The influence of mergers and acquisitions on employee performance: a case of Equatorial commercial Bank
Mergers and acquisitions as an external growth strategy has gained surge because of increased deregulation, privatization, globalization and liberalization adopted by several countries. Mergers have become a common phenomenon in Kenya over the recent past. As a result of the challenging local and global macroeconomic environment, slowed economic performance and credit rating downgrades of major economies, Central Bank of Kenya (CBK) embarked on a significant monetary tightening stance, in an effort to reduce rising inflation and stabilize the Kenya shilling. The constrained economic condition resulted in the merger between Equatorial Commercial Bank and Southern Credit Bank. The main reason behind this merger was the need to enlarge branch network and balance sheet. Studies focusing on the project planning and management aspect of mergers and acquisitions appear scanty especially in the commercial banks where employee performance is affected by the conflicts brought about by the difference in structures and cultures in the merged organizations. It was in this light that this study aimed to fill the existing knowledge gap by carrying out a study on the influence of mergers and acquisitions on employee performance in Kenya where the focus was on Equatorial Commercial Bank. The specific objectives were to assess the influence of remuneration, sense of ownership and belonging, job security and chain of command on the performance of employees working in Equatorial Commercial Bank. This research problem was studied through the use of a survey descriptive research design. The target respondents included the 159 departmental heads, assistant departmental heads and lower cadre staffs like the supervisors, accounts and finance officers from the Equatorial Commercial Bank. A sample of 112 respondents was selected from within each group in proportions that each group bears to the study population. The study used a survey questionnaire administered to each member of the sample population. The study administered the questionnaire individually to all respondents of the study. Quantitative data collected was analyzed by the use of descriptive statistics using SPSS and presented through percentages, means, standard deviations and frequencies. Inferences were made by testing relationships among variables using Karl Pearson Correlation and multiple regression analysis. The study concludes that employee pay and remuneration affect employee performance in the merged organization. Mergers affect the sense of ownership and belonging among the employees in the Bank hence their performance. Job security affects the employee performance in the Bank. Chain of command affects the employees’ performance in the Bank. The management of the Bank should also check the quantity of work and compare with the salary given to the employees. The Bank should increase formal and informal training programs to their staff so as to enhance their sense of ownership and hence performance through mergers and acquisitions. Measures and strategies in order to enhance job security among employees in the merged banks should be achieved by creating environment that enhances their motivation level to satisfactory levels.