Managing high performance work systems during M&As

Abstract

A recent Harvard survey reveals that failure rate for Merger and Acquisition deals sits in between 70 and 90%. Cultural Integration is cited as the second most important reason for M&A deal failure in a survey conducted by AON, hence, careful management of the human resources is of utmost importance during such deals. It is believed that firms undertake a lot of steps when it comes to financial and operational aspect of M&A but go a little lax when it comes to HR facets. In this scenario, High Performance Work Systems (HPWS) can prove to be critical success factor. These systems are defined as an integrated set of HR practices that are internally and externally consistent aimed at improving employee and firm performance. Empirical studies have proved a positive relationship between employees’ attitudes and HPWS. Therefore, we propose to understand the various initiatives undertaken as part of HPWS during M&A deals and see which are more crucial for employee satisfaction and the success of the deal.