HR's Role in Maintaining Employee Engagement during a Merger, Acquisition or Demerger

187 Pages·2013·3.98 MB·English

“HR’s Role in Maintaining Employee Engagement during a Merger,
Acquisition or Demerger”
Emily Pierse
Masters in Human Resource Management
National College of Ireland
MAHRM
National College of Ireland
2012
DECLARATION
I hereby declare that this dissertation is entirely my own work and all the research was
conducted in an ethical manner. A promise of confidentiality has been made to the
research participants and as such for the purpose of this research no names of
participants have been given. Where other sources of information have been used they
have been acknowledged.
Signature:
Date:
ABSTRACT
This dissertation explores HR’s role in maintaining employee engagement during
mergers, acquisitions and demergers. It draws attention to the future post-recession
increase in M&A that is predicted to occur as the economy improves.
The objective of this research was to examine the importance of employee engagement
during M&A and to investigate the role of HR in maintaining employee engagement
during M&A. The researcher conducted quantitative questionnaires on employees to
gain the perspective of employees who had recently experienced M&A. The researcher
also conducted qualitative interviews to gain the perspective of senior management who
had experienced the same M&A.
The findings convey that senior management do not value the importance of employee
engagement as much as is necessary for the success of M&A. The findings also convey
that HR professionals must become strategic business partners in order to contribute to
maintaining employee engagement from the beginning of the planning stages of M&A.
Lastly the findings convey that HR can and must maintain employee engagement by
training local management.
The research contributes to the literature review and adds value to the topic of employee
engagement. The limitations of this study are discussed. Further research is also
highlighted and recommendations are made.
ACKNOWLEDGEMENTS
I would like to express my deepest gratitude to all those who contributed in any way to
the fulfilment of this research.
In particular, my first thanks goes to my supervisor Grace O’ Malley for her guidance
and support.
I am also extremely grateful to both organisations and their employees who made
themselves available to be part of this research. Without them this research could not
have happened.
Lastly, I would like to thank my parents for their support throughout this year and for
believing in me. I would also like to thank my sister for her advice, and my
grandparents for their prayers.
TABLE OF CONTENTS
Declaration ..............................................................................................................................
Abstract ..............................................................................................................................
Acknowledgements......................................................................................................................
List of Tables ..............................................................................................................................
List of Figures..............................................................................................................................
List of Abbreviations...................................................................................................................
Chapter One - Introduction......................................................................................................1
Context of Research................................................................................................................4
Chapter Two - Literature Review............................................................................................7
Business Context/ Rationale for Mergers, Acquisitions and Demergers..................................7
Reasons why Mergers and Acquisitions Fail.........................................................................10
Employer Obligations -Transfer of Undertaking s (TUPE)....................................................12
The Impact of Mergers and Acquisitions on Employees - Redundancy................................14
Employee Engagement.........................................................................................................18
The Importance of Maintaining Employee Engagement during Mergers, Acquisitions
and Demergers......................................................................................................................24
The Role of HR in Mergers and Acquisitions.......................................................................25
HR’s Role in Implementation...............................................................................................28
Culture..................................................................................................................................30
Role of Leadership and Line Managers in Mergers & Acquisitions and Demergers 31
Chapter Three - Research Question & Objectives................................................................36
Chapter Four -Methodology..................................................................................................38
Introduction..........................................................................................................................38
Research Philosophies..........................................................................................................38
Quantitative Research Philosophies......................................................................................40
Qualitative Research Philosophies........................................................................................41
Research Approaches...........................................................................................................43
Deduction.............................................................................................................................43
Induction...............................................................................................................................44
Research Design and Strategy..............................................................................................45
Research Design...................................................................................................................46
Research Strategy.................................................................................................................46
Research Choices..................................................................................................................48
Research Principles...............................................................................................................49
Research Population and Sample Size...................................................................................52
Research Time Horizons.......................................................................................................53
Research Techniques and Procedures (Data Collection and Analysis)..................................53
Relevance of this Research....................................................................................................55
Chapter Five - Findings and Analysis....................................................................................57
Findings and Analysis of Questionnaires..............................................................................57
Findings and Analysis of Interviews.....................................................................................81
The Motive behind the Demerger and Acquisition...............................................................82
The Role of HR........................................................................................................... 84
The Role of HR During the Change......................................................................................86
Trust, Resistance and Atmosphere.......................................................................................88
Employee Engagement.........................................................................................................90
Consideration given to Employee Engagement and Training...............................................92
Impact of Recession on Employee Engagement....................................................................93
Maintain Credibility as a Manager Despite Low Trust Levels..............................................95
Communication Best Practices.............................................................................................97
Factors that have the Biggest Impact on Maintaining Employee Engagement......................98
Biggest Challenges during the Acquisition and Demerger..................................................100
What Senior Management would do differently/ Recommendations for the future 102
Chapter Six - Discussion of Findings....................................................................................105
Conclusion/ Recommendations...........................................................................................110
Recommendations..............................................................................................................112
Appendix 1 - The Research Onionn.....................................................................................114
Appendix 2 - Example of Questionnaire..............................................................................115
Appendix 3 - Interview Transcripts.....................................................................................119
References .........................................................................................................................119
Bibliography.........................................................................................................................119
LIST OF TABLES
Table 1.1: Frequency Distribution and the Percentage Frequency Distribution...................58
Table 1.2: Frequency Distribution and the Percentage Frequency Distribution...................59
Table 1.3: What is the Job Title of your Current Position?.................................................60
Table 1.4: Frequency Distribution and the Percentage Frequency Distribution...................61
Table 1.5: Frequency Distribution and the Percentage Frequency Distribution...................62
Table 1.6: Frequency Distribution and the Percentage Frequency Distribution...................63
Table 1.7: Frequency Distribution and the Percentage Frequency Distribution...................64
Table 1.8: Frequency Distribution and the Percentage Frequency Distribution...................64
Table 1.9: Frequency Distribution and the Percentage Frequency Distribution...................65
Table 1.10: Frequency Distribution and the Percentage Frequency Distribution...................66
Table 1.11: Frequency Distribution and the Percentage Frequency Distribution...................67
Table 1.12: Frequency Distribution and the Percentage Frequency Distribution...................68
Table 1.13: Frequency Distribution and the Percentage Frequency Distribution...................69
Table 1.14: Frequency Distribution and the Percentage Frequency Distribution...................70
Table 1.15: Frequency Distribution and the Percentage Frequency Distribution...................71
Table 1.16: Frequency Distribution and the Percentage Frequency Distribution...................72
Table 1.17: Frequency Distribution and the Percentage Frequency Distribution...................73
Table 1.18: Frequency Distribution and the Percentage Frequency Distribution...................74
Table 1.19: Frequency Distribution and the Percentage Frequency Distribution...................75
Table 1.20: Frequency Distribution and the Percentage Frequency Distribution...................76
Table 1.21: Frequency Distribution and the Percentage Frequency Distribution...................77
Table 1.22: Frequency Distribution and the Percentage Frequency Distribution...................78
Table 1.23: Frequency Distribution and the Percentage Frequency Distribution...................79
Table 1.24: Frequency Distribution and the Percentage Frequency Distribution....................80
Table 1.25: Frequency Distribution and the Percentage Frequency Distribution...................80
Table 1.26: An Overview of the identified Themes Directly Obtained from the Narrative. ..83
Table 1.27: Frequency Distribution and the Percentage Frequency Distribution of the
Identified Themes..............................................................................................83
Table 1.28: An Overview of the Identified Themes Directly Obtained from the Narrative... 85
Table 1.29: Frequency Distribution and The Percentage Frequency Distribution of the
Identified Themes..............................................................................................85
Table 1.30: An Overview of the Identified Themes Directly Obtained from the Narrative... 87
Table 1.31: Frequency Distribution and the Percentage Frequency Distribution of the
Identified Themes..............................................................................................87
Table 1.32: An Overview of the Identified Themes Directly Oobtained from the Narrative. 89
Table 1.33: Frequency Distribution and the Percentage Frequency Distribution of the
Identified Themes..............................................................................................89
Table 1.34: An Overview of the Identified Themes Directly Obtained from Narrative..........91
Table 1.35: Frequency Distribution and the Percentage Frequency Distribution of the
Identified Themes..............................................................................................91
Table 1.36: An Overview of the Identified Themes Directly Obtained from the Narrative... 92
Table 1.37: Frequency Distribution and the Percentage Frequency Distribution of the
Identified Themes...............................................................................................93
Table 1.38: An Overview of the Identified Themes Directly Obtained from the Narrative... 94
Table 1.39: Frequency Distribution and the Percentage Frequency Distribution of the
Identified Themes...............................................................................................94
Table 1.40: An Overview of the Identified Themes Directly Obtained from the Narrative... 94
Table 1.41: Frequency Distribution and the Percentage Frequency Distribution of the
Identified Themes............................................................................................ 96
Table 1.42: An Overview of the Identified Themes Directly Obtained from the Narrative... 97
Table 1.43: Frequency Distribution and the Percentage Frequency Distribution of the
Identified Themes..............................................................................................98
Table 1.44: An Overview of the Identified Themes Directly Obtained from the Narrative... 99
Table 1.45: Frequency Distribution and the Percentage Frequency Distribution of the
Identified Themes.............................................................................................100
Table 1.46: An Overview of the Identified Themes Directly Obtained from the Narrative .101
Table 1.47: Frequency Distribution and the Percentage Frequency Distribution of the
Identified Themes.............................................................................................101
Table 1.48: An Overview of the Identified Themes Directly Obtained from the Narrative. 103
Table 1.49: Frequency Distribution and the Percentage Frequency Distribution of the
Identified Themes.............................................................................................103
LIST OF FIGURES
Figure 1.1: Number of Respondents from Company A and B...............................................58
Figure 1.2: Percentage of Respondents from Company A and B...........................................58
Figure 1.3: Number of Employees in each Company............................................................59
Figure 1.4: Percentage of Employees in each Company........................................................59
Figure 2.1 : Number of Length of Time in Service................................................................61
Figure 2.2: Percentage of Length of Time in Service............................................................61
Figure 3.1 : Number of emloyees who had experienced a......................................................62
Figure 3.2: Percentage of employees who had experienced a................................................62
Figure 4.1 : Number of Emloyees who Understand the Long Term Strategy........................62
Figure 4.2: Percentage of Employees who Understand the Long Term Strategy...................62
Figure 5.1 : Number of Emloyees who Received Advanced Notice on Change Initiatives ... 63
Figure 5.2: Percentage of Emloyees who Received Advanced Notice on Change
Initiatives ............................................................................................. 63
Figure 6.1 : Number of Emloyees that felt Communication was encouraged by Senior
Management......................................................................................................64
Figure 6.2: Percentage of Emloyees that felt Communication was encouraged by Senior
Management......................................................................................................64
Figure 7.1 : Number of Emloyees who were Satisfied with Communication with Local
Managers............................................................................................................65
Figure 7.2: Percentage of Emloyees who were Satisfied with Communication with Local
Managers............................................................................................................65
Figure 8.1: Number of Emloyees who felt they were Treated Fairly by their Employer 66
Figure 8.2: Percentage of Emloyees who felt they were Treated Fairly by their Employer.. 66
Figure 9.1: Number of Emloyees who felt Trust was Broken between Staff and
Management......................................................................................................67
Figure 9.2: Percentage of Emloyees who felt Trust was Broken between Staff and
Management......................................................................................................67
Figure 10.1: Number of Redundancies....................................................................................68
Figure 10.2: Percentage of Redundancies...............................................................................68
Figure 11.1: Number of Employees who Considered Alternative Employment......................68
Figure 11.2: Percentage of Employees who Considered Alternative Employment..................68
Figure 12.1 : Number of Employees who felt their Interests were taken into Account............69
Figure 12.2: Percentage of Employees who felt their Interests were taken into Account........69
Figure 13.1: Number of Employees who were not Worried about their Career.....................70
Figure 13.2: Percentage of Employees who were not Worried about their Career..................70
Figure 14.1 : Number of Employees who felt they were Provided with Adequate
Training to Adapt to Change..............................................................................71
Figure 14.2: Percentage of Employees who felt they were Pprovided with Adequate
Training to Adapt to Change..............................................................................71
Figure 15.1: Number of Employees who were Committed to the Company...........................72
Figure 15.2: Percentage of Employees who were Committed to the Company.......................72
Figure 16.1: Number of Employees who felt Secure in their Jobs..........................................73
Figure 16.2: Percentage of Employees who felt Secure in their Jobs.....................................73
Figure 17.1: Number of Employees who found the change a Positive Experience................74
Figure 17.2: Percentage of Employees who found the change a Positive Experience.............74
Figure 18.1: Number of Employees who believed their Work Performance was....................75
Figure 18.2: Percentage of Employees who believed their Work Performance was................75
Figure 19.1: Number of Employees who felt their Engagement Level was...........................76
Figure 19.2: Percentage of Employees who felt their Engagement Level was.......................76
Figure 20.1: Number of Employees who felt the Atmosphere was.......................................77
Figure 20.2: Percentage of Employees who felt the Atmosphere was...................................77
Figure 21.1: Number of Employees who believe the Goals and Targets were Attained.........78
Figure 21.1: Percentage of Employees who believe the Goals and Targets were Attained.... 78
Figure 22.1: Number of Employees who were Satisfied with the Handling of Change
Process...............................................................................................................79
Figure 22.2: Percentage of Employees who were Satisfied with the Handling of Change
Process...............................................................................................................79
Figure 23.1: Themes Identified and Percentage of Employees making Direct Reference
to the Themes.....................................................................................................81
Figure 24.1: Themes Identified and Percentage of Respondents making Direct Reference
to a Theme.........................................................................................................84
Figure 25.1: Themes Identified and Percentage of Respondents making Direct Reference
to a Theme.........................................................................................................86
Figure 26.1: Themes Identified and Percentage of Respondents making Direct Reference
to the Themes.....................................................................................................88
Figure 27.1: Themes Identified and Percentage of Respondents making Direct Reference
to a Theme.........................................................................................................90
Figure 28.1: Themes Identified and Percentage of Respondents making Direct Reference
to a Theme.........................................................................................................91
Figure 29.1: Themes Identified and Percentage of Respondents making Direct References
to a Theme.........................................................................................................93
Figure 30.1: Themes Identified and Percentage of Respondents making Direct Reference
to a Theme.........................................................................................................95
Figure 31.1: Themes Identified and Percentages of Respondents making Direct
References to a Theme........................................................................................96
Figure 32.1: Themes Identified and Percentages of Respondents making Direct
Reference to a Theme.........................................................................................98
Figure 33.1: Themes Identified and Percentages of Respondents making Direct
Reference to a Theme.......................................................................................100
Figure 34.1: Themes Identified and Percentages of Respondents making Direct
Reference to a Theme.......................................................................................102
Figure 35.1: Themes Identified and Percentage of Respondents making Direct
Reference to a Theme.......................................................................................104