HR Problems: Ways of Overcoming

Often combined companies continue to operate as two separate independent units (including those due to the hostile relations between the top management of companies), which negate the effect of the conclusion of the merger or acquisition. No matter how well organized one has been in its preparation and implementation, the transaction cannot be considered effective if operating synergies ate not achieved. In turn, this synergy is unattainable without the synergy of staff of merging companies and “lapping” groups together. This issue is critical for transactions of M & A. After another merger, it turns out that “another empire” lived by very different laws, and the latter-day colleagues did not understand each other. As a result, communication stalled, and joint work is done very badly.

There are two basic levels of problem integration associated with the company’s personnel, at the confluence of the person and group. The first is the individual perceptions of change for each worker, his fears for the safety of the workplace, career opportunities, increase in load, etc.

The second level is associated with a specific organizational culture that exists in any company and forms a kind of group consciousness of unity and integrity. The main cause of failed mergers and acquisitions are the problems of personnel integration. The merger may cause a significant number of staff layoffs, which sometimes affect the image of the company.

During the change of the personnel, the company may have serious problems with the reputation of “Every fired employee can blame on leave in the first place, the company, not themselves and their results. In such a situation might work “word of mouth” about the dishonesty of the company, which will spoil the image of the company in the market as an employer.“ (Schuler & Jackson, 2001)

In addition, the process of integrating the two corporate cultures will reduce the quality of each employee, as in this case, various internal conflicts cannot be excluded.

“So, how easy will merge the two groups, depends on the compatibility of their corporate cultures. Organizational culture gives staff a sense of confidence and stability. And usually takes the most valuable employees, who can always find a use in the market. In this situation, the challenge of prevention care valuable employees is one of the most important tasks of HR-manager” (Gutknecht & Keys, 1993).

To avoid these difficulties, the new management of the company, according to most experts, should carefully consider the personnel policy, according to the professional staff to form as a specialist and pay the special attention to the strengthening of corporate culture and to think about the fate of the dismissed employees.

In implementing the project, mergers should take into account the existing differences from the principles and standards of business conduct, characteristics of the corporate culture and the type of organizational structure, procedures, and ending by the operation and interaction between the departments. Given the fact that in any business process, people involved in the enterprise, HR-departments, in this situation, play a key role, which is the development of HR-oriented strategy for the implementation of integration programs for the staff of the two companies.

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Obviously, one should create a single view of the updated brand company, determine what its mission, vision, and values are. To express these ideas, it often makes sense to make a correction to its visual brand to convey to all of the employees that new message of the company. After that, one should logically follow the implementation of the program brand communications. After the merger or union of several companies, one should follow communication programs providing the gap between the corporate culture and the culture that exists in the enterprise. Gradually, all the companies that started from different levels of culture will have to come to the values corresponding to the company’s strategy.

Some of the main strategic initiatives include:

1. Development of new organizational structure.

2. Analysis and description of business processes in terms of changes, development, and systematization of HR-procedures (Harding & Rouse 2007).

3. Identification of key personnel and development programs for their retention.

4. Organization of effective internal communication with employees, systematic incitement to them about the ongoing developments and future plans.

5. Adapting HR-processes:

· reform and integration of personnel management of the two companies;

· planning and optimization of the number of staff (including rotation);

· preparation and implementation of training programs;

· comprehensive assessment of staff: identifying the relevant staff skills, goals and objectives of the company, the formation of personnel reserve;

· systems’ development and incentive programs aimed at improving the efficiency of labor and personnel involved in the implementation of short-and long-term projects aimed at achieving the strategic objectives of the company;

· integration of corporate cultures.

6. Definition, classification, and assessment of risk areas:

· particular management style and organizational culture in each of the companies, the scale of necessary changes in this area;

· development schemes of redistribution of senior positions at the confluence of the two management teams in the new organizational structure;

· calculation of the number of personnel for the new organizational structure;

· an optimal number of staff: definition of the conditions of termination of employment contracts and training procedures’ outplacement.

The key problem faced by management and the staff of HR-Survey from the early days of the project of the merger is the resistance of people implementing changes. This situation is particularly dangerous for organizations with specifying technologically complex business processes, whose employees have unique knowledge and experience, including those for health. For them, of course, the main threat is leaving the company by highly skilled staff, loyalty decline, and falling efficiency. To reduce the possibility of withdrawal of key employees in times a company must hold negotiations with them and discuss the terms and conditions of their work in the new company.

Training project to retain key employees can be divided into three stages:

1. Creating a list of key personnel (HR with top executives of the two companies). There can be just middle managers, department managers, who know their subordinates.

2. HR-development project to integrate the positions of these professionals in the planned organizational structure and people’s adaptation to the new conditions, and the definition of the functional areas of responsibility, an independent evaluation of compliance with the level of competence of these professionals needed for new positions.

3. Development of special conditions for this category of staff, informing them about these conditions.

The task for top managers and HR-manager is to forecast the resistance of staff to develop activities that will forestall the development of such a script or minimize the adverse effects, people’s adaptation to new conditions.

The Hippocratic Oath is for health professionals’ ethical code top-level, which requires to perform their duties honestly, to refrain from disclosure of patient’s confidentiality, not to give their patients a lethal drug. The main provisions of the Hippocratic Oath have not lost their philosophical and practical significance up to this day.

Organizers of modern medical business are trying to borrow and use the experience of connection and moral improvement for business purposes.

The most effective method of preventing or overcoming the resistance is the engagement and involvement in the planning process and reorganization of the middle management level, leading experts (experts in the field) and informal leaders (Ulrich, 2002).

No less effective approach is the formation of the team leaders who can lead projects to implement the changes. This team consists of ambitious and charismatic personalities, having authority from colleagues who have shown their interest in new problems and willingness to implement them. The main function of such team is to improve employee’s loyalty to the ongoing changes in the company, to get them involved in the reform process, to overcome the resistance and inertia, and to promote professional fulfillment to the staff.

“Leaders of Change” should be trained in advance, while attention is concentrated on the development of key skills and competencies, such as leadership, project management, crisis management, team building, time management, the development of strategic thinking, presentation and communication skills, stress management, delegation powers, and people management.

To maximize the involving of all employees in the reorganization of the two companies, one should work systematically and consistently:

1. Conduct a communications’ campaign to explain the strategy of integration (with the assistance of top managers, HR-Services and a division of Public Affairs). The purpose of this campaign is to clarify the needed umbrella organization, belief in the appropriateness of staff and “profitability” changes to each of them and to clarify the overall strategy and long-term transformation plan. Basic principles of dealing with people are openness and “transparency” (Teerikangas & Very, 2006).

2. Conduct the group training for teaching the staff key skills required for the new strategy and to work in the new company.

3. Develop new programs to promote the staff which has to motivate people to achieve the short-term and long-term goals and the successful implementation of the projects for the integration of companies.

4. Regularly conduct internal investigations, monitor the changes in staff loyalty and attitudes to the changes.

5. Take management decisions on the “irreconcilable” change to employees to develop the action plan to adapt them or stop their employment.

Considering all aspects of the involvement of the staff in the change process, special attention should be paid to incentives and motivation. Developing special programs and compensation packages, target bonus systems, focused on different categories of staff, is an effective way of engaging staff and increasing productivity. It is important to remember that the main goal of any system of incentives is to increase business efficiency and execution of tasks.

In particular, effective incentives include:

· development and implementation of KPI – metrics that measure (quantitatively) criteria efficiency/effectiveness of employees, team, process/function;

· individual employee bonus system, implementing long-term projects – bonuses on the basis of the completion of the project (at the rate of two or three salaries) or quarterly bonuses (in a certain proportion of salary, depending on the labor contribution);

· material incentives for employees (both individual and group), on the implementation of short-term projects.