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Mergers and Acquisitions in the Health-Care Industry


Mergers and Acquisitions are becoming a common trend within the corporate arena and the same may be said of the health industry. However, poor strategic planning may fail these trends unless the human resource management plays its contributory role in such engagements. The paper shall look at what these roles are and their importance in mergers and acquisitions.

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Overview of HR roles in strategic planning

Ideally speaking, human resource functions ought to embrace the best aspects in both companies so as to create a successful whole. However, most companies dwell so much on financial aspects and end up ignoring human resource functions during planning. In the end, this creates uncertain outcomes that make mergers and acquisitions in health facilities fail. ( Machiraju, 2003)

The human resource function in health facilities taking part in mergers and acquisitions normally encompasses both posts and pre planning phases. During the pre-merger phase, human resource personnel must take part in the creation of company strategic goals. Besides that, they must think of how they can create synergy across the two organizations being merged or acquired. Here, the human resource team should encompass various integration approaches that may be applicable in the future. In the post-planning phases of a merger or acquisition, HR personnel can contribute towards strategic planning by coming up with an effective communication plan as this can go a long way in streamlining the entire process. Also, there may be a need to look into national as well as corporate cultures prevailing in the new organization; the HR role would normally entail working with the new culture. Another important element in the post-M & A phase is leadership. Human resource personnel needs to look for effective ways in which leadership roles can best be optimized in such circumstances.

Human resource management role regarding various human resource functions

Recruitment and retention are perhaps one of the most crucial HR functions in M&As. In this regard, the new organization formed may require much fewer workers than the total of workers from both entities. Here, downsizing may be essential as well as corporate layoffs. If done poorly, employees may adopt a survivor syndrome approach where they feel constantly insecure about their jobs. This hampers productivity as they tend to mistrust their employers.

Duplication of roles in healthcare settings needs to be avoided at all costs. Consequently, it is the HR manager’s responsibility to conduct job analyses across newly formed divisions so as to ensure that only the most relevant employees are retained. In certain instances, it may be possible to find situations in which none of the acquired/merged organizations possess the right job descriptions and this can best be handled by recruiting missing personnel. (ICMR, 2009)

Training and development must be considered by various HR personnel as failure to do so may lead to confusion and stress among employees. Healthcare facilities are particularly complicated because several areas may change after mergers and acquisitions. In an interview carried out during this project, it was found that employees had to be trained on new information and technology aspects after mergers. Also, employees needed training on how to deal with larger client pools as well as new job challenges.

In employee development, HR personnel needs to discuss the possible career paths that may emanate after a merger or acquisition. Opportunities may likely either increase or decrease in the new organization and such possibilities ought to be fully understood by the employees. Employees may be working with different teams and in different departments. This could make their development issues more complicated and HR personnel needs to embrace this. (Ganter & Mendenhall, 2005)

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Employee performance management for human resource personnel will entail the creation of a new performance appraisal system if one existed before. This is because health facilities always have to change their systems to incorporate some of the new goals and strategies that come with the merger or acquisition.

While monitoring employee performance, HR managers need to remember that members of the health facility are still coming to terms with their new settings and they may not operate at their optimal levels – performance parameters should therefore be reduced at this level.

Regulatory compliance is also important as mergers and acquisitions present a series of legal implications that arise. HR personnel needs to ensure that they understand the role of trade unions or labor unions in an acquired or merged company. This is highly important because it will determine what kind of employment contracts are involved, what clauses affect compensation, the political links related to the unions as well as the dynamics that they could be going through.

Additionally, leadership issues in HR can easily be managed by acquisition contracts that dictate which organization will be the powerful one. Decisions making authority as well as other structural issues are usually laid out in regulatory compliance documents and these need to be followed to the letter by HR management.

Compensation and benefits have been cited as some of the most important motivators in HR. It is the role of HR personnel to come up with new compensation schemes that are relevant to a wider scope of employees. This needs to be done in line with current as well as predicted targets.

Mergers and acquisitions present a unique set of challenges to HR managers as compensations need to be aligned with employee expectations. When workers are paid less than what they were used to before the merger or acquisition, then they may be unhappy with it. This may spearhead a number of complaints and challenges from them thus impairing their productivity. HR personnel must ensure that they fully understand what had been going on in that organization before the merger or acquisition in terms of compensation. Also, the issue of performance-based payments may have to be considered. If one company was following such a strategy and another was not, then HR personnel has to decide what is best for the organization. (Zatz, 2008)

Some workers may be used to certain benefits such as having their weekends off, having employee bonuses, and holiday incentives. If these issues are found to be very important by the HR personnel then they ought to be maintained.

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There are a number of challenges that HR personnel has to deal with during mergers and acquisitions; however, the overall HR role is to take part in strategic goal creation, communication as well as synergic planning. Specifically speaking, HR management should avoid duplication of work through appropriate and retention. They should carve out new career paths and train employees to handle the new workload. Additionally, it is the role of HR to relate new performance management systems, adhere to prevailing regulatory requirements, and offer compensations and benefits that suit the approaches used by groups under consideration.


Machiraju, H. (2003). Mergers Acquisitions and Takeovers. London: New Age International.

Zatz, D. (2008). HR Manager’s Guide to M&As. New York: Routledge.

Ganter, S. & Mendenhall, M. (2005). Mergers and Acquisitions – Managing culture and human resources. Stanford: Stanford University Press.

ICMR. (2009). Mergers and Acquisitions.

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