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The compensation conflict and integration in the M & A of enterprises

Author: HeTaoFu Lin Zuo From: www.yourpaper.net Posted: 2010-06-03 07:13:53 Read:
Keywords: the     pay compensation conformity; culture; psychological contract
Abstract: integrated salary conflict in enterprise merger and acquisition is mainly embodied in the conflict compensation structure, compensation culture, several aspects of psychological contract and a sense of fairness imbalance.For the implementation of strategic human resource management strategy, should make appropriate compensation integration strategy, communication and reconstruction of M & a scientific and reasonable salary system design of the compensation of cultural values, to ensure that the merger and acquisition activity, the smooth and efficient.


The scope of the current global is a fifth wave of mergers and acquisitions, mergers and acquisitions of domestic enterprises will be just unfolding wave.M & A has become an important means and shortcut enterprises grow the company strength, strengthen the competition advantage, realize the strategic objectives of the company.But according to the results of investigation for 45 enterprises in the world top 500 enterprises of the United States of America "CFO" magazine: 75% M & a "is disappointing or is a total failure", the main reason is the failure of integration of M & a "person".In the practice of enterprise merger, many enterprises will focus on the Target Corp find and purchase price negotiations, and to take over after the integration work is paid less attention to [1], even with a good understanding of the integration work, mostly Kung Fu in the strategic integration and financial integration aspects, and the human resources integration, including the integration of pay is not paid much attention, which is one of important causes for the failure of M & A.
Among the many elements of human resource integration, integration of pay is undoubtedly the most affected by the enterprise and the staff concerned.Failed due to no good pay integration of M & a process example be too numerous to enumerate, such as the 1996 "Cisco" the acquisition of Strata Com, the commission policy changes to the original Strata Com sales staff a large number of turnover, the business paralyzed, for merger and acquisition of enterprises, how to make compensation conformity is a realistic problem to solve, and the integration of key compensation is how to solve the problem of compensation conflict after M & A.

The compensation conflict , mergers and acquisitions in the analysis of

Two sides of M & A in the enterprise type, location, historical background, leadership style, industry type and other aspects may have many differences, so the difference between the two sides of the compensation system can hardly be avoided, which requires enterprises must be integrated salary system for timely.And integration of pay some conflict process will encounter, often bring great difficulty to the enterprise management work.At present, conflict and integration of compensation in enterprise merger and acquisition is mainly manifested in the following aspects:
Conflict of 1 salary structure.Fundamentally speaking, the compensation structure conflict is reflected in two aspects: one is the overall level of salary; two is the variable pay of different composition and fixed salary.Generally speaking, in terms of the overall level of remuneration, Chaoyang industry, monopoly industry wage level is a sunset industry, competitive industry wage level is high; large enterprises, small enterprises, non-listed company listing Corporation wages wages are high.In the compensation proportion, the proportion of foreign enterprise variable pay than state-owned enterprises; enterprises in emerging industries compared in mature industries, the proportion of the high new industry variable pay.
Specifically, the salary structure conflicts in different project came from the salary difference: (1) basic salary or basic salary project.This is according to the enterprise profit level and production scale of operation and determine the region and the industry level of income of the fixed salary.For similar work, salary may be due to differences in region, industry, or business types and different.For example, "Lenovo" 2005 acquisition of IBM PC business, in the basic wage (no bonuses, employee benefits and employee stock option), basic salary IBM employees are "7 times Lenovo" staff.(2) long-term, short-term incentive program.Long-term incentive project refers to the 3~5 annual cycle reward programs, such as an option, project bonus.Long-term incentive program if the merger in a party in the salary has a high proportion of, and such other party incentive project proportion is little or no, is more difficult to coordinate.(3) the welfare project.Welfare projects are all indirect compensation for employees.The merging parties because of their enterprise culture of different values, can hardly be avoided differences in welfare policy and specific projects.
2 pay culture conflict.The United States of America accounting consulting company Coopers& Lybrand (1992) of the 100 M & a failed company, found that due to the proportion of cultural differences unbridgeable caused mergers fail at around 85%.The compensation culture is an important subset of the enterprise culture, it reflected the distribution of value orientation of a unique enterprise, is the sum of an enterprise through their long-term compensation management practice form, and recognized by all staff and follow the distribution of value concept, compensation standard and criterion.It constraints and incentive value concept of staff from the spirit.Visible, the compensation culture is the source of enterprise vitality.Types of pay of culture have stable type, cooperation type, opportunity, ability four.When the two kinds of compensation culture interweave together, according to which a culture of compensation will be paid to be a consideration.
3 reconstruction of psychological contract.Psychological contract, this concept was first proposed by Levison and Schein in the nineteen sixties, they thought, psychological contract is employee commitment and responsibility between the organization and employees hold beliefs.Because of the compensation policy is unknown, increased the number of uncertain factors, will make the employee psychological contract towards the unstable state transition of [4].Especially when communication is not enough, people do not understand the future direction and the enterprise business objectives, will be more concerned about their changes in the enterprise's position, salary, and even psychological contract is facing the risk of disruption.The acquired enterprise employees in the psychological sense, the role of fuzzy enhancement, trust degree decreased, the ego to protect consciousness enhancement; will produce a series of problems worsen, decreased productivity, communication cooperation difficult, wait, struggle for power, the initiative to weaken in behavior.
The 4 justice imbalance.According to Adam Simy's theory of motivation, when people think of distributive justice, will be more efforts to work, if people think that unfair distribution, it will affect the enthusiasm.Salary management is involved in three kinds of fairness: internal equity, external equity and justice.Self fairness is the requirements of their pay and income matching; external equity for himself in the company of the same post salary and social average salary quite; internal equity is quite requirements of their income to make an equal contribution and the people inside the company income.In the relative stability of the enterprise, the staff fair is recognized for his salary, but when two different enterprise organization as the M & A and together, two enterprise staff of the original internal equity and justice was destroyed, the main reason, one is the internal staff salary fairness reference system change from the original enterprise merged into enterprises; two is changed after the merger work scope and work content, its own fair reference system is changed.So how to change to reshape the staff's sense of fairness is one of the important contents of compensation integration.

Solution
two, compensation in enterprise M & a conflict

1 the implementation of strategic human resource management.This requires human resources departments before the merger deal as soon as possible to participate in the preparatory work, the due diligence of the human resources, on both sides of the different culture and salary, welfare issues considered as early as possible, which is the key factor to determine the success or failure of the integration of pay.When the merger has been put on the schedule, the human resources department should become a member of the leading group of the merger and acquisition process, through.Human resources departments should accurately grasp the intention of M & A, advice and provide information needed for decision making through mergers and acquisitions, HR due diligence, the full understanding and analysis of identity of the top management team target of enterprise merger and acquisition; acquisition of both in management, enterprise culture and enterprise management control mode, whether there is significant difference; mergers and acquisitions the challenges and potential risk compensation conformity in where and so on.Aiming at the problems found in due diligence, as soon as possible to develop human resource integration, strategy, including pay integration steps, eliminating the risk of M & A, even with no decision suggestions.
2 making the compensation conformity strategy suitable for the.When the merger of two companies, the compensation can be divided into two parts: one is a temporary measure, reflected in the retention plan merger of this special period in the whole company salary system; another is the unified integration.According to the actual situation of strategic target acquisition and both sides of the three directions, to determine the compensation conformity:
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