People Factor

Taking care of employee well-being is as important as protecting your bottom line, in an M&A deal.

- Pallavi Jha

In the past decade, we have observed the role of M&As in furthering the scope of startups and giving them a leg up to play in the big leagues. But more recently, all eyes have been on Walmart as it acquired Indian ecommerce giant Flipkart in one fell swoop, for a staggering $16 billion. M&As such as this compel us to consider the effects such colossal business decisions have on individuals who comprise their workforce, and how those factors impact the bottom line.

Job satisfaction is easy to understand when one considers the myriad factors that can mitigate or further it, and thus affect employee performance. A basic concept in psychology, Abraham Maslow’s hierarchy of needs, recognises five levels of requirements— physical, security, social, self-esteem, and finally, self-actualisation—that every individual seeks to satisfy before they can be a productive, well rounded person. When our security is disrupted by the threat of unforeseeable events, we are unable to perform at our peak. Therefore, it is understandable how the uncertainty of a merger or acquisition might cause employees to go into panic mode, reduce their productivity, and use that energy to either cope with their anxiety or prospect other job opportunities.

Huge changes that impact the lives of employees can be particularly difficult for them to deal with, leading to a negative effect on morale if not handled effectively by the senior management. Needless to say, the culture of both organisations will be impacted, which could adversely affect the morale of both sets of employees. This kind of job uncertainty can cause even the best business champions to become partially disengaged or unmotivated.