Three Steps to Improve Total Rewards Synergies during a Merger Integration

Buyers, take note of different operating models and organizational structures during the diligence phase. If the target companies produce the same product or service, but are uniquely structured, more upfront work will be needed before operational synergies can be achieved. Particularly in the area of human capital, there are three activities organizations should perform in order to realize total rewards synergies faster and more effectively:

Define a Foundational Career Architecture

A defined career architecture allows employees and leaders to understand horizontal and vertical career progression within an organization. By defining career architecture, functional leaders can better inform employees of career opportunities within the new organization, and cultivate employee engagement through innovative development opportunities. Additionally, these discovery sessions can identify opportunities to consolidate or expand functional job families to bring more structure to the career hierarchy. These activities will lead to a more engaged workforce that will ultimately promote internal equity and establish a unified company culture. Overall, a defined career architecture will establish career opportunities amidst other organizational changes during a merger.

Confirm Career Architecture through Job Leveling Workshops

Job leveling workshops help support consistent career progression across organizations. After defining a career architecture for a newly formed company, job leveling workshops help map employees into positions that have a similar scope and impact to the organization. These workshops ensure that like positions are aligned to similar career bands within business functions and across the organization. Job leveling workshops will influence how employees are mapped to new or existing salary bands, which is a vital step in aligning to the organization’s new compensation philosophy.

Perform a Market-Based Impact Analysis

Both career architecture and job leveling exercises will improve the accuracy of a market-based impact analysis. This activity is needed in order for a recently merged company to have an accurate understanding of how they are paying employees compared to the market. The impact analysis is a critical tool in helping an organization understand where they are under and over rewarding employees.

After performing these activities, a company will have a foundation for career progression and a total rewards strategy. This approach will capture total rewards synergies faster and more effectively, and position the new organization for organic or acquisitive growth from a human capital perspective.

Click here to find out how West Monroe Partners helped a large healthcare company establish a fair, consistent and transparent total rewards strategy.

To learn more about West Monroe Partners’ Human Capital Management capabilities, please contact Brian Brinkley.

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