Dear All, I am currently doing MBA final year project on "Role of HR after Mergers and Acquistions" I need help in the same. Regards, Shweta
From India, Mumbai
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From India, Mumbai
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I have a question pertaining to the compensation strategy post a merger or an acquisition. What are the principles to be followed while harmonizing the compensation elements of the two organizations? Some specific doubts are:
1. What if the acquired company was providing housing and vehicle loans to its employees?
2. What can be done if the acquired company offered a transportation allowance (as a percentage of base salary) while the acquiring company provides a pick-up and drop facility instead?
From India
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111. What if the acquired company was providing housing and vehicle loans to its employees?
2. What can be done if the acquired company offered a transportation allowance (as a percentage of base salary) while the acquiring company provides a pick-up and drop facility instead?
From India
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Greetings,
Here's what we had done. However, I look forward to the replies and contributions to this post. It's best we hear more practices before you draw your learning points.
- What happens if the acquired company was giving out housing and vehicle loans to its employees while the acquiring company has no such provision? The one that provides such benefits would continue until the next financial year. The salary bands would ensure similar levels are streamlined from both companies. The new compensation structure would find a middle ground for those benefits. The loan amount would be closed as deemed, and no new loans would be issued.
- What can be done if the acquired company provided a transportation allowance (as a percentage of the base salary) while the acquiring company provides a pick-up and drop facility instead: Transportation, no matter how much it is considered, remains a significant retention and satisfaction tool despite being perceived as a hygiene factor. This is what we did: we offered transportation at a level including freshers to second-level supervisors such as Project leads. Assistant managers and above were offered Car benefits.
- (I presume in this case that if the allowance was removed in lieu of a bus facility, workers with a higher salary would protest. What can be done in this case?) Here's what I would suggest: initially offer both benefits, either bus facility or transport allowance, and eventually streamline it into one process.
Looking forward to more replies.
From India, Mumbai
Acknowledge(0)Amend(0)
Here's what we had done. However, I look forward to the replies and contributions to this post. It's best we hear more practices before you draw your learning points.
- What happens if the acquired company was giving out housing and vehicle loans to its employees while the acquiring company has no such provision? The one that provides such benefits would continue until the next financial year. The salary bands would ensure similar levels are streamlined from both companies. The new compensation structure would find a middle ground for those benefits. The loan amount would be closed as deemed, and no new loans would be issued.
- What can be done if the acquired company provided a transportation allowance (as a percentage of the base salary) while the acquiring company provides a pick-up and drop facility instead: Transportation, no matter how much it is considered, remains a significant retention and satisfaction tool despite being perceived as a hygiene factor. This is what we did: we offered transportation at a level including freshers to second-level supervisors such as Project leads. Assistant managers and above were offered Car benefits.
- (I presume in this case that if the allowance was removed in lieu of a bus facility, workers with a higher salary would protest. What can be done in this case?) Here's what I would suggest: initially offer both benefits, either bus facility or transport allowance, and eventually streamline it into one process.
Looking forward to more replies.
From India, Mumbai
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Thank you for your response. Another question that comes to my mind: Are there any legal risks involved in making such changes like - withdrawing the feature of leave encashment, - replacing transportation allowance with a bus facility, and - stopping loans for existing employees during a post-acquisition harmonization process?
From India
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From India
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