Background
ConsoE has recently acquired Expeer, an electrical company based in Austin, Texas with 15,000 employees. Expeer’s benefits package for its employees has traditionally been extensive and comprehensive when compared to what ConsoE offers. A tactical plan to communicate the change in benefits structure for the incoming former Expeer employees is crucial to help them understand and adjust to the new order.
Issue Identification and Root-Cause Analysis
The employees of Expeer get very high benefits that are significantly different from what is offered by the Consolidated Electronics. The benefits include a fully paid ten different health insurance plans, a 401k plus 3% match pension plan, lifetime retirement health benefits, stock grants, and all 15,000 employees are eligible for early retirement at the age of 50/20.
Expeer employees are less concerned and have little understanding of administrative business issues of the company. Conversely, they have little knowledge about Consolidated Electrical.
Consider themselves as part of the ownership of the Expeer Company and are therefore upset by the merger, which could affect their level of participation and input in the future.
Strategic Effect of HR Communication Plan
Attain a new employees’ understanding and agreement of ConsoE’s benefits provisions
Align Expeer employees’ attitudes and aspirations with those of their new employer for a long-term and fruitful relation.
Expand ConsoE through the successful acquisition of Expeer
Strategic Goal of HR Communication Plan
Increase new employees’ returns through various retirement savings plans
Conduct an in-depth evaluation of the nature of benefits communications plan by examining employees’ feedback.
Risk Analysis For The New HR And Benefits Changes
Event
The downgrading of the employee benefits: The 3% match on their 401k has been removed, the retirement age has been increased to 60/30 from 50/20, a monthly employee contribution of 15% and the retirement health benefits has been eliminated.
Attitude
Resentment. Employees are against the merger and wish that Chalmers found a better solution.
Outside Event that could influence Strategic Communication Plan
Media: The media publication and discussion of the merger
Employee reviews: Employee reviews on work relations, pay, and profit sharing plans
Procedural Considerations
The new compensation plan may favor incoming employees over the existing employees hence creating a downward effect on general performance
Obstacles
Reluctance to abandon a long traditional culture that invested heavily on employee welfare
Situation Analysis
Reason for a Communication Plan
Research shows that employees in a company that was acquired in an unfriendly manner had more negative attitudes towards the organization compared to those that were purchased in a friendly manner (Fairfield, Ogilvie, & Delvecchio, 2002).
A study conducted by the Chartered Institute for Personnel and Development indicates that proper communication of the advantages and impact of benefit plans leads to a high rate of employee retention and increased engagement in the organization (Emerald, 2010).
According to chapter eleven of the bankruptcy law, a company cannot terminate pension plans for its employees without providing an alternative defined-benefit pension plan (Cristy, 2010). A study of 974 employees reveals that better understanding of benefit system features has a positive effect on the attitudes, behaviors, and long-term commitment of employees (Sinclair, Leo, & Wright, 2005).
Traits of the New Employees
The employees are concerned that ConsoE does not value its employees because it offers less competitive benefits and are concerned that their health benefits and retirement plan have been ruined.
Impact on the Transition Process
Advancing a friendly transition of the benefits of the former Expeer employees and communicating the features of the new plan will help cultivate long-term positive engagement and attitudes toward ConsoE.
Accomplishment
The plan will engage key stakeholders, including the CEO of the former Expeer, Gregory Chalmers, in assisting with communication of the benefits in a clear and timely manner.
Stakeholder Analysis for HR & Benefits Communication Plan
The stakeholders of the HR & Benefits communication plan for Expeer-ConsoE merger include;
Former frontline staff, supervisors, and managers
ConsoE senior management
Human resource department
The marketing department
Stakeholder Analysis
Non-Management Staff
They feel that ConsoE does not value employees because the benefits they offer are significantly different from what other enterprises in the organization offer. They are most concerned with the changes in their health benefits based on the realization that they only have about ten years of service before retirement.
Supervisors
The supervisors feel that their contribution to the company will not be valued the same way Expeer did. With approximately twenty years of service, they are concerned that their retirement plan is in jeopardy. They know that the cash-balance plan will affect them, a 401k without no match is less useful, and that the removal of the retirement health care forces them to wait until they are 65 to be eligible for the Medicare program.
Mid-Managers
The mid-managers have lost a lot compared to other employees when the benefits changes are effected. They believe they are responsible for the success of the Expeer, which entitles them to better benefits. They are also concerned about their pension and retirement health benefits. They have not considered the option of switching companies because of their extensive experience that renders them over-qualified.
Strategic Message Matrix
Cash Balance Pension Scheme
ConsoE provides standard flexible investment benefits in a guaranteed annuity account. This means that the cash balance pension plan will accrue monthly interests with credit value varying with age, years of service, and the level of income of the employees. Conversely, the amounts will be automatically remitted by the company to the respective accounts.
Main Message One: Retirement Savings Are Guaranteed
Vesting is immediate
The cash balance savings are inheritable. This means that if the employee dies, the account will be passed to the chosen beneficiary such a family member or spouse.
Monthly interests will be credited automatically
The cash balance pension plan is not similar as the 401K. Unlike 401K, the cash balances scheme is an after-tax savings and has fixed cumulative interest rates.
The vested money will be handed over to an employee when they leave ConsoE
One can choose a lump sum or a lengthy distribution
401K Plan
ConsoE offers instant access to the 401K retirement to the former Expeer employees. The funds will be rolled into the ConsoE 401K plan within three months and will be accessed from that point onwards. The ConsoE 401K savings are transferable should one decide to resign.
Main Message Two: Choices
Employees have about 250 funds to choose from
Charles Schwab Corporation will replace the former Fidelity as the new administrator and will handle the smooth transition of the different schemes
The administrator offers on call one-on-one consultation services
There is an online management system where employees can track their accounts.
Employees cannot put their Expeer 401K funds into Fidelity; all accounts will be placed under Schwab
At Expeer, employees will no longer receive an annual profit sharing in their account. However, the difference will be bridged by the addition of a pension plan.
A Flexible Health Benefits Plan
ConsoE healthcare benefit plans have been designed based on family, couple, and individual needs.
Main Message Three: Custom Healthcare
Both full-time and part-time employees have access
Healthcare credits will be issued based on the family situation (single, single with children, married, married with kids)
The credit cards will enable employees to purchase a suitable health plan
ConsoE provides a comprehensive compensation and disability plan for employees should they get injured while at work
Credit-based expenses will be paid by the company
If one wants additional benefits such as vision and dental care, they may purchase using after tax money.
If employees want additional healthcare options, they may purchase them using before-tax money
Employee Stock Ownership Plan
The company has a trust fund for the employees where stocks are contributed and distributed to individual employee retirement accounts.
Main Message four: Ownership
All staff members are entitled to the stock on an immediate basis
Employees can purchase up to $300 worth of stock per salary period
The stocks will not be taxed
One cannot take money out of the plan but can take a loan against it.
Higher performance of the company means higher returns for the stockholders
The performance of the stocks will not affect other benefits
Employee Input
ConsoE values the individual inputs of each employee on all levels. The appreciation will reflect on the rewards and better employee relations
Main Message Five: ConsoE Values your Input
The company has realistic expectations of the employees
There are numerous opportunities for all employees to grow
The business administration is transparent and gives realistic information
The company has related and cares about employees personal life
Implementation
Facilitate future access to information on benefits after merger
Stakeholder: New Employees, Human resource department, and marketing officer
Objective: Increase employee knowledge and understanding of the new benefit plans
Message: By increasing the level of access to information through the web, hotline, print materials, assessment forums and face-to-face meetings, new employees will easily settle into the new system and will appreciate the schemes offered.
Tactics: Use evaluation tools to revise benefits communications, collect feedback from supervisors, and have designated contact details for the benefits department.
Inform the new employees about the long-term savings plans and educate them on how they can maximize returns on their investment.
Stakeholder: New employees and the Human Resource department
Objective: Increase employee appreciation of the long-term investment plans
Message: The savings plans reflect the strategic objectives on ConsoE
Tactics: Develop an interactive web information access point that matches the available investment options with employee needs.
Help employees get maximum value from the different health benefits provided.
Stakeholder: New Employees and the benefits department
Objective: Build engagement and consensus on the health benefit plan
Message: All employees should understand that ConsoE cares about their health matters
Tactics: Arrange frequent fairs to help advance preventive care and communicate the healthcare support services such as nurse hotline, online health records, and preventive health care services.
Educate HR trainers and supervisors about the benefits materials
Stakeholders: Supervisors and HR Trainers
Objective: Ensure flow of accurate and uniform flow of information from the executive level.
Message: Reduce the effect of grapevine in the internal communication benefits-related information.
Tactics: Print PowerPoint presentations and online bulletin postings with information about the potential questions and their answers. Conversely, schedule small-group training sessions and face-to-face meetings that will help stakeholders gain a deeper understanding of the benefits materials.
Implement a new employee mentoring system
Stakeholder: All new Employees
Objective: Increase the level of trust between employees and ConsoE
Message: ConsoE value employee inputs
Tactics: Arrange for workshops to help identify strengths and advance skills
Assess/Metrics
Outcome Based Approach
Outcome Measurement Plan
References
Cornelissen, J. (2014). Corporate communication: A guide to theory & practice. Sage: Thousand Oaks.
Cristy, M. (2010). The Bankrupt's Guide to Employee Benefits: Terminating Retirement Plans in Bankruptcy. Journal of Pension Benefits, 18-29.
Dramon, H. (n.d.). Expeer Employee Reaction to HR Benefits Changes. Retrieved from lmscontent: https://lmscontent.embanet.com/elpresento/thepresentations/elpresento.html?school=usc&course=cmgt502&module=w06-m04
Emerald. (2010). Employee benefits provision: Can it impact on talent retention, motivation, and productivity levels? Human Resource Management International Digest, 10 - 12.
Fairfield, J. W., Ogilvie, J., & Delvecchio, G. (2002). Mergers, Acquisitions and Long-Term Employee Attitudes. Journal of Business & Economic Studies, 1-16.
Knilans, G. (2009). Mergers and Acquisitions: Best Practices for Successful Integration. Retrieved from the Global Consulting Partnership: http://www.tgcpinc.com/SiteData/doc/MergersAcquisitions-MBrenner-071409/976ceba14c4fae75a4bbcb514bb34762/MergersAcquisitions-MBrenner-071409.pdf
Sinclair, R. R., Leo, M., & Wright, C. (2005). Benefit System Effects on Employees' Benefit Knowledge, Use, and Organizational Commitment. Journal of Business and Psychology, 3-31.
USC.edu. (n.d.). The Nuts and Bolts of HR Communication. Retrieved from USC Annenberg: https://mcm.usc.edu/mod/page/view.php?id=36798
