Mergers and acquisitions are stressful experiences for everyone involved. However, one sure-fire way of getting team morale up is to implement post-merger compensation incentives. Incentives have been used since time memorial to encourage workplace productivity with great success by those that understood how to use them correctly. Because you see, it’s not merely that you offer an incentive – it must be the right type of incentive. Let’s discuss post-merger compensation incentive ideas you can adopt in your newly merged company.
What is an incentive to begin with?
An incentive is technically any item of value or object that’s used by an employer to spur an employee to commit themselves to being productive and doing more in the workplace. Incentives are generally categorized as economic incentives, social incentives, and moral incentives. Within each of these categories lie the sub-categories: compensation incentives, recognition incentives, rewards incentives, and appreciation incentives. An experienced business broker can help you tailor your own incentives after studying your company dynamics.
1. Recognition incentives
Out of all former employees surveyed, more than three-quarters left because they felt unappreciated. They feel that no one recognizes the extra effort they put into their work. A lot of managers might be surprised to discover that most of their staff would prefer praise to a gift. In fact, 69% of your staff would go the extra mile if a little praise came their way every so often.
So, what sort of recognition incentives can you give? Taking time to thank your employees, praising them in front of their peers, handing out certificates of achievement and sharing an employee’s accomplishment during a company meeting are a few examples. Such public praise has a way of boosting confidence – it’s an all-round winner.
2. Reward incentives
When it comes to reward incentives, it’ is imperative to realize that the types of rewards that motivate people are different. According to the Incentive Marketing Association, most employees actually prefer non-cash incentives. 65% of employees agree that merchandise rewards and travel incentives as more enjoyable and memorable than cash gifts.
What are other rewards incentives you could use? Service award presents, gift certificates, and employee referral awards just to name a few. Cash is good too, but just remember that others would prefer other types of incentives.
3. Appreciation incentives
Building camaraderie and fostering a team spirit can be done through company parties and celebrations. Additionally, throwing company paid family activities is another excellent way to keep your employees grounded in the company. Don’t forget even small things such as celebrating birthdays, group lunches and even sponsoring local sports teams are all forms of appreciation incentives
4. Compensation incentives
When it comes to giving compensation incentives these may be in the form of end-of-year bonuses, stock options, raises and signing bonuses. While at least 65% of employees would prefer alternative incentives, there is a fair share – 35% who would be very happy to receive extra cash. However, it is generally understood that cash is probably the most expensive form of incentive to give out.
Try and balance out your incentives or give your employees the freedom to select which incentive they would prefer to receive.
Why incentives are worth considering
When two or more companies have been merged, it’s not merely the conglomeration of systems but people as well. The new team needs to find a way to work together harmoniously as they establish a nouveau company culture. Incentives may be used to encourage performance and favorable behaviors. Lunches are a great way to get people in one room and get to know each other.
Incentives are worth considering because they can help retain employees – something which is key in mergers and acquisitions. You want to retain your top talent. Additionally, they are a way of rewarding high achievers and making them feel appreciated for their efforts. Incentives can also encourage and foster teamwork between the new team members.
Carrying out a compensation incentive plan correctly
While incentives are good, they can do more harm than good if they are poorly orchestrated. You want to build trust between employees and therefore the manner in which you go about rewarding people must be clear. The criteria to qualify for the incentive or to be awarded an incentive must be clear for all.
All employees must be made aware of the reason the incentives are being offered. Give examples of the criteria used so that you are on the same page with your employees as to how the incentives will be awarded. Rewards go to those employees who achieve the stipulated expectations within the stated timeframe. And when awarding the incentive, do it publicly and say why exactly the person is being rewarded.
Discuss compensation incentive ideas with an expert
Business brokers such as Sun Acquisitions have decades’ worth of experience working with buyers and sellers to get the details of merger integration right. Sit down with an experienced broker and discuss different post-merger compensation incentive ideas and get tailored advice. Whether you’re still doing your due diligence or just thinking about a potential merger and acquisition, our team is only one phone call away. You’re only as strong as the people you’ve got around you supporting your vision and giving you sound advice. Buyer or seller, we work hand-in-hand with you to ensure you get the best deal possible.
Get in touch with one of our advisors to learn more about how Sun Acquisitions can help during business mergers and acquisitions.
Disclaimer: Any information provided in this blog is not intended to replace legal, financial or taxation advice given by qualified professionals.
