management need to convey a procedure for management to internalize their personal code of conduct.
. This information can then be passed down to middle management to determine which persons can and can’t adapt to the new cultural code.
4. Management who accepts the change should be utilized as Change Agents and those who can’t, must be removed from the company.
a. For complete buy in, management needs to show the personnel, by example, that this change will cause favorable results.
5. Communications from upper management must filter down until the change is complete.
6. The HR department and management must refreeze the new culture and code of conduct in all future company dealings.
As stated earlier, in the midst of all the company changes and the employee’s negative perceptions or realities due to the merger, management has to keep the company moving forward. As a result, with any revamp of HR policies and/or implementing new policies after acquiring a company will cause some level of uncertainty, fear and conflict within the organization’s employees. However, these Human Resource responsibilities mentioned in this paper is only a small portion of the HR policies that exist in most companies and are vital to a company’s future. As mentioned in other papers, we would alleviate some of the stresses associated with company mergers and changes of HR policies by effective communication, which shows the company respects the employees, appreciates them and needs them in its efforts to move forward. One of management’s goals is to keep productivity up and find ways to keep the employees productive during the acquisition. The only way to accomplish this is by effective, timely, and honest communication.
Work Cited
Gary Dessler, Personnel/Human Resource Management, 5th, Englewood Cliffs, NJ Prentice Hall, 11.
Steven M. Marsh, Mediation Process, Mediation and Information Resource Center Webpage. Accessed June 14, 1.
Mary P. Rowe, Otions and Choice for Conflict Resolution in the Workplac
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