HRM textbook

80 PART 1 INTRODUCTION
consultants Towers and Perrin. They tended to get involved only when management
began integrating the two companies into one. By comparison, close to two thirds of
the [survey] participants are involved in M&A due diligence now. 11 How human
resource managers assist top management with mergers illustrates how functional
managers (and particularly human resource managers) can support the company s
strategic aims.
DUE DILIGENCE STAGE Before finalizing a deal, the merger partners usually
perform due diligence. These reviews assure they know what they re getting
into. For the human resource team, due diligence includes reviewing things like
employee compensation and benefits, labor relations, pending employee
litigation, human resource policies and procedures, and key employees. 12
For example, do the target firm s health insurance contracts have termination
clauses that could eliminate coverage for all employees if you lay off too many
after the merger? 13
INTEGRATION STAGE Critical human resource issues during the first few months
of a merger or acquisition include choosing the top management, communicating
changes effectively to employees, and retaining key talent. 14 Several human resource
consulting companies, such as Towers Perrin, assist firms with merger-related human
resource management services. Their services help to illustrate human resource
managers roles in facilitating a merger.
* Manage the deal costs. Towers Perrin consultants identify and quantify peoplerelated
issues. These range from pension issues to redundancy costs and stock
options.
* Manage the messages. We support our clients in rapidly developing and deploying
an employee communication strategy.
* Secure the top team and key talent. Towers Perrin helps clients to identify key talent,
and then develop suitable retention strategies.
* Define and implement an effective HR service delivery strategy. Towers Perrin
helps clients plan how to implement the delivery of HR services, such as in
combining payroll systems.
* Develop a workable change management plan. Especially in cross-border
transactions, we assist companies in understanding and managing the cultural
differences they face as part of the deal.
* Design and implement the right staffing model. Towers Perrin helps companies
design the organization structure and determine which employee is best for
which role.
* Aligning total rewards. When integration [of pay plans] is desirable, we help
companies benchmarking and integration of compensation and benefit
programs. 15
4 Define strategic human
resource management and
give an example of strategic
human resource
management in practice.
STRATEGIC HUMAN RESOURCE MANAGEMENT
We ve seen that once a company decides how it will compete, it turns to formulating
functional departmental strategies to support its competitive aims. One of those
departments is human resource management. Its functional strategies are human
resource management strategies.
Defining Strategic Human Resource Management
Every company needs its human resource management policies and activities to make
sense in terms of its broad strategic aims. Strategic human resource management
means formulating and executing human resource policies and practices that