Perceived Effects of Mergers and Acquisitions on Employee Performance in Commercial Banks in Kenya

Abstract

The globalized economy has led to great transformation and envisioned diversification in the banking business and Kenya has not been left out. The transformations result from reasons like technology, market unpredictability, competition, stability, economic and political factors. M&A have been on the incremental trend in Kenya especially in the banking industry. Globally, mergers and acquisitions are frequently used to boost a company's competitiveness by acquiring market share, diversifying the portfolio to reduce business risk, expanding into new markets and regions, and leveraging economies of scale. The primary goal of this research was to determine Kenyan commercial banks' attitudes toward mergers and acquisitions. It is impossible to ignore the potential risks that mergers and acquisitions pose to commercial banks' operational, financial, and employee performance. For the study's descriptive research design, a cross-sectional survey was used to collect data. With 179 respondents and a response rate of 74%, data was collected using an open-ended structured questionnaire. The data was analyzed using descriptive statistics, and inferences were drawn using linear regression. Mergers and acquisitions were perceived to have an effect on employee performance, as indicated by a mean score of 1.63 and a standard deviation of 0.43. This conclusion was supported by 63 percent of respondents who agreed and 37 percent who strongly agreed. According to the findings, a strong positive relationship exists between mergers and acquisitions (M&A) and employee performance, as well as the perceived effects on employee performance. Given mergers and acquisitions, it is believed that the work environment has the greatest impact on employee performance.

The study recommends significant improvement of work environment; working conditions, balance, rationalize and spread workloads equitably. Transfers and relocations be well handled and facilitated properly and that policies around this to be often updated. The study further recommends that banks should take employee engagement considerably necessary even in the light of mergers and acquisition just as much as they focus on training and development with specificity to tasks and roles of staff. Further research should be undertaken to analyze perceived effects of M&A on employee performance for Kenyan commercial banks that have ventured into the East and Central Africa region and compare with the M&A in Kenya covered in this study.