Reference no: EM132808405

Employees of Newlife Pharmaceuticals were a worried lot. With the news that the company was going to merge with Vision Pharma, all of them were worried about what would happen to their jobs, and the other benefits as a result of the merger. There were all kinds of rumors regarding layoffs and reduction in pay and benefits. Vision Pharma was a leading firm with operations spread across Asia and Europe. Newlife Pharmaceuticals had a strong hold in marketing and distribution in India, and so it was considered to be a merger of equals. Amid all the confusion, the employees received a message that the CEO would like to address them regarding the merger.

The next day, the tensed staff assembled in the conference room. The CEO, N.K. Sharma started the proceedings by sharing with the employees the reasons for the decision, and the advantages for the firm, if the merger was completed. He felt that as a result of the merger, the firm would be able to explore various areas of research because Vision Pharma had the resources to finance such research and developmental activities. Even as Sharma was speaking, the employees had just one question in their mind, what would be the impact of this merger on their jobs and their pay packages. To their relief Sharma made it clear that a benefits team would be formed that would have representatives of both the companies. He requested the employees to be patient as it would take some time to clearly decide and bring in an effective benefit plan. As per Sharma's statement a benefit team was formed.

Later in the afternoon, a meeting of the benefits team was called. The team was headed by the VP-HR of the merged company, Vipin Dubey, who stated that since it was a merger of equals, they had to develop something that was the best for the new company, even if it were time-consuming. The team felt that the best way to go about it was to merge the best of both companies' benefit plans or new benefit program that would reflect the culture the new company was trying to nurture. Dubey felt that the latter option would take a longer time. He also stated that their aim was not just to design a new benefits plan, but also to make sure that the employees were well-informed and comfortable about the changes in the benefits programs. Before concluding the meeting, the VP made it clear to the team that people were of paramount importance to them and if the benefits program did not help in retaining them, then the merger would serve no purpose.

1. Explain the implications that might have put HR department of both the merging firms in a fix, from the industrial and employee relations view. Suggest the steps organization needs to take to promote positive employee relations in this situation.

2 The benefits team has to devise a benefit program that would satisfy the employees of both the firms. Design an equitable and flexible benefit plan and list the steps involved in it so that all the employees of the newly merged firm could be satisfied.