There has been an unprecedented growth in the number of mergers and acquisitions that took place (or were

announced) in last calendar year. The total number of M&A deals announced during the year 2007 rose up to with a total announced value of $51.17 billion as compared to 2006 in which only 480 such deals took place. Sectors like steel, telecom and aviation witnessed amalgamation of big brands and thus, were clear leaders in sectoral values. With such a whooping number of M&As taking place every year, some concerns of employe also rise apparently. This is because HR issues are the most neglected issues as financial considerations a given more importance.

When a merger is announced, employees of the company become worried about issues like job security, role conflicts, interpersonal conflicts, cultural adaptations, etc. Such factors hold the power to make or break the d It is believed that most of the overseas mergers fail because of people centric issues as the management fails t deal with them aptly. It becomes the responsibility of HR personnel of the organization to take care of such is before and after the amalgamations takes place.

Prevalent HR concerns The success of M&A always depends on the how well the HR issues are managed after the merger takes plac There are also some major human resource concerns that need to be dealt with before the merger actually tak place. HR issues that form greatest challenge to the success of a M&A deal include the following:

Dovetailing employees: The uncertainties of M&As shift the focus of employees from productive wo issues related to interpersonal conflicts, layoffs, career growth with the acquirer company, compensation, etc Moreover, employees are concerned with how well they will go with new colleagues. The mergers involve downsizing, hence the first thing that comes to the minds of employees is related to their job security. Merge also lead to changes in the well defined career paths of employees, as defined by the acquired company. Due these reasons, employees find themselves in a completely different situation with changes in job profiles and work teams. This may have a negative impact on the performance of the employees.

Cultural Integration: An organization's culture defines its managerial style, structure and organizational practices. Each company has its own set of values which may conflict with those of the acquired company. T employees may not be able to accommodate themselves in a new culture and thus may lead to cultural shock Inability to adapt to a new culture increases stress levels among employees and results in low job performanc The need therefore is to follow a structured approach in dealing with cultural differences.

Employee communication: Whenever there is news of any merger in an organization, anxiety prevails amo the employees. This atmosphere of apprehensions lead to company wide rumors. The employees lose faith in their organization and tend to become demotivated. To free employees from such fears, proper communicatio has to take place between the management and the employees. The management should instill a sense of sec among them. Attrition: Most mergers bring with them downsizing, reallocation of work, change in work pro changes in career paths, etc. Moreover apprehensions about the new company also create anxiety among employees. If they fail to adopt to the new culture they face high levels of stress and thus end up leaving the organization.

Differences in organizational structures: Another problem is the difference between the organizational structures of the companies. Since the organizational structures are different, differences in compensation packages, and designations can take place. The company has to maintain employees at equal levels. Unable t so, employees can feel dissatisfied.

Role of HR in making M&A successful The success of a merger and acquisition depends on how well an organization deals with issues related to its people and cultural integration. The HR department of an organization act as a strategic partner. So formulati strategies while ignoring the employees can be critical for the organization. The role of HR becomes strategic when it takes decisions about what kind of people, capability and commitment the company would want after deal. To efficiently handle this phase many companies undertake feasibility studies based on which it decides

what part of the workforce is to be retained. The HR can help the employee in the following ways:

HR helps in managing interpersonal conflicts and makes employees better team players. It also helps them in dealing with cultural differences. Clear communication content and channels are customized to address cultur differences.

HR also deals effectively with the integration issue. Effective employee communication acts as a key here. Questions about job security, relocation, changes in benefit programmes and new reporting relationships are answered by the HR only. Keeping a check on rumors, anxiety, resentment and the loss of top talent, has also be dealt with.

The M&A phase is very sensitive for employees as they feel insecure about their future in the transitional tim HR in such a situation makes people retain their faith in the organization. The HR has to retain the confidenc employees and assure them job security.

A merger between organizations can create a difficult work environment for employees, with job redundancy and futures in question. Post-merger, the human resources (HR) department fills a critical role in managing change and implementing new mandates in the least disruptive and most constructive ways possible. Keeping employees needs in mind is HR's job in a post-merger organization and something that can mean the difference between a successful and an unsuccessful merger. ============================================ Pre-merger Concerns As a company considers merger prospects, human resources compares the strengths and weaknesses of both work forces, analyzes organization structure, gauges management capabilities, reviews compensation-related factors such as labor contracts, benefit packages and salary policies, and determines cultural compatibility. This "soft due diligence" identifies inappropriate candidates. Culture Cultural integration becomes an HR priority once an agreement has been reached. Corporate culture includes how decisions are made and communicated, interpretation of quality, value of teamwork, tendencies in short- and long-term thinking, career paths, work-life balance philosophy, management style, dress guidelines, customer orientation and performance expectations. Human resources maintains awareness of cultural sensitivity and addresses cultural issues in the restructuring phase of M&As and monitors progress after the deal is finalized. Retention Strategies Retention of talent on all levels, vital to achieve the goals and competitive position targets behind the merger decision, lies with HR. Contract wording, pay scales and bonuses take on added significance in a merger environment. Leadership Selection Critical issues faced by HR include the appointment of an integration manager to oversee the various integration teams and selection of the individual who will run the new organization. Communication Tailoring employee communication throughout the merger influences success. Monitoring the attitudes and perspectives of the staff may require adjustments in communication tactics. Such "employee sensing" provides management with a reading on employee sentiments that diminish productivity and could lead to turnover. The frequency, content and timing of ongoing, open communication to personnel before, during and after any reduction in staff requires HR attention due to the high stakes involved. Outplacement HR has the burden of identifying positions that must be eliminated and prepares procedures, guidelines, documentation, time lines and communication related to the cutbacks. The company relies on HR to conduct terminations correctly to limit litigation risk. HR also selects an outplacement service to support the individuals affected. Employee Support David S. Greenspan, a senior professional in human resources, advises HR management not to ignore the issue of employee training. "Helping ensure that knowledge and learning are shared across units are HR policies and practices that appraise and reward employee sharing, flexibility, development and long-term orientation."

===================================== DURING AND POST MERGER Personal Impact If a merger involves even the possibility of layoffs, staff members will be on edge before and after the layoffs are announced. Layoffs not only affect those who lose their employment but also affect the staff members who must take on additional work tasks as a result. Business consultant Joan Lloyd, in advice to HR specialists, says, "[staff] are worried about their jobs---even though they may have been told nothing will change. They are concerned that the Big Fish is going to devour them, so they will be cautious about what they tell you" . Those who must relocate to a different work location will obviously be affected. If family members relocate with them, then children may need to attend new schools and spouses may need to find new employment. In the cold, hard world of modern business, maintaining productivity and profitability are the main priorities; personal factors are often ignored, and personal issues that often arise during a merger can contribute to a tense work environment. Two Corporate Cultures A merger is a marriage between two companies, not only in terms of liabilities and assets, but in terms of combining corporate cultures. "History has taught us that failing to do a due diligence assessment of cultural fit can bog down---and even derail---mergers when people issues are ignored," "For example, if the cultures are very different, you will need to allow more time to build trust and introduce any changes" . Human resource officers often play the middle in a merger. They secure confidential information from upper management regarding corporate goals and expected personnel shifts related to the merger, but they are often the peacemakers as well as the contact people for staff members to ask questions or address concerns. Human resources staff should establish a good rapport with both upper management and other staff members from both companies. When communicating with staff, HR representatives should be careful in word choice so as not to be condescending or challenging, and should be completely honest with them. They shouldn't make promises that can't be kept. In addition, staff should always know what is expected of them. New Business Processes After a merger, new business processes will likely be a combination of both companys' business practices. Joan Lloyd recommends establishing easy and straightforward business practices first. HR reps should work with staff to handle each change step by step, and there should be an acknowledgment that changes take time to implement. The ultimate goal following a merger should be to establish synergy between the companies, within the given parameters . Redundancy One of the most difficult issues facing HR post-merger is job and employee redundancy. The two companies that have now become one most likely had their own management team and sales, accounting and even HR departments. This means that some cuts will have to be made. HRs first role is working with the new management to evaluate the new organizations needs in jobs and talent. Once a transition plan has been decided upon, it is up to HR to implement it. That means informing employees who will be losing their jobs, and arranging for and facilitating outplacement and counseling services for employees who will be leaving. For those who will be staying, it is HRs job to ensure that employees understand the reasoning behind decisions and have clear and immediate guidance on their new roles and responsibilities. Minimizing employees' uncertainly is the best way to ensure a return to productivity. Salaries and Benefits Employees might have been compensated differently by the two companies and these differences must be quickly reconciled. Once decisions have been made about who will stay with the new organization, HR must establish new salary guidelines and implement a new benefits structure. It is up to HR to decide whether to maintain the salaries and benefits of one or the other of the organizations or to develop an entirely new approach.

Culture and Communication A critical and often over-looked post-merger issue is combining the cultures of two different organizations. For the new organization to become successful in its own right, an atmosphere of cooperation, camaraderie and optimism must be developed to overcome the fear and confusion that was likely the norm during the merger process. Communication is critical post-merger and HR must consider the communication styles of the two organizations when crafting announcements. HR departments may use team building and feedback sessions to help with staff integration and to build trust in new working relationships. Layoffs and Downsizing One of the main HR issues in mergers is how many employees will be affected and what time lines will be involved. In some situations, the downsizing (the decision to let personnel go to improve efficiency) is dramatic and the number of layoffs (the termination of employees or elimination of positions) can be high. Employees are tense, as losing their jobs affects their ability to provide food and shelter for their families. Planning a fair method of implementing a layoff process can be challenging as the dominant company (the new company that bought or absorbed the present one) may be in charge of the decisions. This requires HR employees to remain businesslike and professional in their dealings with both companies. This issue calls for good communication and discouragement of rumors to alleviate the concerns of remaining employees. Assimilation of New Employees Another HR issue in a merger is the assimilation of new employees. Employees coming into the acquired company may be a source of tension and stress for the present employees. Careful planning is required to introduce the employees and facilitate teamwork. HR-planned activities (picnics, off-site meetings, ball games, bowling evenings) involving all employees may be helpful to allow for introductions and socializing. Preparing for Change Preparing for change can be a major HR issue in a merger. Some people may not like change and will resist any change actions. HR professionals can be helpful by preparing written communications, holding department meetings, and placing suggestion boxes (for employee ideas) in various areas. Preparing all employees for the planned changes within the company and discussing how the changes will affect them can enhance a successful transition.
A merger between organizations can create a difficult work environment for employees, with job redundancy and futures in question. Post-merger, the human resources (HR) department fills a critical role in managing change and implementing new mandates in the least disruptive and most constructive ways possible. Keeping employees needs in mind is HR's job in a post-merger organization and something that can mean the difference between a successful and an unsuccessful merger.

Redundancy

One of the most difficult issues facing HR post-merger is job and employee redundancy. The two companies that have now become one most likely had their own management team and sales, accounting and even HR departments. This means that some cuts will have to be made. HRs first role is working with the new management to evaluate the new organizations needs in jobs and talent. Once a transition plan has been decided upon, it is up to HR to implement it. That means informing employees who will be losing their jobs, and arranging for and facilitating outplacement and counseling services for employees who will be leaving. For those who will be staying, it is HRs job to ensure that employees understand the reasoning behind decisions and have clear and immediate guidance on their new roles and responsibilities. Minimizing employees' uncertainly is the best way to ensure a return to productivity.

Salaries and Benefits

Employees might have been compensated differently by the two companies and these differences must be quickly reconciled. Once decisions have been made about who will stay with the new organization, HR must establish new salary guidelines and implement a new benefits structure. It is up to HR to decide whether to maintain the salaries and benefits of one or the other of the organizations or to develop an entirely new approach. A critical and often over-looked post-merger issue is combining the cultures of two different organizations. For the new organization to become successful in its own right, an atmosphere of cooperation, camaraderie and optimism must be developed to overcome the fear and confusion that was likely the norm during the merger process. Communication is critical post-merger and HR must consider the communication styles of the two organizations when crafting announcements.

Culture and Communication

HR departments may use team building and feedback sessions to help with staff integration and to build trust in new working relationships

Mergers may require a dramatic cultural change. When one organization purchases or absorbs another, it can affect the core of the acquired organization. Financial, human capital (employees) and material assets may be scrutinized. Employees at all levels may become insecure about continued employment, demotions or decreased salaries. Human Resources (the department that handles employee and personnel issues) may play a major role in mergers, and careful planning for a successful transition is necessary for success.

Layoffs and Downsizing

One of the main HR issues in mergers is how many employees will be affected and what time lines will be involved. In some situations, the downsizing (the decision to let personnel go to improve efficiency) is dramatic and the number of layoffs (the termination of employees or elimination of positions) can be high. Employees are tense, as losing their jobs affects their ability to provide food and shelter for their families. Planning a fair method of implementing a layoff process can be challenging as the dominant company (the new company that bought or absorbed the present one) may be in charge of the decisions. This requires HR employees to remain businesslike and professional in their dealings with both companies. This issue calls for good communication and discouragement of rumors to alleviate the concerns of remaining employees. Another HR issue in a merger is the assimilation of new employees. Employees coming into the acquired company may be a source of tension and stress for the present employees. Careful planning is required to introduce the employees and facilitate teamwork. HR-planned activities (picnics, off-site meetings, ballgames, bowling evenings) involving all employees may be helpful to allow for introductions and socializing.

Assimilation of New Employees

Preparing for Change

Preparing for change can be a major HR issue in a merger. Some people may not like change and will resist any change actions. HR professionals can be helpful by preparing written communications, holding department meetings, and placing suggestion boxes (for employee ideas) in various areas. Preparing all employees for the planned changes within the company and discussing how the changes will affect them can enhance a successful transition.

The other HR Issues in M&A are:Besides seniority & compensation.. The insecurity of employees availablity & selecting or retaining, identifying the existing talent Retrenchment merging the cultural issues.. dealing with union of workers dealing with political issues building team of both the entities... Creating synergy.. Corporate structures.. understanding the technologgy.. Legal issues involved in contracts or employment.. Financial implications.. Linking the changes to desired goals..

THE ROLE OF HR IN MERGERS AND ACQUISITIONS

Mergers present opportunities and hazards for both the company and the HR manager. A KPMG study showed that 83% of mergers and acquisitions failed to produce any benefits and over half actually ended up reducing the value of the companies involved. Although the merging entities give a great deal of importance to financial matters and the outcomes, HR issues are the most neglected ones. Ironically studies show that most of the mergers fail to bring out the desired outcomes due to people related issues. The uncertainty brought out by poorly managed HR issues in mergers and acquisitions have been the major reason for these failures. The HR manager, on the other hand, has an opportunity to influence events so that each company comes out ahead but, to do that, the HR manager must preserve their own position! Before, during, and after the merger, HR may be responsible for assuring that cultural issues do not derail integration; for increasing innovation; for keeping communication going in all directions (upwards, downwards, across departments, across organizations); and for lessening the impact on those who are reduced and on the survivors. Even at the highest level of the company, HR can have a role. The new leadership team will need to work together on a daily basis, despite cultural and personality differences, power issues, and other barriers. HR can act as a facilitator, and also as a coach to individual executives. Personal and team assessments can be helpful in enabling team members to work together constructively. The HR manager may need to raise the issue of culture how people work, how they think, what they value, and, of some importance, how they view the other organization. If the acquired (or acquiring) organization is viewed with disdain, these issues must be addressed up front. Likewise, severe cultural differences must be addressed. They can be overcome with attention and work The mergers often prove to be traumatic for the employees of acquired firms; the impact can range from anger to depression. The usual impact is high turnover, decrease in the morale, motivation, productivity leading to merger failure. The other issues in the M&A activity are the changes in the HR policies, downsizing, layoffs, survivor syndromes, stress on the workers, information system HR as an internal consulting group HR is often one of a few units which can work as an internal consulting group during a merger or takeover, along with quality or process engineering teams. In this light, HR managers may be able to use management coaching skills to help managers and executives to communicate effectively and completely, to address power issues, and to deal with cultural issues. In some cases, HR may take a more active role; in others, HR should act as a coach HR takes control Train managers on the nature of change Technical retraining Family assistance programs Stress reduction program Meeting between the counter parts Orientation programs

 Explaining new roles Helping people who lost jobs Post merger team building Anonymous feedback helpline for employees The communication aspect being very important should be handled carefully by the human resource department. The communication should provide precise information to the employees, providing any piece of information which is unreal can lead to rumors and counteract. The communication should be sufficient enough to answer the queries and worries of the employees. The first set of information should be related to their future jobs, this will help to lessen their worries related to job security. The communication shouldnt involve false promises which may counteract later. The communication can be through trusted and credible employees of the acquired company and trade unions can be involved in the process to