The human side of mergers: Those laid off and those left aboard (page 3 of 3)

MacDuffie notes that companies that do this successfully work hard to communicate to the employees that they match the new company values and culture. They put a lot of careful attention into the human factors that would make them inclined to stay - factors ranging from e-mail availability on the first day of work to future stock options. Otherwise, talented employees are primed to be picked off by other firms after a merger.

The ubiquitous nature of layoffs and the changing perspective on employment may also play a role in how people respond to mergers and acquisitions that result in layoffs. It's the result of organisational change. The new word is restructuring. When it comes to layoffs, there is a clear message that it's not about individual performance, particularly with mergers and acquisitions, when it's due to duplication of jobs.

MacDuffie admits that young workers today are much more reluctant to embrace a job for life and have adapted to today's push for what many call "employability." Companies today offer employees "employability" - which means that 'we promise you wonderful training and experiences, so even if we have to lay you off, you could sail out and get a new job. Though he knows it exists, MacDuffie questions many aspects of this changing employment contract. Will people adjust to a new reality and be willing to take the view that, "Oh, I'm here to get skills; I'll have many more jobs in my lifetime"? Will that actually prevail, or will the reaction be cynicism, mistrust, withdrawal of effort and commitment, a lot of things that are negative for the company and the individuals involved?

MacDuffie points to a recent survey of American workers aged 18 and over which shows that only 45% of workers say they are satisfied with their jobs; only 20% feel very passionate about their jobs; less than 15% feel strongly energised by their work; and only 31% believe that their employer inspires the best in them. The "New Employer/Employee Equation Survey" - conducted by Harris Interactive, Inc. for Age Wave, an independent think tank, and The Concours Group, a global consultancy advising senior executives - points to a somewhat ironic consequence of the so-called "employability" model for workers.

"If you begin to embrace the notion of employability, you are getting less commitment," MacDuffie says. There could be several reasons here. One view is that people are very committed to the job they are doing, to the projects that they are on, but they are not caught up in loyalty to the company. Maybe this is an acceptable loss. But the other view is that people are not just less committed but they are cynical, they are suspicious, they are always kind of calculating 'What is in it for me?'

The importance of taking the human factor into account, however, may be slowly gaining respect in the world of corporate mergers, for one simple reason: When these multibillion adventures begin to fail - and statistics show that at least half of them do - the accusatory fingers begin to point to the possibility that layoffs are not as successful a strategy for organisational change and increased performance as previously thought. MacDuffie suspects that in time, the typical Wall Street "old knee-jerk response - 'Oh there are layoffs, let's raise the stock price' - may be replaced by the need for more assessment." Layoffs or restructurings that are announced in the absence of any articulated plan for the future might actually bring the stock price down. With the Middle East's appetite for mergers rising, the acquirers better not forget that.