Merger is the combination of two companies to form a new company. This article explains about how a person responsible for a department (a departmental manager) can hold department's performance measures and can effectively deal with the human situations in a corporate merger. This also lists a number of possible human elements in this kind of situation and, as the people responsible, would take to investigate the issue objectively. This includes analysis of similar situations in other companies and asking questions to investigate the issue. After thorough analysis a recommendation would be made for a strategy to successfully deal with the issue of motivating the employees for the change. The following are the issues which are considered to be important from the management perspective while addressing the merger.
Employee Benefits Issues.
This means due diligence review of benefits programs, explaining the employees benefit plans impact on deal structure, negotiation of terms of the merger agreement as it relates to benefits, and post-closing implementation of merger agreements, including termination and merger of existing benefit plans and programs. The types of employee benefit plans involving the greatest potential for hidden liabilities are the pension plans, post-retirement medical and life insurance benefits and deferred compensation programs for executives. The benefit plans provide benefits in accordance with a formula that is usually based on the employee's service, compensation and age. These benefits are generally payable in annuity form, but some plans allow lump sum payments as well. Defined benefits are funded on a group basis, not through individual accounts. Most defined benefit plans are funded through employer contributions alone. A severance pay plan may present similar problems during a potential merger. Even in a small company, it is essential to create an equitable exit package for employees impacted by the merger.