M&As are often the cause of internal conflict and disengagement, which harms employee motivation and often leads to employee resignations (Lawlor, 2013; Lupina-Wagener, 2013; Riviezzo, 2013; Wagner & de Hilal, 2014). There is a need for managers to develop employee retention programs that will aim at encouraging employees to stay during the M&A. process (Gialouisi & Coetzer, 2013; Kujawa, 2015; Kummer, 2008; Morgan, 2008; Newton, 2015; Schuller &c Jackson, 2001). Employee motivation and retention depend significantly on employee praise and recognition by their superiors (Kujawa, 2015). Employee recognition and rewards are in fact particularly important for retaining talented employees (Al-Emadi et al., 2015; Nikandrou & Papalexandris, 2007; Saunders et al., 2009). M&As often lead to salary cuts and job losses, which in turn lead to employee turnover (Siu et al., 1997). Financial concerns and salary cuts are often the primary reason for employee turnover (Abbasi & Hollman, 2000; Carraher et al., 2006; Mano-Negrin & Tzafrir, 2004; Ramlall, 2003; Sturman et al., 2003), especially among high performers. There is a need to emphasise employee motivation especially during M&As and use tools such as monetary and non-monetary rewards in order to increase the employee retention rate (Gberevbie, 2010; Gialouisi & Coetzer, 2013; Govaerts et al., 2011; Morgan, 2008; Nikandrou & Papalexandris, 2007).

Involvement and Autonomy

Employee involvement in the decision-making processes and autonomy encourage employees to stay longer in a job position (Al-Emadi et al., 2015; Gialouisi & Coetzer, 2013). This becomes particularly important during M&As since there is a direct positive impact on employee performance and retention (Al-Emadi et al., 2015; Budhar, 2000; Szabla, 2007). Effective employee involvement and autonomy depend on continuous communication throughout all stages of the M&A process (Al- Emadi et al., 2015; Saunders et al., 2009) ultimately leading to enhanced organisational performance. During M&As the managers of the acquired company tend to lose their autonomy, experience tension, stress and discontent, which subsequently lead to employee resignations, integration problems and failure (Al-Emadi et al., 2015). Previous research supports that enhanced employee autonomy and greater involvement in decision-making contribute to employee retention during the difficult transition period of M&As (Al-Emadi et al., 2015; Hughes, 2015).


Often M&As fail due to ineffective communication (Newton, 2015). Effective communication especially during M&As contribute positively towards employee retention (Arnold, 2005; Cartwright & Cooper, 2000; Chew & Chan, 2008; Hughes, 2015; Nikandrou & Papalexandris, 2007). The success of the transition process of M&As depend greatly on effective communication (Appelbaum et al., 2000, 2007; Morgan, 2008; Saunders et al., 2009). Various studies revealed that the best employees are usually the first to leave the newly created organisation following a merger/ acquisition especially if internal communication is ineffective or inexistent (Al-Emadi et al., 2015; Bertoncelj & Kovac, 2007). Schuller and Jackson (2001) argue that communication plays a vital role in implementing organisational change and achieving effective integration of the various departments and teams. Even though there is enough evidence in the existent literature to support the important role communication plays in the success of MScAs, there is a need for more empirical evidence (Erickson, 2015; Gialouisi 8C Coetzer, 2013; Krug, 2009; Reus & Lamont, 2009; Saunders et al., 2009).

Job Enrichment and Training

Job enrichment can be achieved through the use of new technology and HRM tools such as empowerment, rewards, and employee training and development (Al-Emadi et al., 2015; Beecham et al., 2008; Firth et al., 2004; Lee et al., 2009; Van Dick et al., 2004). Employee training and development are conducive to employee retention (Gialouisi & Coetzer, 2013; Nikandrou & Papalexandris, 2007; Kongpichayanond, 2009). Al-Emadi et al. (2015) claim that training programs and education programs and personnel development contribute towards employee retention.

Job Stability

Job stability encourages employees to stay in the organisation (Dutta, 2004; Gberevbie, 2010; Guthrie, 2000; Ramlall, 2003; Schuller & Jackson, 2001). M&As create employee stress and job uncertainty (Van Dick et al., 2004; Weber & Tarba, 2012), which subsequently leads to high employee turnover. On the contrary, job security is one of the primary reasons that motivate employees to stay with a form (Hughes, 2015; Lupina-Wagener, 2013; Riviezzo, 2013; Wagner & de Hilal, 2014). Work-life balance and job security undoubtedly lead to employee retention (Allen et al., 2003; Anderson et al., 2002; Devi, 2009; Horwitz et al., 2003; Morgan, 2008). Unfortunately, most firms fail to realise that M&As lead to job uncertainty and high levels of employee dissatisfaction which in turn lead to high employee turnover (Lawlor, 2013; Lupina-Wagener, 2013; Riviezzo, 2013; Wagner &c de Hilal, 2014). The current literature suggests that often organisations fail as a result of the high levels of job uncertainty, employee insecurity and the salary cuts that often occur during M8cAs (Bansal, 2015; Giessner et al., 2006).

Relationships and Perceived Fairness

The relationships that employees might have formed with other stakeholders such as their colleagues and supervisors contribute to employee retention (Al-Emadi et al., 2015; Gialouisi & Coetzer, 2013; Heather, 2003). Abbasi and Hollman (2000) stipulate that often a toxic workplace environment could lead to employee turnover. The work environment has been characterised as a retention trigger (Zuber, 2001) and the nourishment of positive relationships among colleagues leads to employee retention (Bhatnagar,

2007; Hughes, 2015; Xing &c Liu, 2015). Adding to and in the context of all this, fair employee treatment contributes positively towards employee retention (Erickson, 2015; Sanda & Benin, 2011). Treating employees fairly and equally, with honesty, integrity and respect enables organisations to contribute towards employee retention (Birt et al., 2004; Chun, 2005). Employees expect to be treated with integrity, understanding, empathy and respect especially during difficult times such as an organisational change, which is the result of iVl&As (Chun, 2005). Subsequently, the employees’ perception as to whether the management is treating them fairly during a M&A directly impacts their intentions to leave the newly formed organisation (Erickson, 2015; Hughes, 2015).

Managerial Support

Employee turnover can also be triggered by a lack of support (Al-Emadi et al., 2015; Newton, 2015). Employee retention during M&As is supported by encouragement, support and reassurance (Al-Emadi et al., 2015; Kujawa, 2015). Reus and Lamont (2009) argue that it is critical during M&As to ensure that the management actively supports, respects and cares for the employees to adapt to organisational change. Several authors argue that those employees that are strongly committed are less likely to leave the organisation (Elangovan, 2001; Fairfield- Sonn &C Ogilvie, 2002; Schraeder, 2001). Committed employees tend to perform better (Devi, 2009). Employee turnover is also fuelled by lack of management support and respect towards their employees (Newton, 2015).

Organisational Culture and Identity

There is a direct impact of M&As on corporate culture (Hughes, 2015; Maimunah et al., 2016) often resulting in dramatic cultural changes. A change in organisational practices often results in organisational failure (Reus & Lamont, 2009). Managers tend to neglect the impact that the process has on corporate culture and subsequently on employee retention (Weber et al., 2011; Weber &c Tarba, 20П). The cultural differences that exist between the organisations participating in the merging or acquisition process often harm the integration process and, despite this, managers often neglect the importance of harmonising these cultural differences (Hughes, 2015; Maimunah et al., 2016; Stahl et al., 2013; Weber et al., 2009). This is primarily due to the difficulty in doing so. The existent literature reviewed suggests that the cultural differences can either have a positive or a negative influence on the success of M&As (Sarala, 2010; Vaara et al., 2011; Weber et al., 2011). Dasborough et al. (2003) and Bradt (2015) claim that most M&As have a negative impact on the organisational culture and only a few have a positive impact (Angwin, 2001; Van Dam et al., 2008; Raukko, 2009). M&As cause corporate identity changes (Morrell et al., 2004; Naz & Nasim, 2015) and some even result in the loss of corporate identity, which in turn leads to negative employee attitudes and low retention rates (Maimunah et al., 2016; Vaara, 2003; Van Dick et al., 2004; Ullrich et al., 2005). Very often employees fail to connect with the newly formed organisation, subsequently resulting in employee discontent, unhappiness and low morale (Giessner et al., 2006; Hughes, 2015; Naz & Nasim, 2015). Marks and Mirvis (2001) and Jetten et al. show that employees tend to experience high levels of uncertainty when there is a change in organisational identity and culture. Creating awareness among employees regarding the vision and mission of the newly formed organisation makes people feel confident in not losing their jobs (Croteau, 2013; Harding & Rouse, 2007). Anderson (2009) postulates the need to achieve integration between the organisational cultures of the two organisations merging.

< Prev   CONTENTS   Source   Next >