Do Pre-merger Loyalties Help or Hinder Post-merger Retention? A Longitudinal Study

Abstract

Mergers potentially threaten employees’ organizational identities. For some, a merger could be a trigger to seek employment elsewhere, but the factors associated with increased withdrawal cognitions post-merger necessitate further research. Using a longitudinal, pre- and post-merger design, we investigated two competing predictions drawing on social identity theory: a vulnerability hypothesis (high identification with the pre-merger organization will be associated with increased withdrawal cognitions over time) versus a buffer hypothesis (high pre-merger identification will be associated with decreased withdrawal cognitions over time). Employees from two public sector organizations were surveyed two months before and 22 months after a merger (N = 869). Consistent with the buffer hypothesis, higher pre-merger identification was associated with lower pre-to-post-merger withdrawal cognitions. We found that this relationship was moderated by both pre-merger professional and workgroup identification, highlighting the importance of considering multifoci identification patterns in a merger context. Findings indicate that work-related identification plays a key buffering role through organizational-level change, with pre-merger identification potentially helping retain staff through the merger storm. Thus, our study contributes to social identity theory by showing that an abundance of pre-merger identification forms should help employees navigate the challenges faced during the change experienced with an organizational merger.