Human Resource Cultural Due Diligence Business Essay

Published:

1. Company Organization & Management 2. General Human Resource Programs 3. Hiring and Employment Policy 4. Labor Relations Activity 5. Compensation & Perquisite Practices 6. Overview of Benefit Programs 7. Retirement, Profit Sharing, Savings Plans 8. Group Insurance

9. Equal Employment Opportunity

10. Occupational Safety & Health

11. External Environmental Factors

12. Corporate Culture

Company Organization & Management

1. Evaluation Factors

a) Organization Structure:

i) Mission Statement

ii) Functional Reporting relationships

iii) Position responsibilities

iv) Administrative reporting relationships

v) Interface with union representatives, government agencies, etc.

vi) Regional/plant personnel functions (not reporting to corporate)

b) Scope of department responsibilities & authority:

i) Key sub functions

ii) Ad hoc tasks and responsibilities

iii) Policy-making capabilities]

iv) Bargaining unit negotiations

c) Profiles of key management:

i) Personal profiles (names, positions, education, etc.)

ii) Skills and talents

iii) Attitudes toward achievement

iv) Historical data on experience and background

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v) Areas of responsibility

vi) Intention to continue after merger/acquisition

vii) Compensation history (cash, equity, and deferred arrangements)

viii) Contractual arrangements

ix) Personal, noncontractual arrangements

d) Employee payroll records

e) Payroll history

f) Physical office arrangements/sufficient space

g) Human Resource operating budget:

i) Allocations

ii) Performance to plan

iii) Historical

iv) Planning process

2. Considerations

a) Internal & external reputation of department management

b) Type and strength of management control:

i) Centralization

ii) Formality

iii) Participative decision-making

iv) Autonomy

c) Leadership qualities

d) Necessity for additional management following acquisition

e) Competency and adequacy of current management

f) Adequacy of department staff members

g) Lines of succession

h) Morale, work climate, and motivation levels

i) Level of work commitment

j) Team orientation

k) Compatibility of management styles between companies

l) Attitude of company management toward risk

m) Authority structure and degrees of responsibility at each

hierarchical

level

n) Inter and intra-departmental conflict

o) Formal vs. informal organizational structure

3. Data Sources

a) Organization charts

b) Position descriptions

c) Compensation records

d) Personnel files

e) Management contracts

f) Personnel policies and procedures manual

g) Operations (policy) manuals

h) Operations budget

i) Human Resource information systems

i) Management reports (turnover, FTE, merit increases, absence, etc.)

General Human Resource Programs

1. Evaluation Factors

a) Existence of employee development (training) programs:

i) 1st & 2nd line supervisors

ii) Managers

iii) Degree of company commitment

iv) All employees

v) Program documentation

b) EEO/Affirmative Action Program (See Section 9)

c) Management succession program

d) Employee education programs:

i) Annual costs

ii) Reimbursement scope

iii) Level of employee participation

iv) Employee scholarships

v) Eligibility

e) Safety programs (See Section 10)

f) Communication programs:

i)

ii) "Hot Line" telephone

iii) House organs/newspapers/employee publicity

iv) Quality circles and the like

v) Employee orientation practices

vi) Attitude surveys

g) Community relations/public relations programs/scholarship funds

h) Policies and procedures

i) Compensation practices (See Section 5)

j) Benefit programs (See Sections 6, 7, 8)

k) Relocation allowances

l) Computerized data sources and information

m) Use of outside consultants

n) Employee Assistance (EAP and Grievance programs

2. Employee services

i) Physical fitness programs

ii) Recreation

iii) Social programs

iv) Parking

v) Credit Union

b) Employee food services:

i) In-house facilities (cafeteria, eating areas, etc.)

ii) Neighborhood restaurants

3. Considerations

a) Quality and professionalism of employee programs

b) Fairness of application and eligibility

c) Degree o mechanization and /or computerization

d) Comprehensiveness of company policies

e) Staffing vs. use of outside services

f) Efficiency of computer resources

g) Availability and quality of in-house medical staff

4. Data Sources

a) Personnel policies and procedures manual

b) Administration and operating (policy) manuals

c) Employee handbooks

d) Employee announcements and memoranda

e) Accident log (5 years)

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COMPANY CULTURE

1. Basic Driving Force of Business

a) For example, but not limited to technology, research, marketing,

service, finance, other

b) Are there Corporate values and what are they?

c) What is vision/strategic intent?

d) Are their values reflected/ contradicted in their compensation

system

2. Operating environment

a) Short/Long term orientation

b) Degree of entrepreneurialism

c) How far along are they in TQM initiatives?

d) Level of competition (how competitive in the market)

e) Extent of competitive advantages

f) How structured is decision-making process?

g) Degree of complexity of company (example: conglomerate, global,

different business)

h) Commitment to employee health and safety

i) Employee involvement

j) Risk taking atmosphere

k) Degree of accountability and responsibility given employees at

different

levels

l) Concern of social responsibility

m) Labor relations philosophy

3. Life Style Indicators

a) Travel and entertainment practices

b) Working environment

c) Company car practices

d) Management perquisites

e) Distinctions between levels of management

4. Organization

a) Flat/hierarchical team/empowerment practices

b) Centralized/decentralized

c) Formalized leadership development/succession planning

d) Turnover/senior management and key employees

e) Time in position / senior managers

f) Recruitment practices - internal & external

g) Profile of Human Resources

h) Degree of computerization

i) Paternalistic versus low involvement

j) Task versus people oriented

k) Bureaucratic versus informal

l) Generalist versus specialist

m) Composition of board

n) Procedures used in employee selection

o) Promote from within versus hire from outside

p) Long service versus up and out

q) Degree of diversity

5. Interpersonal Style

a) Formal / informal

b) Leadership styles

c) Communication approaches (bulletin board/ TV/ Newsletters, MBWA/

annual

reports,

d) etc.)

e) Employee morale indicators (demeanor of employees/management

treatment of

f) employees/ treatment of customers)

g) "Chemistry" between current company leadership team and target team

6. Reward & Recognition

a) Fixed/variable compensation

b) Compensation policy & practice

c) Equity position of senior/key managers

d) Celebration of success

e) Promotion criteria

7. Data Sources

a) Company mission/vision/strategic intent statements

b) Strategic Plan

c) Values statements

d) Human Resources statements on mission/vision/intent

e) Annual report

f) Recruitment literature

g) Minutes of executive committee

h) Job Evaluation System

i) Leadership and succession planning descriptions/plans

j) Attitude survey

k) Human Resource Policy Manual

l) Performance Review forms

m) Travel & entertainment policy

n) Dress code

o) TQM literature

p) Training guides/records

q) Organization charts

r) Employee publications

s) Minutes of sessions with trade unions

t) Suggestion system