Antecedents of Employee Alienation and Its Impact on Individual Work Performance during Post-merger Integration in UAE Businesses

Abstract

Organizations have been using mergers to advance their tactical position. Though, more contemplation is given to tactical and fiscal goals, whereas social aspects is ignored. The objective of this study was to examine the major factors leading to employee alienation in post-merger integration. Data were collected from 482 middle- and lower-level employees in two organizations in the real estate and banking sectors in the United Arab Emirates. Analysis was carried out using structural equation modelling. Organizational justice, employee commitment, organizational trust, perceived effectiveness of HR initiatives, and employee communication strategy played important role in developing or mitigating a feeling of alienation among employees during post-merger integration. Employee tenure in the organization affected individual work performance. This study will help merger strategists to deliver appropriate HR practices during post-merger integration, facilitating mitigation of uncertainties among employees and maximizing their trust and commitment. The result of the study will enhance the theoretical understanding of the main causes of alienation in employees after merger, and development of a relationship model for factors contributing to employee alienation in case of mergers and the determination of the driving and dependence power of each variables causing alienation are going to provide a holistic understanding of the topic and enrich the growing body of literature on alienation among employees after mergers and acquisitions. There is a lack of an effective post-merger integration strategy and due to that, employees of the merging firms are inclined to feel dispirited, demoralized and discontented. Organizations that know how to mitigate this post-merger implication are the ones that succeed in integration initiatives. This research study is an initiative from the point of view of organizations as it allows them to recognize employees’ trust and commitment and its factors as well during mergers in an growing gulf economy i.e. United Arab Emirates. This study will also be helping merger strategists about proper execution of HR practices during post-merger integration, facilitating mitigation of uncertainties among employees and maximizing their trust and commitment. The study results will give managerial insights and serve as guidelines for creating suitable and effective strategic decisions which will help the organizations in reducing alienation among employees during the post-merger integration stage, which in turn will lead to higher productivity and other positive outcomes and will assist in producing favourable results to make mergers successful.