How do you address discrepancies in salary structures between merging companies during negotiations?

Genuine mergers provide an opportunity to refresh the overall approach for reward. There will be positive and negative features of each company's approach, and the merger may be exposing the combined entity to difference geographies and markets that haven't been considered before. Landing a consistent future facing framework, with appropriate time and compensation for harmonisation built in to arrive at the destination is absolutely critical. You'll never truly merge organisations if outlying discretionary arrangements are allowed to persist.

Remuneration can be a loudspeaker sending messages about what we value. It can therefore provide a view 'behind the curtain' of both organizations. Discrepancies present potential problems for resolution, but they can also shed light on what each entity truly values e.g. performance or loyalty

Obviously you do not analyse just salary but are also assessing the job architecture and levelling approach to match the jobs in the acquired company to existing jobs, to ensure the pay comparisons you make are valid. The value of benefits provided should also be included in the exercise.

Ao lidar com discrepancias nas estruturas salariais durante a fus?o de empresas, o foco principal é na harmoniza??o e equidade. Primeiro, realizo uma análise detalhada das estruturas salariais de ambas as empresas, identificando as principais diferen?as e sobreposi??es. Em seguida, conduzo benchmarks de mercado para garantir que as faixas salariais estejam competitivas e justas. A partir disso, desenvolvo uma estratégia de integra??o salarial que alinhe as remunera??es, levando em conta as políticas internas, o valor dos cargos e a reten??o de talentos essenciais. A transparência na comunica??o e a sensibilidade ao impacto nas equipes s?o fundamentais durante todo o processo.

A thorough Salary analysis needs to be done. Also, Internal Benchmarking activity need to be taken care on salary for all designation of the respective department. Then the comparisons of pay and benefits need to be taken care for both the companies.

No matter what, some people will always be unhappy, so the goal should be to minimize this number rather than chase a perfect solution. A good strategy should have three broad elements: 1. Identify and segregate the differences in pay ranges and policies into Soft (low cost, low impact, broader coverage, easy to address) & Hard (high cost, high impact, limited coverage, difficult to address) and implement changes accordingly. This segregation simplifies the execution. 2. Instead of abrupt changes, follow a phased salary harmonization to reconcile differences over time (e.g., 1-3 yrs), allowing employees/organization to adjust gradually. 3. Grandfather existing employees into their existing salary structures, if there are major differences.

In addition to transparency, communication around salary discrepancies should be two-way, fostering dialogue not just delivering information. Employees will likely have questions and concerns during such transitions, so creating forums for open discussion—like town halls, one-on-one meetings, or anonymous feedback channels—can be invaluable. It’s not just about explaining "what" and "why," but actively listening to employee concerns and addressing them in real time. From my perspective, it's also critical to avoid one-size-fits-all messaging. Different departments, levels, and regions may have unique concerns about pay equity or competitive positioning. Tailoring communication can ensure that the messaging is relevant and well-received.

I find everything in the article to be true and very useful. What is also important is that important is to be aware if the economic reality of a merger. Making sure that people are at least no worse off is very important because if people are worse off it immediately impacts the company culture and sentiment towards the merger.