Merger and Acquisition Plan
... matched. On the other hand, power and prestige are not measurable; it is very difficult to match the needs of the employees for these issues. What we propose is to assign the leaders that have been affected by position elimination with some psychological assistance to cope with the situation. These mentors will use the surveys used to develop the motivational plans, and develop an understanding of what the employees needs are. In addition, mentors will set up one on one meetings with the employees to develop a further understanding of there needs and expectations, they will provide direction to obtaining the needed skills to succeed in the new environment. The third issue that was brought to us, was the culture change. Leaders fear that the change in culture might affect them. These changes will effect the employee to manager relations, and the manager to upper management relations. We need to note that because International Technologies is being acquired not merged, International Technologies need to adapt to the new culture. That is not to say that all of the unique culture developed in International Technologies will be lost, but to say that cultural changes will happen in the new organization. Our team is helping International Technologies leadership team to develop plans specifically to address these cultural issues. The plan includes educating International Technologies employees of the new cultural changes that they will be expecting, and developing training sessions to educated employees further. I addition, we have been working with both leaderships on developing plans for one vision and strategic direction to function as a single unit. The goal of these plans is to provide clear metrics that teams need to stay focused. The most important tool to make sure that the acquisition will go over smoothly is communication. Communication needs to be open, clear, and be at several levels. Management needs to be open and clear with the employees, they need to address their needs and concerns. Trust is key in the success of the organization, and it is far more important during the turbulent time of an acquisition. The most detrimental thing that can happen is for employees to feel that management is deceiving them, or trying to cover up information. Moreover, communication needs to be at several levels. The executives of both companies need to have an all hands meeting with their perspective employees, this meeting needs to inform the employees of the acquisition, what has happened, and what should they expect in the upcoming months. In addition, lower level management should set up one-on-one meetings with their employees to address individual concerns and questions. To assure employee performance during the transition time, we have asked the managers and team leader, to develop incentive plans for their employees. These plans should have goals that focus on assuring the smooth transition from International Technologies to Mergers Inc. The goal of these plans is to assure that employees keep their focus on their work, and not be distracted by the acquisition. The bonus that related to the incentive plan would be paid out after the merger is completed and the employee has met his objectives. Motivational Plan In order to survive and succeed, organizations had to cut fat, increase productivity and improve quality by retaining and motivation high-performance employees. The workforce nowadays is diverse. Understanding the range of personality characteristics of individuals and how to motivate them to take ownership for their tasks and completing them on time is the true and ultimate measurement of success to any given organization. It is crucial to organizations and personnel in management to recognize the human factor of any merger and acquisition to be able to retain and motivate your high-performance employees. So, to accomplish this during a merger and acquisition like the one we re dealing with, MAC Inc. decided to evaluate two motivational theories: The McClelland¡¦s Theory of Needs, utilized by International Technologies, and the Expectancy Theory, utilized by Mergers Inc. The purpose of this study was to determine which is more comprehensive and suitable for the new organization. International Technologies and the McClelland Theory The management of International Technologies has considered several motivational theories to develop its motivation and rewarding policies to insure employee performance. The management team over the previous years has selected and implemented the McClelland¡¦s Theory of Needs. According to Stephen S. Robbins, David McClelland and others have proposed three major relevant motives or needs in the workplace. They are called McClelland¡¦s Theory of Needs: 1. The need for achievement (nAch)¡X The drive to excel, to achieve in relation to a set of standards, to strive to succeed 2. The need for power (nPow)¡X The need to make others behave in a way they would not have behaved otherwise 3. The need for affiliation (nAff)¡X The desire for friendly and close interpersonal relationships. (p 246) When International Technologies adopted the McClelland¡¦s theory of needs for its employee motivation plan, employees received a survey from the human recourses department. The goal of this survey was to develop motivational and rewards plan specifically tailored for each employee. To be able to illustrate how the motivational plan worked, we will discuss the results of this survey. Seven employees were chosen at random, the names and identities for the employees were changed in this report to protect their privacy. John Heard is a twenty-three-year old black male that has interned with our company for two years. He is in his last semester at the University of Texas, where he will graduate this spring with honors. He is a very focused young man, a quick learner, and a hard worker. He is a perfectionist and says that he strives to be the best at whatever it is that he does. Although John is task oriented, but in some occasions he loses sight of the big picture, for that, some of his colleague accuse him of being selfish and stubborn. Marla Stripling is a thirty-six-year old Asian female who has been with our company for twelve years. She is a divorced woman raising two kids by herself. She has taken various courses at a local technological school where she has become very knowledgeable and proficient at all of our technical support systems. She is very capable of meeting all of our administrative and clerical needs. She always goes above and beyond that which is asked of her. Marla tries hard to fit in with her team, due to the fact that she does not have a degree. She tends to take on more work than she can handle. Unfortunately, her working style with her being a single mother, ends up over whelming her. She often slips in her dead lines, so she gets frustrated easily. Her immediate manager knows of her personal situation and tends to be more forgiving, this causes friction between her and her colleagues. Her manager is accused of having double standards. Terry Lewis is twenty-six-years-old black male who has been a valued employee of our organization for two years. He graduated from Mississippi Valley State University, with a double major in communications and business. He has leadership, communication and conflict resolution skills. Terry also brings fresh and new ideas to the table. Terry strives to become a part of the corporate management team, although he has been with the company for only two years. Often times, Terry gets frustrated when he does not get recognized for his work. He sometimes believes that he is not moving up due to his diverse nature and does not fit into the group. He intimidates people because of his aggressiveness. Mike Gordon is thirty-nine-year-old white technical manager. When he graduated as an Electrical Engineer, he worked as a development engineer with another company before joining International Technologies. He has been working for our company for ten years now. Mike has been a technical manager for only one year. He is married and has one daughter. He is known for his intimidating and aggressive management style; he likes to micro manage his team and their work. He loves being a leader, and is very good at it. Unfortunately, his management style has resulted in conflicts with employees that do not appreciate being micro managed, this has resulted in high turn over in his group. Dilbert Jones is a twenty-nine-year-old single male. He came to our company right after he graduated from College. He holds a Bachelors degree in Electrical Engineering, and a Masters in computer science. He is a brilliant engineer, known for his talents throughout the company, but at the same time he is known for his lack of people skills. He likes to work alone and he does not like micro managing. He gets board easily, so he craves challenging work. If he is not assigned a challenging project he finds one in another group and gets involved inn it. He has no interest in leadership positions; he just wants to get the job done. Jeff Glenmyer is a forty-three-year-old white male, married with two kids. Since he graduated with a Bachelor of Science in Electrical Engineering (BSEE) fifteen years ago, International Technologies has been the only company he worked at. Currently, he holds a technical manager position. His group consists of five engineers and one business administrator. Jeff's family come first, he tries very hard not to miss supper around 6:00 PM, so he tries hard to make sure that he does not need to stay late at work. He has been a manager for only six months, so he is not experienced with managerial skills. Often times, he is accused of being too soft or passive. He is very pleasant to be around, always promotes fun activities and having group gatherings. Social activities are very important to him, although he has great knowledge and experience in the technical aspect of the job, he is till developing leadership skills. He is not confrontational in crises and tends to shy away from conflicts. Sometimes this leads to bigger problems if attention is not present from the beginning. He has been working with same customer for the fifteen years he has been with our company, just two weeks ago, he was asked to lead a different project under a different customer. Jose Martines is a twenty-eight-year-old Hispanic widowed male. He has four kids. He holds an associate degree, working on the assembly line. Jose could not finish his education since his wife passed away. Working full time and raising four children has forced Jose to be very aggressive. He has worked at our company for four years, but proved to be a valuable member of the assembly line. Just two months ago, he was promoted to group leader (foreman). Jose is very dependable and responsible worker. When he is at work, he focuses on work only. He does not socialize at all. He sometimes gets confrontational with employees because they waste a lot of time talking about things not related to work. He is not very liked by his peers, but very popular with management. The survey had 15 questions that illustrate and address the three needs in the McClelland theory. The questions given are listed in Figure 1: Employee Survey Questions. Employees on a scale of one to five rated the questions, one is strongly disagree and five is strongly agree. Then the results were placed in a mathematical formula then graphed, see Table 2. Using the resulting graph, the supervisor or manager can develop a good understanding of his employee¡¦s needs, and will be able to develop a plan. Table 1 : Survay Results, includes the results generated by the seven employees picked at random for this report. 1. I try very hard to improve on my past performance at work. 2. I enjoy competition and winning. 3. I often find myself talking to those around me about non-work issues. 4. I enjoy a difficult challenge. 5. I enjoy being in charge. 6. I want to be liked by others. 7. I want to know how I am progressing as I complete tasks. 8. I confront others who do things I disagree with. 9. I tend to build close relationships with co-workers. 10. I enjoy setting and achieving realistic goals. 11. I enjoy influencing others to get my way. 12. I enjoy belonging to groups and organizations. 13. I enjoy the satisfaction of completing a difficult task. 14. I often work to gain more control over the events around me. 15. I enjoy working with others more than working alone. Figure 1: Employee Survey Questions Name John Heard Marla Stripling Jeff Glenn Jose Martines Mike Gyde Dillbert Jones Terry Lowies Age 23 36 43 28 39 29 26 Sex M F M M M M M Marital Status Single Divorced Married Widowed Married Single Married Family NA 2 kids 2 kids 4 kids 1 kid NA 1 kid Ethnicity Black White White Hispanic White White Black Education MA High school BS EE Associate Degree BS EE MS Computer Science BS Communication/ Business Position Intern Clerical Technical Manager Assembly Technical Manager Engineer Professional Time at Company (years) 2 12 15 5 10 9 2 Question Number Results 1 5 5 3 5 4 5 4 2 4 2 2 5 5 4 4 3 1 5 2 2 2 1 5 4 5 2 2 5 3 5 5 5 3 1 4 3 5 2 2 6 5 5 4 4 5 1 2 7 2 2 4 5 3 4 5 8 3 1 2 4 2 5 5 9 5 5 3 3 2 1 4 10 5 2 4 5 4 2 4 11 3 3 3 4 4 2 2 12 4 5 4 3 5 5 4 13 5 3 5 5 5 5 5 14 3 4 2 5 5 5 5 15 3 4 5 2 3 1 1 McClelland¡¦s Needs Formula Results nAch 29 20 22 35 29 30 32 nPow 21 16 17 25 26 19 20 nAff 24 28 23 22 23 16 23 Table 1 : Survay Results Parameter Formula nAch Q1 + Q2 + Q4 + Q7 + Q10 + Q13 + Q14* nPow Q2 + Q5 + Q6 + Q8 + Q11 + Q14 + Q15 nAff Q3 + Q6 + Q8 + Q9 + Q11 + Q12 + Q15 Table 2 : Mathmatical Formula Using the results form previous tables, a graph was generated to give supervisors and managers a visual understanding of the results. As it can be seen from the chart, every employee has his own mix of motivational needs. The next step for management was, developing an incentive plan that is tailored to the individual employee needs. The Expectancy Theory To facilitate a smooth transition with Mergers Inc., our team performed a study on the motivational policy used by Mergers Inc. The goal of that study is to develop a plan that will provide minimum disruption to our employees. Our team has compared Mergers Inc. polices to International Technologies¡¦ current pollicies, and developed a transition plan that will minimize negative effects of the organizational changes on our employees. Working with Mergers Inc. human recourses department, it was determined that they follow the Expectancy theory. The Expectancy theory breadth got our team¡¦s attention. According to Stephen P. Robbins in his book ¡§Organizational Behavior¡¨ (p. 257), ¡§The most comprehensive explanation of motivation is expectancy theory. Essentially, expectancy theory argues that the strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual. Therefore, it includes these three variables: 1. Attractiveness¡X The importance the individual places on the potential outcome or reward that can be achieved on the job. This variable considers the unsatisfied needs of the individual. 2. Performance¡V reward linkage¡X The degree to which the individual believes that performing at a particular level will lead to the attainment of a desired outcome. 3. Effort¡V performance linkage¡X The probability perceived by the individual that exerting a given amount of effort will lead to performance. Although this theory may sound rather complex, it really isn¡¦t¡¨ (P. 257) The main advantage of the Expectancy theory is it addresses the full spectrum of the motivational continuum. The McClelland Theory focuses on the motivational needs of employees, and categorizes them. While on the other hand, the Expectancy theory goes further than just understanding the needs of the employees. The Expectancy theory adds a better understanding of how feedback affects the employees, and how the overall performance feeds back in satisfying the employee motivational needs. Figure 2: Expectancy Theory Flow Chart By looking at Figure 2 above, our team has determined that the motivation plan developed for International Technologies¡¦ employees focus on the first box in the figure, and focus on stimulating the individual effort of the employee. The plan that we have evaluated based on the McClelland theory does not address the different levels of motivational needs that can affect the employee performance. Therefore, the motivation plans that International Technologies have do not state clearly, how the different types of feedback affect employees. Hence, this plan can be incorporated in to the bigger plan that includes all different levels of job satisfaction and motivation, according to the Expectancy Theory. So, it is our recommendation to use the Expectancy Theory. HR Plan The importance of human resources must be recognized. Start with market-responsive hiring practices. Make sure new employees will be able to work with your target market. Then train, train, trains, and encourages more training. The more extensive an employee's knowledge about the industry, the organization, and its goals, the better decisions he or she will make. Beyond sharing a corporate vision, setting goals and celebrating success, a successful organization must recruit and develop employees that can accomplish its outlined missions. The modern human resources professional must ensure compliance with numerous federal and state employment requirements, administer and uphold company policies, address office management issues and foster professional employee relations. Complying with federal employment regulations, reconciling employee conflicts, boosting morale and relaying the corporate vision are among the latest challenges for the human resources professional. Transition is a continuous task that requires vision and anticipation: "You have to look at the brake lights five cars in front of you. If you just look at the car in front of you, you will crash". In today¡¦s meeting, MAC Inc. will illustrate the changes that will pertain to employees as a result of this merger and acquisition. Conflict & Resolution International Technologies (Traditional grievance process) Mergers Inc. (Peer mediation process) Long and Drawn out Less bureaucratic Too formal Improves quality of work relationships Costly in terms of time spent and money required Reduces costs in terms of money and time spent reaching a resolution Decided by outsiders who do not fully understand the relationship Stimulates communication, problem solving, and decision making Obstacles to good working relationships Creates a Win-Win situation It¡¦s a fact of life. Disputes occur in the work place. This merger/acquisition requires a decision that will accommodate employees with the most effective dispute resolution process. International Technologies practices traditional Equal Employment Opportunity (EEO), grievance, and litigation procedures to resolve workplace disputes. Many years of experience with traditional methods dispute resolution have led agencies to design new and creative alternatives to handle workplace disputes. Mergers Inc. have adopted its own alternative resolution approach to solve workplace problems. They have named it Peer Mediation: Conflict Resolution. The peer mediation process encourages open communication and discussion between parties, who use their own ideas to resolve disputes. The peer mediation process includes two levels of dispute resolution: Peer Mediation and Authority Decision. The peer mediation process provides a neutral third party to assist in developing solutions and negotiating agreements between parties. This process consists of employee¡¦s co-workers to participate in dispute resolution. Senior level management will select this panel of individuals. The mediator does not render a solution. The parties themselves must achieve any settlement through mediation. Following peer mediation, contracts are developed in order to substantiate the integrity of the resolution. If there is not a satisfactory conflict resolution parties may elect the Authority Decision process. The authority decision process is a structured negotiation process. The parties make their cases in informal presentations with authority to settle the case. Education & Training Mergers Inc. employees are encouraged to continue their job related education and training through classes, workshops, seminars, and degreed programs that would improve their current job performance or prepare them for advancement within the company. Training and development office is where employees can go to talk with advisors and get all of the necessary information about assistance programs, in addition to web sites. These programs help attract, enrich, and retain employees, Tuition Reimbursement Program (TRP) supports employee development by providing (100%) reimbursement of tuition costs for courses meeting requirements of a certificate or degreed program related to current performance or planned career development at Mergers Inc. Another program is Staff Training Assistance Program (STAP), which provides reimbursement of tuition...