Company Employees Manager
Restructuring process is very traumatic for the company and employees. Most people are averse to change that wasn't their idea; they tend to assume that their livelihoods are at risk. They fear of job loss and changes in corporate culture. As a result, the employees tend to make rash decisions to quit the company. The company needs to be prepared to loose some employees, but its main task is to retain the most valuable workforce.
In addition, people can feel offended because the managers ‘abandoned’ them. They can fear that the new structure will not be as work-friendly as their old environment or they can report to less experienced people.
Those fears can damage employee trust in company and negatively impact productivity. Nothing can be more distrustful as incomplete, false and negative information spreading out.
That’s why employee management becomes a paramount task during transition period.
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In order to understand employees and manage them efficiently, the company needs to analyze and addressed the most important employees questions:
- Will I to lose my job?
- Will I work with unknown people of different culture?
- Will the managers prefer to hire new people instead of retaining the existing employees?
- Will I have the same salary and benefits?
The employees of both companies joining together need to be properly managed. Representatives of both the "acquired" and "acquiring" employees should start planning employee management in the first stages of merge. Managers usually start planning for pension plans, employee benefit packages and other administrative HR gets taken care of, but they overlook the employees' expectations, reactions, and concerns about the merger or acquisition. Senior managers don't always realize that they, as "insiders," have made the transition by the time the deal is announced. Their employees have to deal with changes that they don’t understand and were put on them against their will.
It's best to have programs in place to deal with employee issues as soon as the merger or acquisition becomes official. Employers need to offer support and proper communication to help employees through the transition from one system to another.
These measures can include one-on-one sit-down sessions with a trained facilitator to focus forums where employees on both sides of the acquisition action get answers to their most pressing questions. Employees will find that they're not alone in feeling overwhelmed or stressed out by their new workplace.
In order to stop negative talks spreading out, it’s necessary to explain them the situation and detail plans and properly communicate to everyone.
Ravin Jesuthasan, senior manager of rewards and performance consulting in Towers Perrin, said: “After an M&A announcement, there's often concern, fear and trepidation among employees, customers and the public, too. Communication is often the most important part of a merger, yet it often falls between the cracks.”
Mercer's Penner, senior executive, added: "It's important to manage the messaging right away," agrees Mercer's Penner. "If you don't form the message, it will be formed for you."
Most senor executives stress out the importance of communication. For example, when Church & Dwight purchased Carter-Wallace, the company developed new communications means to convey to all employees the change in their current compensation. The executives also explained to them how their transition would be handled. Levine, senior executive of Carter-Wallace, commented: "We communicated with employees as soon as we were able to. We began with presentations at the various facilities conducted by the CEO and head of HR."
In addition, the company followed up with its employees by answering their questions. Vice presidents organized multiple meetings with their subordinates. Levine emphasized: “The goal was to show employees that everyone was focused on the success of the merged companies”. Kompare, executive of Hewitt's, agreed: “Historically, the big mistake is for companies to say 'we don't know' or 'we haven't made any decisions yet. The worst thing is to say nothing.
Whatever decisions you do know, tell them as soon as possible. For those you don't know, describe the factors involved in the decision making and give employees a best estimate for having an answer.” Penner, another senior executive, says:” Once the deal closes and compensation plans are completed, decide how best to present them to employees. Many companies use a combination of approaches to get the word out. The important thing is to have a consistent response ”.
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Communication can be provided using lots of common tools such as conferences, personal appointments, presentations, training, web-based news and the list of common questions and answers. The range of communication means is really wide. For example, during the merge of Bell Atlantic and Nynex, employees were offered face-to-face meetings and training sessions that are followed up by personal letters and periodic newsletters.
Well-known merge of Yahoo! Inc. in Sunnyvale, CA, used several communications means. Sartain, senior executive in Yahoo in 2003, states: "Pre-close, we would provide answers to [frequently asked questions] to the company. This information would be general and not detail-oriented. Our objective would be to let the new employees know we are concerned about their well-being and to say, We know there will be issues, and we are working on those and will have answers at the appropriate time.”.
In addition, after closing the acquisition, Yahoo! provided letters to employees and put detail explanation of their new role in the company and the proposed restructuring in compensation system. Sartain added:” In addition, the company also holds meetings for all employees to outline basic compensation information, she says. We also hold meetings with managers to explain the Yahoo! compensation philosophy and our guidelines. Compensation and reward guidelines are posted on the intranet.”
According to a recent employee survey, using communications during acquiring and transition period results in greater acceptance of the policies and terms related to the merge. A 2003 survey states:” Employees tend to believe their company's pay policy is fair if HR professionals fully explain compensation packages to them.”
As it was expected, significant number of the employees reported their dissatisfaction with the communications and compensation system all at the same time. This fact explained that employee’s attitude toward payment was related to the communication means that was the source of their information update. In addition, the survey concluded that when employees have clear understanding of compensation strategy and plans, they become more content with their pay and jobs overall.
History also can give examples of the importance of communication. 1987s had the rate of 40 percent of US companies that were acquired or restructured. Companies’ communicators actively participated in managing change, and communication was a keystone in the sustain of the organization and won employees’ trust. June 1988 USG was trying to fend off an unfriendly takeover. But the success took its high payment: USG's corporate debt immediately swelled from US $800 million to $3.1 billion.
USG had to sell off some assets in order to reduce debts, including some subsidiary companies. As a result, work force reduced by 6000. Before the this battle, USG's internal communication consisted only of a magazine published three times a year, as well as emails from management and notes of human resources information. Due to legal regulations, USG did not communicate much with its employees regarding the acquisition when the battle was in full swing. Even if the company could do so, very limited means of communication existed that time.
As a result, employees really worried about their future and were confused and pessimistic about their future. The solution and challenge was to help strengthen the employee morale by showing the company’s commitment to its employees. The company demonstrated guidance for all their employees during transition period. It was explained to the employees that the change would be to their benefit: secure and stable environment at the beginning of the process will be developed in a strong corporation. Major communication goal was to make employees to understand the company’s problems and challenges. It helped to minimize the impact of rumors and negative attitude.
Communication approach produced real positive results: stock ownership had increased by 18 percent; that was a significant change and indicator of employees trust in their company. The company needed to analyze employee attitude of employees to take appropriate actions. Since the need of communication was really urgent, the company did not have time to develop formal survey policy. Instead, the company questioned management and employees and performed an informal audit of existing communication. It was found that employee’s morale was low, the communication means were very inefficient and employees received inconsistent confusing messages from different sources.
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The urgent need was to assess the way to reach employees and develop communication strategy. The only problem was that the company was in the middle of restructuring; the management was redesigning the organization and failed to elaborate the detail global strategy to implement a communication plan. So, communication and information about the corporation were developed in parallel with the reshaping of the organization.
The management was in the process of the development of new corporation structure and could not work on communications problems. That’s why it was vital to address global company problems as well as the issues of each department in particular. Human resource managers had a challenge of dealing with employee concerns. They also had many ideas and approaches defining the future of the company. Company ’s communicators realized that any proposed programs required widespread support to be effective. The involvement of employees in communication planning was vital to support the new management plan.
To address the above communication issues, Human resources department recommended to create communication committee. The goal of the committee was to develop and implement an action plan. The committee consisted of general managers and many branch managers from various departments such as HR, sales, trade and finance departments. The chairman was a company’s communicator whose responsibilities included coordination of the discussion process, decision making and controlling of the discussion process so that the members could reach the agreement.
The committee was focused on its work and actively exchanged information. It developed goals for communication action plan and types of media communication. The committee analyzed a wide range of communication means that could reach employees on a timely basis at 200 plants and offices around the world. After careful analysis, the committee chose a set of media that was capable of reaching all employees in a timely way.
The committee raised small temporary reallocation of existing budgets to try different communication approaches. The company was short of budget and needed to see some progress for final solutions. As time came, those attempts were paid off in full. As a result, the combination of communication strategies made it possible to reach each employee in several different ways. It made communication very timely and effective. It was the fastest way to reach everyone.
Those first communications means determined the company future.
USG established a hotline; its messages were updated frequently, and employees received the latest news on USG. In addition, USG setup a bulletin board that was a combination of electronic communication vehicles such as FAX and electronic mail which can reach all employees in a few hours. Managers and supervisors used direct communication to ensure messages consistence. USG issued its own news magazine.
It also created Insight that is a set of questions and answers to common employee questions. The Insight provides guidance to support top-down authority. Moreover, each company branch opened its own local communication means of information that provide local news and updates. Each communication means has a strategic reason for its existence. For example, hotline gave latest updates of the company’s position to its employees.
Of course, communication staff could develop identical programs without committee, but the committee optimized and greatly improved the programs, so that they were far more efficient in action. The major role of the committee was to analyze the work of communication in different levels of the compny. As a result, programs and strategies were properly adjusted to meet the reality. Indeed, all committee members agreed that the process was really successful. Linda Novak, editor of the employee publication, commented: "Initially, I was uncertain about having a committee directing the focus of our communication effort. But the committee was very effective.
It was a source of ideas for new programs. It gave public relations useful guidance and gave us a chance to test our ideas with people who know their individual businesses. Even disagreement was okay, because the discussion was enlightening." Bruce Ralph, another committee member agreed:” We needed to do better in the quality and frequency of our communication, to make it more relevant to the issues facing the company and employees, to be more open on both the good and the bad.
We had several communication issues to address. But the toll-free number hotline helped to short-circuit the rumor mill, and the bulletins let us reach all employees with the same announcement on the same day before they read it in the local newspaper. Our communication has vastly improved, and the company is building credibility through talking openly about issues.”
The developed communication plans improved the credibility of company communication. As a result, employee received objective and valuable information. They performed their jobs much more effectively. Employee survey showed extremely successful result of the plan: hotline received hundreds of calls daily. Employees recognized that the company was really committed to the needs of its employees and strived to raise morale. They realized that the company cared for their needs and it greatly improved productivity. The workflow turnover was reduced and the company managed to retain most of its valuable employees. Saying that, communication is a vital part of corporate strategy to retain employees.