HRs Role in Mergers and Acquisition - Article Example

HR’s Role in Mergers and AcquisitionThe article by Deschenaux, J. (2013) states that HR should take a proactive measure before the litigation process by assuming a set of guidelines. These guidelines include reviewing the required policies and procedures while paying attention to FLSA requirements. The HR department should engage the employees with a view of discovering any underlying problem with the organizational policies and guidelines that can be achieved through an HR audit. The company should then ensure that their policies met all regulations by the Fair Labor Standards Act to ensure that they classify all employees appropriately.

The company should adopt a relevant anti-harassment training program meant to equip their employees on recognizing and preventing harassment. This training is considered necessary regardless of any state legal requirements since they limit the award of punitive indemnities in the event of litigation. Similarly, the company should devise a careful termination process that is not rashly done to avoid any lawsuits. As a protective measure, the company should also ensure against litigation with the implementation of a severance pay plan.

Finally, Deschenaux (2013) states that organizations should work towards reducing lawsuit costs once a litigation is filed. The company should prepare all relevant information ready to fight the claim and also examine all loopholes carefully and if possible, mediation with the party is highly recommended. There are three aspects that every human resource department should consider during the merging and acquisition process. The elements namely the costs, change capacity, and the corporate culture comprise of the primary litigation risks that can affect a business.

The due diligence process is crucial in determining the right aspects and summarizing the risks involved at an earlier stage. The cost associated risks include but are not limited to underfunded pension plans, discriminations lawsuits, and other pending employee payments. The corporate culture aspect involves litigation risks such as employee contracts, the collective bargaining agreements, failure to consider the target company’s employee management issues, and the organizational leadership structure.

The change capacity risks include the employees’ rigidity and perspective regarding the behavioral change. Other risks include failure to analyze the insurance policies of the target company, the current claim threats against the enterprise, matters in arbitration, pending litigation, and terms of previous settlements (Lee & Carpenter, 2012). The roles of the HR in the major phases of a merger or acquisition vary depending on the nature of the process involved. However, there are essential functions that all HR departments need to consider limiting the possibilities of litigation.

During the due diligence phase, the HR has to establish a rigorous target decision criteria and create value in the process. The HR has to interact with the target company’s employees and find out as much information regarding their operations and organizational cultures. The HR analyzes the company’s policies and terms of engagement with the various stakeholders to ensure that all aspects are outlined and solutions implemented accordingly. The data collected should be carefully protected with the standards detailed in the company’s privacy policy, and the department must also ensure that the process is confidential with no retaliation possibilities (Protiviti, 2014).

During the integration planning phase, the HR’s roles include implementing a planning policy that incorporates the views of the various employees and their organizational policies. The department should understand the workers’ characteristics and efficiency opportunities in planning a workable schedule and structure without focusing only on changing the target. The department should also concentrate on both short term and long term programs to cut costs and retain employees (Protiviti, 2014).

The HR department’s role during the integration execution phase includes integrating through consultation the corporate cultures by maintaining a transparent approach. The HR should also train all its employees in accordance with the desired company policies and also on measures to understand and prevent harassment. The department should maintain an efficient communications channel that seeks to address the issues affecting its employees. The other role includes developing a strategic lay-off and retaining program that is fair and offers equal opportunities to both employees from the involved companies.

Finally, the company should ensure that they provide the retrenched employees a severance payment as a gesture of good faith (Protiviti, 2014). ReferencesDeschenaux, J. (2013). Be Proactive to Avoid Litigation, Experts Say. Retrieved from http://www.shrm.org/legalissues/employmentlawareas/pages/be-proactive-avoid-litigation.aspxLee, C. & Carpenter, R. (2012). Leading Through Transition: Human Capital Strategy for Mergers and Acquisitions. Retrieved from http://www.cornellhrreview.org/leading-through-transition-human-capital-strategy-for-mergers-and-acquisitions/Protiviti (2014).

Guide to Mergers and Acquisitions: Frequently asked questions. Retrieved from http://www.protiviti.com/en-US/Documents/Resource-Guides/Guide-to-Mergers-Acquisitions-FAQs-Protiviti.pdf