An Examination of Bank Employees' Job Satisfaction after a Merger and Acquisition

Dissertation Submitted to Northcentral University Graduate Faculty of the School of Business and Technology Management in Partial Fulfillment of the Requirements for the Degree of

DOCTOR OF PHILOSOPHY

by SHELLY A. BAKER Prescott Valley, Arizona October 2009

UMI Number: 3384714 Copyright 2009 by Baker, Shelly A.

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Approval

An Examination of Bank Employees' Job Satisfaction after a Merger and Acquisition

by Shelly Baker

Approved by:

Qhatr.Marilyn Simbfi/Ph.D

"/77M/L

Member: Rocky Dwyer, Ph.D.

Member: Yvonne Doll, Ph.D.

Certified by:

ID/W 01
hool Chair: Lynn)Payne, Ph.D Date

ABSTRACT Merger and acquisition (M&A) activity in the United States in the 21st century has dramatically increased. Dissatisfaction within the nonfinancial and service industries in the 1990s revealed damaging effects on M&As, but a lack of research exists regarding job satisfaction among bank employees after an M&A. This quantitative descriptive study involved examining several facets of job satisfaction among bank employees involved in an M&A 1 to 2 years postmerger, assessing whether satisfaction related to employees' demographic identity, and determining whether differences existed among the satisfaction facets. The Abridged Job Descriptive Index (AJDI) and the Abridged Job in General (AJIG) survey instruments were used to measure participants' levels of job satisfaction. The independent variables were age, gender, job level, job tenure, and level of education. Data from the AJDI and AJIG were analyzed using two-way analyses of variance (ANOVAs), repeated measures ANOVAs, multiple regression, and factor analysis. Two-way ANOVAs revealed respondents over 40 had higher satisfaction with M&As, and respondents in managerial positions (compared to staff-level respondents) also had higher satisfaction with M&As, F(1, 225) = 11.31, p < .01. The interaction between job tenure and job level was significant, where respondents with 5 years of experience or less had similar levels of satisfaction and staff with more experience had lower levels of satisfaction than those in managerial positions, F(1, 225) = 6.21, p = .01. Understanding the factors that contribute to job satisfaction might enable bank leaders to deploy strategies to ensure successful mergers.

vi DEDICATION This work is dedicated to God and my mother. I am grateful for growing up in a Christian home and having the opportunity to believe in God and understand that all things are possible through Him. My mother provided a Christian home for me and has been my rock and foundation through this process. I appreciate you being there, praying for me, and always believing that I can do anything.

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vii ACKNOWLEDGMENTS I would first like to acknowledge my mother, Sandy, for her love and support during this dissertation process. No person means more to me than my mother. She was my rock and biggest supporter during the dissertation process and throughout my entire life. I would not be where I am today without my mother. Second, I would like to acknowledge my mentor, Dr. Marilyn Simon, for her stepping in and providing much needed guidance, patience, and support during the final stages of the dissertation process. Her insight and feedback enhanced the quality of my work. I am truly grateful for everything she did for me. Thanks also to Dr. Yvonne Doll and Dr. Rocky Dwyer of my dissertation committee. Their kind words, professional feedback, and expert insight encouraged me to believe in my study and to complete my dissertation. I would also like to thank Dr. Phyllis Okrepkie for taking time out of her schedule to fulfill the role as my external reviewer. Third, I would like to thank the bank CEOs who gave me their time and their employees' time in order to complete my data collection. Their willingness to help me with this process was greatly appreciated. They are great examples of what leadership should be. Finally, I would like to acknowledge my academic advisor, Jessica. She was patient, helpful, and always there to answer my questions.

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viii TABLE OF CONTENTS LIST OF TABLES LIST OF FIGURES CHAPTER 1: INTRODUCTION Background Statement of the Problem and Purpose Theoretical Framework Research Questions Hypotheses Nature of the Study Significance of the Study Definitions Summary CHAPTER 2: LITERATURE REVIEW History and Business Climate of Bank M&As The Impact of M&As on Employees Relationship Between Demographic Variables and Job Satisfaction Age Gender Job level Job tenure Level of education M&A Process and Integration Summary CHAPTER 3: RESEARCH METHOD Overview Restatement of the Problem and Purpose Statement of the Research Questions Hypotheses Description of Research Design Operational Definition of Variables Selection of Participants Description of Materials and Instruments Procedures Discussion of Data Processing Methodological Assumptions, Limitations, and Delimitations Ethical Assurances CHAPTER 4: FINDINGS Results Evaluation of Findings
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x xii 1 2 4 5 7 8 10 11 12 14 16 16 22 36 38 38 38 39 39 40 56 58 58 58 59 60 62 62 65 68 77 78 80 81 84 85 114

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Summary

121

CHAPTER 5: IMPLICATIONS, RECOMMENDATIONS, AND CONCLUSIONS

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Summary Implications Recommendations Conclusions REFERENCES APPENDIXES Appendix A: Questionnaire Appendix B: Cover Letter and Informed Consent Appendix C: Initial Letter to Banks Appendix D: AJDI/AJIG Scoring Model Appendix E: SurveyMonkey.com Confidentiality and Security Policy Appendix F: Approval from Bowling Green State University Appendix G: Ethic Committee Approvals Appendix H: Normality Ploys for AJDI and AJIG Scales 124 126 132 134 137 145 146 149 151 152 153 154 155 156

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LIST OF TABLES Table 1 Hypotheses, Data Elements, Statistical Approach, and Measurement Scale Table 2 Coefficient Alpha Values for the JDI and JIG Table 3 Demographics of the Bank Employee Respondents 64 72 87

Table 4 Psychometric Characteristics for the Summated Satisfaction Scores....88 Table 5 Prediction of the Job Satisfaction Factor Score Based on Selected Variables 90 Table 6 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Job Tenure and Age Group 91 Table 7 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Job Tenure and Job Level 92 Table 8 Interaction of Job Tenure and Job Level for the Job Satisfaction Factor Score 93 Table 9 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Job Tenure and Gender 94 Table 10 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Job Tenure and Level of Education 95 Table 11 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Age Group and Job Level 96 Table 12 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Age Group and Gender 97 Table 13 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Age Group and Level of Education 98 Table 14 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Job Level and Gender. 99 Table 15 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Job Level and Level of Education 100 Table 16 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Gender and Level of Education 101

xi Table 17 Satisfaction Scale Scores Based on Calculated Means. Repeated Measures ANOVA Table 18 Frequency of Responses for Work on Present Job Table 19 Frequency of Responses for Present Pay Table 20 Frequency of Responses for Opportunities for Promotion Table 21 Frequency of Responses for Supervision Table 22 Frequency of Responses for People at Work Table 23 Frequency of Responses for Job in General 106 107 108 109 111 112 113

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xii LIST OF FIGURES Figure 1. Scree Plot of the Six Eigenvalues from Principal Components Analysis. 89 Figure 2. Histogram for work on present job subscale data Figure 3. Normal Q-Q Plot for work on present job subscale data Figure 4. Histogram for present pay subscale data Figure 5. Normal Q-Q Plot for present pay subscale data Figure 6. Histogram for opportunities for promotion subscale data Figure 7. Normal Q-Q Plot for opportunities for promotion subscale data Figure 8. Histogram for supervision subscale data Figure 9. Normal Q-Q Plot for supervision subscale data Figure 10. Histogram for people at work subscale data Figure 11. Normal Q-Q Plot for people at work subscale data Figure 12. Histogram for job in general scale data Figure 13. Normal Q-Q Plot for job in general scale data 156 156 157 157 158 158 159 159 160 160 161 161

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CHAPTER 1: INTRODUCTION Mergers and acquisitions (M&As) have become a key part of many corporate growth strategies, with diversification being the primary reason for merging (Cocheo, 2008; Rosta, 2008). Banks seek to diversify in order to reduce risks and increase returns, and geographic diversification, that is expanding operations into multiple locations, is used to obtain greater market power. Banks merge with other banks that have branch locations in multiple states in order to reach a larger customer base. The anticipated benefits are less competition and increased profits for the resultant bank. The corporate diversification strategy has led to an increase in bank M&As. However, M&A transactions often fail to achieve their intended purposes of increasing profits and market share (Cocheo, 2008; Rosta, 2008). Behavior of employees affected by M&As may critically affect whether M&As are ultimately successful (Appelbaum, Lefrancois, Tonna, & Shapiro, 2007; Range, 2006; Schreyogg, 2006; Van Dick, Wagner, & Lemmer, 2004). Thus research aimed at elucidating the psychology of such employees may assist leaders in achieving successful M&As. As elaborated below, the current study was carried out to provide information applicable in this regard. This chapter provides an introduction to the issue of the importance of bank employees' job satisfaction following M&As and to the study design. Specifically, a brief background highlighting the significance of the aforementioned problem is provided, followed by statements of the specific problem being addressed and the specific purpose of this study. A discussion of

2 the theoretical framework of this study is then given, followed by a presentation of the research questions, nature of the study, and significance of the study. Finally, a glossary of pertinent terminology and a summary of this chapter are given. Background In forecasting the future of bank M&As, the impact of regulatory orders cannot be ignored. Some institutions initiated M&As before regulators began to push institutions towards the M&A. When other institutions had difficulty initiating M&As, buyers waited until these institutions were about to fail before beginning the acquisition process. Morgan (2009) reported that in the first half of 2009, there were only 72 announced transactions in the banking industry, down from 109 deals in the same period a year earlier. However, Morgan predicts this decline will flatten out or reverse by the end of the year, driven by banks' continued need to raise capital. Nevertheless, the continued M&A activity indicates that more banks are now facing the challenges caused by the M&As. Zhu, May, and Rosenfeld (2004) found that only about 50% of all M&As met initial financial expectations, the principle incentives for pursing M&As. In a recent analysis of four bank M&As between 2005 and 2006, Sperduto (2007) found that 70% of the bank M&As failed to produce the intended results of increased profits and market share. Likewise, an international study of 52 M&As between 1998 and 2004 conducted by KPMG found that 75-83% of M&As failed to achieve their objectives (Cartwright & Schoenberg, 2006). The reasons cited for considering the M&As as failures included reduced productivity, labor unrest,

3 increased absenteeism, and a loss of shareholder value relative to the pre-M&A situation. The researchers interpreted their findings as signifying that there may be a correlation between post-M&A underperformance and high failure rates. These failures were usually attributed to financial and strategic factors only. However, post-M&A underperformance relative to expectations could be related to declines in employee commitment and job satisfaction. Indeed, according to Harrison (2005), companies that do not recognize the business implications of human emotions risk low morale, dips in productivity, and unsuccessful starts for the M&A. Researchers have attributed the less than stellar record of M&A outcomes, in part, to how the integration of the participating firms affected the employees of the acquired company (Range, 2006; Schreyogg, 2006; Van Dick, Wagner, & Lemmer, 2004). Furthermore, research has shown that M&As can be a traumatic event in the lives of the individuals and organizations involved in the change. Many employees experience feelings of loss, resentment, and a decline in job satisfaction, and their reactions can lead to the failure of the M&A (Appelbaum et al., 2007; Cartwright & Schoenberg, 2006; Sperduto, 2007). Appelbaum et al. concluded that such human resources (HR) difficulties may add costs to the integration process and undermine the ability of a firm to achieve synergy, and thereby offset the hoped-for benefits of merging. According to Morrell, Loan-Clarke, and Wilkinson (2004), human capital should be considered a critical resource upon which firms can rely on to gain a competitive advantage in the marketplace after a M&A. Furthermore, Hunt and

4 Downing (2006) concluded that, in the majority of successful mergers, the purchasers predicted that personnel problems would arise and acted quickly when such problems surfaced. Thus, understanding the job facets that lead to positive job satisfaction may help other business leaders deploy strategies that could increase their chances for achieving successful mergers. Statement of the Problem and Purpose Historically, failures of M&As have been based on economic and financial assessments only, but recently attention has shifted toward HR concerns (Appelbaum et al., 2007; Stahl & Mendenhall, 2005). According to Wall (2005), nearly 58% of all acquiring banks do not plan adequately for the cultural integration of the merging companies. The success or failure of a M&A can be attributed in part to the behavior of the affected employees (Appelbaum et al., 2007). Unintended negative consequences of M&As on employee behavior cannot be anticipated or alleviated without a clear understanding of how employees are psychologically affected by M&As. At present, there is not adequate information about the level of job satisfaction among bank employees who have experienced a M&A to understand how they affect employee psychology. Hence, to address this problem, the present work aimed to assess overall job satisfaction as well as a number of satisfaction components in bank employees who have experienced a M&A. The purpose of this quantitative descriptive study was to examine several facets of job satisfaction among bank employees who were involved in a M&A, one to two years post merger, and to

5 assess whether satisfaction was related to the employees' demographic identity, and whether there were differences among the satisfaction facets. The population for this study included 229 current employees from four banks that were involved in a M&A between January 2006 and December 2007. The employees worked for the following banks located in the parenthetically indicated geographic locations: Bank A (MA), Bank B (NC), Bank C (NY), and Bank D (IL). For the purposes of this research, the level alpha = 0.05 was chosen for the analysis. Using an alpha level of 0.05 and varying degrees of power from 0.70 to 0.90, a priori sample sizes were computed to achieve various effect sizes for a Chi-square test with values of 4 and 8 for the degrees of freedom. The result of the power analysis was that the sample size needed for this research was 82 samples to achieve an effect size of 0.3, a power of 0.80, at an alpha level of 0.05, assuming a two-tailed test. The power analysis confirmed that the 229 respondents were satisfactory in terms of ensuring the results were statistically significant for the population sampled. Theoretical Framework A growing body of literature indicates that M&As can be a traumatic event in the lives of individuals and organizations (e.g., Bellou, 2007; Lipponen, Olkkonen, & Moilanen, 2004; Mylonakis, 2006). Mergers and acquisitions are extreme forms of organizational change, and employees perceive change as threatening because of feelings of vulnerability and the fear of losing security.

6 According to Bellou (2007), employees can experience merger syndrome characterized by increased self-interest as they became preoccupied with what the integration actually means for them, their incomes, and their careers. In fact, Bellou noted that employees seemed to react as they would to the loss of a loved one and often treated the merger as a personal crisis. Among the subjects in Bellou's study, this sense of loss manifested itself as listlessness, apathy, a preoccupation with the past, lack of commitment to the new culture, fear, and/or active resistance to the new system. Several negative attitudes and behaviors emerged, including decreased job satisfaction, lack of organizational commitment, disloyalty, nonproductivity, an increase in defective products, mistakes on the job, and withdrawal behaviors (Bellou, 2007). Individuals may have as many social identities as they have group memberships. People who are working in an organization may derive their social identity not only from the organizations to which they belong but also from their work groups, departments, unions, lunch groups, and age cohorts. In addition to age, such demographic groups as gender, organizational level, and educational level have also been described as primary sources of identity for people in organizations. Social identities have been used in past studies as key indicators in determining job satisfaction, and several researchers having studied demographic variables and the relationship between employee job satisfaction and the M&A process (Chambers, 2008; Clinebell & Shadwick, 2004; Paviglionite, 2007; Rhea, 2004). The findings concerning the effects of the demographic variables have been mixed in these studies.

7 Despite the evidence in literature regarding the importance of post-M&A issues, these topics have generally remained secondary considerations during M&A transactions (Fish, 2007). A lack of attention to post-M&A integration has been described as a key determinant in the ultimate success or failure of the organizational M&A (Fish, 2007; Lisauskas & Lauraityte, 2004) because some degree of inter-organizational integration is necessary to achieve the intent of the deal. According to Stahl and Mendenhall (2006), the M&A process can be characterized as three overlapping stages: transaction, transition, and integration. Finally, morale and performance are two primary outcomes that are of interest to organizations (Nemanich & Keller, 2007). Morale, the human resource side of the equation, determines the extent to which employees have positive feelings about their commitment to their work and organization. A change in employee morale can occur almost instantly, or it may take place over a long time period. According to Nemanich and Keller, the combination of high performance and high morale equates to organizational success; however, high performance is not likely without positive employee morale. Research Questions Job satisfaction among U.S. bank employees who have experienced a M&A was examined quantitatively through a study employing the Abridged Job Descriptive Index (AJDI) and the Abridged Job in General (AJIG) instruments. The study was designed to address the following two research questions:

8 RQ1. To what extent, if any, can demographic characteristics predict differences in the level of job satisfaction, as measured by the AJDI and AJIG survey instruments, among bank employees who have experienced a M&A? RQ2. How does job satisfaction among bank employees who have experienced a M&A differ among particular facets of job satisfaction, including work on present job, supervision, opportunities for promotion, people at work, present pay, and the overall feeling of job satisfaction, as measured by the AJDI and AJIG survey instruments? Hypotheses The hypotheses for Research Question 1 were formulated to assess whether satisfaction in facets of the AJDI and AJIG survey instruments was related to the employees' demographic identity. The hypotheses for Research Question 2 were formulated to determine if there were significant differences in the levels of job satisfaction among particular facets of job satisfaction as measured by the AJDI and AJIG survey instruments. These facets included work on present job, supervision, opportunities for promotion, people at work, present pay, and overall feeling of job satisfaction. The hypotheses for Research Questions 1 and 2, in null and alternative form, are as follows: H1A0: There are no differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on age.

9 H1Aa: There are differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on age. H1B0: There are no differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on gender. H1 Ba'. There are differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on gender. H1C0: There are no differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on job level. H1Ca: There are differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on job level. H1D0\ There are no differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on job tenure. H1Da: There are differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on job tenure.

10 H1E0: There are no differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on level of education. H1Ea\ There are differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on level of education. H20: There are no significant differences in the levels of job satisfaction among bank employees who have a experienced a M&A among particular facets of job satisfaction, including work on present job, supervision, opportunities for promotion, people at work, present pay, and the overall feeling of job satisfaction, as measured by the AJDI and AJIG survey instruments. H2a: There are significant differences in the levels of job satisfaction among bank employees who have a experienced a M&A among particular facets of job satisfaction, including work on present job, supervision, opportunities for promotion, people at work, present pay, and the overall feeling of job satisfaction, as measured by the AJDI and AJIG survey instruments. Nature of the Study A quantitative descriptive methodology design was used to measure the level of job satisfaction among bank employees who have experienced a M&A using the AJDI and AJIG survey instruments. In the AJDI, participants reported their job satisfaction level for each of the following job facets using a Likert-type scale: work on present job, opportunities for promotion, supervision, people at work, and present pay. In the AJIG, participants reported their overall job

11 satisfaction. The independent variables for this study included age, gender, job level, job tenure, and level of education. Data from the AJDI and AJIG were analyzed using descriptive statistics, two-way analysis of variance (ANOVA) tests, repeated measures ANOVAs, multiple regression, and factor analysis. Participants, who were current employees of four banks that were involved in M&As, were asked to complete the AJDI and the AJIG survey instruments online using the interface provided at SurveyMonkey.com. It was expected that workers would express a range of feelings that would differ across the different examined aspects of their jobs, and that each of their scores would be determined by particular aspects of the work situation and have distinct relationships with other workplace variables, such as turnover (Stanton et al., 2002). The participants' responses were analyzed to determine their levels of job satisfaction and to determine which, if any, of the demographic variables affected which aspects of job satisfaction. The principal potential limitation to the methodology and design was that employees were surveyed only after the M&A process was completed. With the confidentiality surrounding a M&A, there was no opportunity to survey employees prior to the announcement being made public in order to have both pre-M&A and post-M&A measures. Significance of the Study Elucidation of the psychology of employees who have experience a M&A is of critical importance from both business and social perspectives. Although individual personalities, group dynamics, culture, strategy, and structure can

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influence organizational performance (Chattopadhyay, Tluchowska, & George, 2004), many business leaders have yet to recognize or comprehend the keys to optimal performance, particularly when overseeing merger activities. Insight into strategies that improve the chances of a merger achieving success is important for today's business leaders who seek a fair return on investment following a merge. The current study is significant for three reasons. First, this study focuses on an industry that seldom analyzes employee reactions but whose employees are influential in shaping the U.S. banking system. Second, the study's importance lies in its potential to impact the success of M&As through analyzing employee reactions to the merger by examining their levels of satisfaction with specific job facets. Literature suggests that mishandling of the merger leads to employee problems and ultimately to failure (Chambers, 2008). Finally, M&As should also be considered from the HR point of view because of the sheer number of people who are affected. Exploring the effects of M&As on bank employees is of particular worth given that 25% of M&As in the U.S. take place in the banking sector (Mylonakis, 2006). The human factor is important to consider in determining the possible success or failure of a potential M&A, because the reactions of employees could determine whether the M&A is worth pursuing (Harrison, 2005). Definitions In business publications, the words merger and acquisition are used interchangeably (Ahern & Weston, 2007; Van Dick et al., 2004; Zhu et al., 2004).

13 Because of anxiety associated with the word acquisition, bank management may use the more benign term of merger (Davies, 2003). For purposes of this study, the words merger and acquisition are used interchangeably to mean any transaction that forms one bank from two or more previous banks. Abridged Job Descriptive Index (AJDI). A survey that measures five principal subscales of job satisfaction that have been identified as important across numerous organizations. These subscales include work on present job, present pay, opportunities for promotion, supervision, and people at work (Balzer etal.,2000). Abridged Job in General (AJIG). An addendum to the AJDI survey, designed to reflect individuals' general feelings toward their jobs, encompassing all aspects of job satisfaction (Balzer et al., 2000). Acquisition. The purchase of entire companies or specific assets by another company (Ahern & Weston, 2007). Bank holding company. A company that owns two or more banks (Hagendorff, Collins, & Keasey, 2007). Economies of scale. Means of diffusing fixed costs among a large number of customers (Kasman, 2005). Economies of scope. Means of yielding more outputs with the same inputs, resulting in changes in the product mix (Kasman, 2005). Job Descriptive Index (JDI). A survey that measures facets of job satisfaction that have been identified as important across numerous organizations (Balzer et al., 2000).

Job level. The extent of responsibilities an employee has, designated as categories of semiskilled, professional, supervisory-managerial, and executive. Job satisfaction. The affective or emotional response toward various facets of an individual's job (Kreitner & Kinicki, 2007). Job tenure. The number of years a respondent has been employed at an organization. Level of education. The actual number of years of school completed (Lesowitz & Knauff, 2003). M&A. A transaction that forms one institution from two or more previous institutions (Van Dick et al., 2004; Zhu et al., 2004). Merger. Method of combining two businesses' concerns and assets into one organization (Ahern & Weston, 2007). Social Identity Theory. An individual's knowledge of belonging to one or certain social groups that have emotional significance and value to him or her (Tajfel & Turner, 1979). Summary The failures of some M&As may be attributable to the organizations' neglect and mismanagement of their employees during the M&A process (Cartwright, Tytherleigh, & Roberston, 2007). To examine this aspect of M&As further, the study presented in this dissertation used a quantitative descriptive design to measure job satisfaction levels of the participants and to determine the influence of demographic variables on job satisfaction scores. Job satisfaction scores were analyzed using the AJDI survey instrument to measure facets of job

15 satisfaction, which include (a) work on present job, (b) present pay, (c) opportunities for promotion, (d) supervision, and (e) people at work. Satisfaction with ones job in general was assessed using the AJIG instrument together with the AJDI. Recognizing and addressing factors during the M&A process that contribute to dissatisfaction, as well as those that contribute to satisfaction could result in more successful integration during M&As.

CHAPTER 2: LITERATURE REVIEW The present work aimed to assess overall job satisfaction as well as a number of satisfaction components in bank employees who have experienced a M&A. The purpose of the study presented in this dissertation was to examine several facets of job satisfaction among bank employees who were involved in a M&A, one to two years post merger, and to assess whether satisfaction was related to the employees' demographic identity, and whether there were differences among the satisfaction facets. In the development of this study, it was necessary to first examine the context of the problem. The history of bank M&As provided a framework for understanding how they have evolved over time and their influence on the banking industry. Meanwhile reviewing prior relevant studies that examined the differences in job satisfaction based on demographic variables (e.g., Chambers, 2008; Rhea, 2004) aided in the development of the present research questions. The following literature review provides conceptual framework for the dissertation study grounded in relevant literature. Specifically this chapter addresses the following topics: (a) the history and business climate of bank M&As, (b) the impact of M&As on employees, (c) the relationship between demographic variables and employee job satisfaction, and (d) the M&A process and integration. History and Business Climate of Bank M&As The history of bank M&As provided the framework to show how they have evolved and their influence on the banking industry. Past researchers

(Chambers, 2008; Rhea, 2004) have provided a foundation for examining the differences in job satisfaction based on demographic variables and aided in the development of the research questions. Influence of Current Events Prior to 2008, a strong economy and deregulation led to soaring bank profitability and capital positions and an increase in M&As relative to prior eras (Cocheo, 2008). At the same time, however, the deregulation of products and markets intensified competition among banks. Technology has increased mergers in the banking field and set the stage for conglomerate entities in the field (Cocheo, 2008). According to Hagendorff et al. (2007), the U.S. financial sector has witnessed the largest share of recent M&A activity. However, according to Rosta (2008), the 2008 M&A volume was off pace from 2007, with only 42 bank-merger deals announced during the first quarter of 2008, roughly half of the 86 announced in the first quarter of 2007. Rosta suggested that the seizing of the credit markets, tumbling bank-sector share prices, and declining profitability all played a role in the decline in M&As. Bank leaders are still working to resolve their exposures to subprime lending and their financial conditions. Morgan (2009) reported that in the first half of 2009, there were only 72 announced transactions in the banking industry, down from 109 deals in the same period a year earlier. Morgan predicted that this decline would flatten out or reverse by the end of the 2009, driven by banks' continued need to raise capital.

18 According to McGill and Sheehan (2008), few industries have encountered as much strategic change in the past 5 years as that experienced by the financial-services sector. This transformation involves the shake-up of internal structures, such as management, processes, and employee relations. These transformations in the banking industry's organizational structure can be attributed to changes in regulatory requirements and technological advancements. The main factors in the decision for banks to mergediversification and product mixwere once restricted by the government. However, over the years, such legislation as the Riegle-Neal Interstate Banking and Efficiency Act of 1994 has allowed banks to use M&As as key strategic activities. Mergers and acquisitions have now become the most dramatic demonstration of vision and strategy in the banking sector in both developed and developing financial markets. Mergers are strategic in nature in that they are generally aimed at global competitiveness. Morgan (2009) concluded that banks pursing M&As are trying to expand their global reach, brand concentration, and economies of scale. These motives are aimed at increasing shareholder value and eliminating competition. Mylonakis (2006) determined that the real value of M&As depends on the competitive advantage that the transaction creates for the bank. Many small bank institutions merge or acquire other banks due to fear of being vulnerable to acquisition deals themselves and thus gaining a better chance of surviving financial turmoil (Cocheo, 2008: Rosta, 2008). The financial crises of 2008 precipitated a sudden tightening of credit. Banks' operations rely

19 on remittance of funds from loan customers. If something changes in the expectations of repayment, then banks must seek additional funding in order to pay back their depositors. According to McGill and Sheehan (2008), banks are turning to M&As as a business strategy and a way to stay in business through the subprime lending meltdown. Banks seek to diversify in order to reduce risks and increase returns, and geographic diversification in particular is used to obtain greater market power (Cocheo, 2008; Rosta, 2008). Mergers should result in less competition and possible increased profits for the acquiring bank (Rosta, 2008). Banks may want to merge to increase their asset size in order to become 'too big to fail'. According to Benton's (2004) deposit-insurance-option-enhancing hypothesis, larger banks have a higher probability of the FDIC covering all of their deposits than small banks. Thus through growth by means of mergers, banks can increase their potential returns without increasing their risk because of the implied government-safety cushion. This theory has been proved a worthwhile one with the $700 billion bank bailout plan approved by Congress in 2008 and the increase of the FDIC deposit coverage from $100,000 to $250,000 per customer (Cocheo, 2008). History of the Banking Industry Passed in the midst of the Great Depression, the Banking Act of 1933 restricted both the product mix and the geographical scope of credit institutions. More specifically, the Glass Steagall sections (20, 32) of the Act governed a strict separation of commercial and investment banking. These measures were taken

in response to what regulators deemed inevitable conflicts of interest when a bank holds equity in the same firm whose debts it underwrites. The Banking Act transferred branching regulations to the state level because each state had different degrees of restrictions. Legislation discouraged interstate branching and, in some cases even intrastate branching, in order to limit concentration in the banking sector (Hagendorff et al., 2007). The introduction of bank-holding companies (BHCs) in the 1960s offered credit institutions a way to overcome the product and geographic specializations that bank regulations had imposed on them. Hagendorff et al. (2007) noted that branches located in different states could be reorganized as individual bank subsidiaries under a multi-bank holding company. Under the BHC framework, banks could also diversify into credit card operations, mortgage lending, and, because of a Supreme Court ruling in 1987, a limited amount of securities activities. This regulatory framework created a banking system with an unusually high number of institutions operating in a market that was highly fragmented along regions and in terms of financial products (Becher & Campbell, 2005). As this framework was abandoned by policymakers during the 1990s, the U.S. financial sector underwent a dramatic transformation that saw the emergence of both nationwide branching and universal banking. The Riegle-Neal Interstate Banking and Efficiency Act of 1994 eliminated restrictions on interstate banking, and the Gramm-Leach-Biley Financial Modernization Act of 1999 repealed the

Glass-Steagall restrictions. Universal banking was thereby effectively introduced to the U.S. (Hagendorff et al., 2007). During the 1990s, the banking industry led all other industries in merger frequency, and consolidation within the industry greatly reduced the number of BHCs. Becher and Campbell (2005) explained that the reduction in interstatebanking restrictions allowed banks to acquire other banks and process transactions across states. Interstate merging operations allowed banks to minimize their processing expenses and reduce other operating inefficiencies. These conditions have given banks an unprecedented opportunity to diversify in terms of banking products and locations. Future of Bank MSAs The future of bank M&As will be affected by government regulatory orders as some banking institutions will initiate M&As before being forced to merge (Cocheo, 2008). When these institutions have difficulty initiating M&As, buyers will wait until these institutions fail or are about to close before beginning the acquisition process. Many analysts believe funds from the U.S. government's $700 billion bank-bailout plan will be distributed to the strongest financial institutions, with the aim of increasing consolidation among banks and protecting the government from having to salvage some of the industry's weakest players (Cocheo, 2008). Thus if small banks intend to survive the current financial crisis intact, there is an impetus upon them to grow through the acquisition of other banks (Rosta, 2008).

22 Mergers and acquisitions will continue to take place in efforts to reap the benefits of higher profitability and to sustain their livelihood; however, M&As are not without their pitfalls. Sperduto (2007) concluded that when M&As are announced, the preliminary research conducted by the acquiring entity is focused on the financial particulars of the transaction, the financial health of the entity to be acquired, and the potential return to be realized if the transaction is consummated. Little attention is placed on the personnel who will be acquired. According to Sperduto, bank leaders are more concerned about the balance sheet than about the consolidation effect on employees because leaders may fail to recognize the value of the employees in the profitability of the industry. Mergers and acquisitions should also be considered from the HR point of view because of the sheer number of people who are affected. Exploring the effects of M&As on bank employees is of particular worth given that 25% of all M&As in the U.S. take place in the banking sector (Mylonakis, 2006). The human factor is important to consider in determining the possible success or failure of a potential M&A, because the reactions of employees could determine whether the M&A is worth pursuing (Harrison, 2005). The Impact of M&As on Employees Historically, M&As have been based on economic and financial assessments. Bank owners are focused on business performance criteriasuch as bank size and growth, economies of scale, profitability, return on shares, and increases in market share and market power (Harrison, 2005). Although these factors are important in determining the success or failure of the M&A, a growing

concern deals with the employees involved in the process. There are several reasons for bank M&A failures, some of which involve employee factors: 1. Lack of vision. A lack of vision underlies the growth strategies of many banks that believe that increasing the bank's size through M&As will bring a sustainable competitive advantage and generate above-average financial performance. This inadequate vision not only produces no synergies but also endangers the perspective of the whole attempt (Kalpic, 2008). 2. Unification failure. There is an inability to arrive at a quick and successful unification of the two banks. This inability refers to the unification of two different bank cultures and their financial and control systems, as well as the effort to create successful cooperation between the managerial executives of the two banks (Mylonakis, 2006). 3. Culture incompatibility. Although the compatibility of the cultures of the two banks is a determinant factor of the success of the M&A, culture is a failure factor that is largely ignored (Terranova, 2007). Tension is caused between the personnel of the acquiring bank and those of the acquired bank because employees do not know whether they will maintain their positions or be fired. In addition, Mylonakis (2006) concluded that the employees in the acquired bank seemed to have a prejudice against the acquiring bank, believing that they could be treated unfairly if they do not accept the stated purpose of the M&A and the acquiring banks' objectives. The formation of the new bank causes a collision of the two cultures and creates disputes about which bank culture will prevail.

In recent years, some attention has shifted toward human resource concerns, the cultural ramifications of merger activity, management of the overall combination process, and specific efforts aimed at postcombination integration. Employees are expected to implement the goals of the newly merged or acquired bank and convince customers of the quality of the services offered (Mylonakis, 2006). In financial services, personal relationships and trust between the bank employees and the customers are paramount. The morale and job satisfaction of the bank employees affects their relationships with the customers and the overall customer satisfaction with the bank. Lack of Human Resources Ajjarapu (2004) reported that only 30-40% of all M&As are successful and concluded that one of the main reasons for the failure of M&As is the neglect of HR by the banks. Dixon and Nelson (2005) concluded that HR professionals are often not included on M&A teams, which are typically comprised of people from finance, information technology, and other disciplines viewed as essential to completing the M&A process. According to Stahl & Mendenhall (2006), unsuccessful M&A integration is fast becoming the norm. This failure may be due, at least in part, to an underestimation of the importance of HR departments to the success of a merger. According to Antila and Kakkonen (2008), top management's low expectations with regards to the strategic contributions of the HR function seem to have contributed to the limited HR role in the postmerger change process. However, Ajjarapu (2004) noted that organizations on the verge of integration

should analyze the feasibility of integrating key players from the HR component of the organization. Paviglionite (2007) reported that 80% of mergers failed at the implementation stage because they had inadequate merger road maps and/or brought in senior HR professionals too late in the implementation stage. Gaughan (2005) concluded that HR departments in today's organizations are practical and strategic. They can add value for companies through training development, managing personnel conflict, reinforcing the new HR system and corporate culture, and providing leadership and communication to reduce turnover. These actions are critical during M&As. The Employee Factor Organizations' failure to take into account the needs of their employees during M&As may contribute to disappointing results (Cartwright et al., 2007). The employee aspects of M&As have been studied from a variety of perspectives. Whereas a body of research has focused on the impact of cultural differences between the combining organizations (Paviglionite, 2007; Schreyogg, 2006), others have focused on a more extensive range of integration process variables, such as trust, communication, teaching transfer, and fairness of treatment (Range, 2006). In addition, as elaborated below, the use of the social identity framework in institutions undergoing M&As has been examined (Van Dick etal., 2004). Social Identity Approach The social identity approach, which addresses the framework for the relationship between the individual and the group, is a starting point for

examining group-level reactions to M&As. This approach encompasses two distinct theories: the original social identity theory (Tajfel & Turner, 1979) and the more recent self-categorization theory (Turner, Hogg, Oakes, Reicher, & Wetherell, 1987). Both theories are based on the assumption that individuals define themselves in terms of their social-group memberships and that groupdefined self-perception produces distinct effects on social behavior and intergroup relations (Turner et al., 1987). These theories posit that the more an individual perceives himself or herself in terms of membership in a group or identifies with the group, the more of his or her attitudes and behavior will be governed by this membership. Social identity principles have been increasingly applied in studying organizational psychological processes. Chan (2006) concluded that organizational commitment is linked to identification. When employees have favorable attitudes toward an organization, they are likely to be attached to the organization, and their continued commitment could be influenced by factors such as benefits, status, and monetary and interpersonal rewards. For instance, affective organizational commitment has been linked to positive employee behaviors, such as organizational citizenship behaviors and helping behaviors (Tschannen, 2004). On the other hand, the positive relationship between empowerment and organizational commitment disappears when employees experience high levels of conflict and change (Janssen, 2004). Chan concluded that examining identification and commitment in a development context is

important in understanding the dynamics of organizational membership and social identity. Few studies have examined in detail organizational identification in the context of M&As. Employees of the low status, pre-M&A organization have been found to have lower levels of post-M&A identification than the employees of the high-status organization and to engage in more in-group bias (Terry et al., 2001; Terry & O'Brien, 2001). Strong identification was found to be related to reduced in-group bias and to high levels of organizational commitment, job satisfaction, and emotional well-being (Terry et al., 2001). Furthermore, an investigation of the role of status differences between pre-M&A organizations as the main predicting variables of identification indicated that employee identification with the new organization is a factor contributing to the success of a merger. The focus on status in these prior studies may have some limitations in terms of the managerial implications. Because of their static and unchangeable nature, factors such as individuals' organizational status, the size of the organization, and organizational trauma cannot be effectively managed and influenced during the merger process (Lipponen et al., 2004). Organizational Trauma Mergers and acquisitions often create significant trauma for the employees and managers of both the acquiring and acquired firms, sometimes resulting in attitudinal and productivity problems and turnover of valued personnel. Cartwright et al. (2007) noted that negative reactions may lead to lower levels of job satisfaction and job security and less favorable attitudes

toward management. Employees often cope with the uncertainty surrounding a merger by reducing levels of commitment and focusing their energy instead on coping with anxiety and confusion or trying to find new employment opportunities. These feelings appeared to manifest as lowered job commitment and productivity, increased job dissatisfaction and disloyalty, high turnover among key managers, leadership and power struggles among the managers who stay, and, in general, a rise in dysfunctional work-related behaviors at all levels of the hierarchy (Cartwright et al., 2007). Astrachan's (2004) findings suggest that employees who remain in an organization undergoing a merger may feel betrayed by their leaders, and their negative feelings may result in a drastic change in their work patterns. The effects can include relatively minor personnel matters, such as an employees' refusal to relocate, subtle slowdowns in work activity and lowered work goals, increases in turnover, employee theft, and even attempts to sabotage corporate efforts. These repercussions may be attributed to the separation anxiety (discussed below) that is often experienced by employees (Astrachan, 2004). Separation Anxiety According to Astrachan (2004), separation anxiety can have a profound impact on employees going through M&As. Separation anxiety is a distinctive anxiety associated with the frightening situation of having a relationship change drastically or end. The researcher concluded that this cognitive-emotional state is caused by cues of impending separation and occurs before separation actually takes place or when separation is implied. In a survey of 1,500 HR managers,

Beylerian and Kleiner (2003) found that morale had severely declined in 31% of the companies that had downsized during a M&A process and that 48% of such companies' representatives indicated that morale had worsened. Nearly 40% of the respondents related that workforce productivity had sagged following the M&A, with only 18% reporting that their companies' productivity had not been affected. Other surveys conducted by these researchers uncovered additional undesirable implications of the M&A: greater absenteeism, the initiation of job searches, and the acceptance of subsequent external offers. M&As as a Form of Change Following M&As, a complex set of organizational, managerial, and personnel changes is inevitable. Often, the questions raised by employees are not focused on whether there will be management and organizational changes, but rather on how extensive those changes will be and how quickly they will take place. Although there may be a consensus that change is a reality of M&A activity, there is considerable disagreement about the rate and amount of change that should occur. It seems that because employees expect change, telling the employees that little change will actually occur undermines the credibility of top management. Trying to push for change too quickly, however, can generate resentment, dissatisfaction, and the loss of key personnel. The basic question that needs to be addressed by management is what actually constitutes too much change. When the intention to merge with or acquire another firm is announced, change is considered inevitable, and normal business processes and activities

begin to break down as a period of tumult sets in (Astrachan, 2004). Change is often associated with anxiety, tension, and resistance. According to early work by Lewin (1947,1951), which continues to serve as the basic foundation for most organizational change models, successful change efforts occur in three basic stages. In the first stage, a set of relevant attitudes, values, and behaviors have to be unfrozen before a change can successfully occur. In the second stage, the desired changes are implemented. And in the final stage, the changes are refrozen in the new state. If an organization's management does not take the time and effort to prepare the groundwork for the change, some degree of resistance is the likely outcome. According to Buono and Bowditch (2003), much of the tension underlying the human side of M&As can be attributed to five key concerns and dilemmas, each having a strong ethical component. The first concern is regarding the emergence of competing claims from the multiple parties involved in the M&A. Historically, this conflict has been framed in terms of the investment of the stockholders of the acquiring and acquired firms. The second concern is distinguishing truthfulness from secrecy and deception in merger-related communication. Although the tendency is to carry out all negotiations and discussions in secret in order to minimize uncertainty among organizational members, it seems that creating formal internal communication mechanisms as early as possible may limit the anxiety otherwise fueled by rumors, the office grapevine, or outside news reports (Stahl & Mendenhall, 2005). Managers, however, face a number of legal and operational dilemmas that influence

31
decisions about information sharing. Because M&As typically produce high degrees of stress and confusion for employees, managers should be given a great deal of information about the M&A (Buono & Bowditch, 2003). The third concern identified by Buono and Bowditch (2003) is the distinction between coercionforcing people into certain situationsand participationoffering a true opportunity to take part in discussions and decisions. Although most pre-merger communication about postmerger integration emphasizes the importance of participation in bringing about organizational change, research has shown that the process is usually tightly controlled by top management. That is, merger-related restructuring is often done to, rather than done by employees (Stahl & Mendenhall, 2005). Because of the chaotic events and bursts of activity that generally accompany a M&A, the opportunity for enlightened management of people in the change process is often lost. The fourth concern addresses the handling of grief, loss, and termination. During M&As, employees experience conflicting emotions ranging from shock, disbelief, anger, and helplessness to hope, excitement, and high expectations about the future. Buono and Bowditch (2003) concluded that, depending on how the acquisition unfolds and the experiences of employees, individual reactions can vary widely. The final concern is the level of respect afforded to employees and other key constituents as individuals. The acquiring organization has a moral obligation to treat members of the acquired organization with dignity and respect. Still, in large-scale organizational change, employees are often viewed as mere

replaceable parts in the overall business process. As a result, the respect and dignity employees might normally be given are neglected for the greater good that is projected to result from the organizational change (Stahl & Mendenhall, 2005). Change Management The organizational reorganization characteristic of M&As represents a major transformative event for the companies and their employees. In his seminal study of the underlying causes for variation in acquisition performance, Kitching (1967) stressed the importance of attentive management in order to direct this kind of change, suggested that installing change managers to handle critical areas was important to accomplishing the tasks of the acquisition, and stressed the need to establish effective management relationships between the acquiring and acquired companies. While Kitching was insightful to emphasize the importance of controlling change management efforts in the postacquisition period, more recent M&A research has gone on to take into account not only control-based value creation but also a variety of integration processes through which those synergistic benefits are realized (Stahl & Mendenhall, 2006). Two problems are inherent in the change process: the complexity of the change processes that are involved and the inevitable secrecy that surrounds merger deals. Morrell et al. (2004) argued that change processes will be fraught with difficulty if there is not an accepted and understood need for change with accompanying urgency. According to Stahl and Mendenhall (2005), managers on both sides of a M&A have little time to prepare themselves for the challenges

ahead, especially if they have had no prior experience. The researchers concluded that integration involves many challenges, such as combating the winner-loser syndrome; preparing the employees for change; managing the dangers of the first 100 days; setting up a transition organization; and putting in place the new structure, policies, and practices. An adage addressing change processes notes that people do not resist change; instead, they resist being changed. Morrell et al. (2004) concluded that, if people are not involved in the change process, the integration process will be slow. According to Stahl and Mendenhall (2005), rather than applying change theories and concepts to the M&A, researchers might think of mergers as an arena for the development of new theories of complex organizational change, thereby pushing the understanding of change processes beyond the established notions of change management. Finally, Fish (2007) concluded that while most employees react negatively when their companies are acquired, the strength, duration, and dysfunctional effects of such reactions vary greatly among different M&As. Such variation is largely due to the different organizational integration approaches used but may also be attributable to the striking differences in perspectives on the human side of the M&As (Lisauskas & Lauraityte, 2004). Employee Reactions Paviglionite (2007) proposed that employees' responses to the M&A ranges from loyalty or support for the M&A, through compliance or voicing opinions, to neglect of current responsibilities and other dysfunctional behaviors. The researcher argued that employees' reactions are primarily derived from the

cost-reward analysis of the behavior, the effectiveness of the behavior, the employees' expectations of the M&A, the trust in management after the acquisition, and the employees' job commitment. In addition to employee reactions and behaviors, Carr, Elton, Rovit, and Vestring (2004) outlined antecedents of employee attitudes that stem from the acquisition process. The initial due-diligence process in terms of the employees can set the tone for information exchange and feelings between the two firms. With regard to communication, researchers have agreed that merger information delivered in a timely manner can create a climate of security and certainty (Paviglionite, 2007; Stahl & Mendenhall, 2005). According to Paviglionite (2007), other factors of the due-diligence process include the degree of integration, the pace of change implemented, and the degree of employee participation. The researcher concluded that organizational characteristicsincluding differences in culture; management style; and individual characteristics of employees such as age, length of service, education, hierarchical position, stress, and personality typealso influence employee attitudes. Stahl and Mendenhall (2005) identified several distinct perspectives on the reactions of employees to the M&A. One such perspective viewed the reactions in terms of cultural clashes between the different corporate cultures. Another common perspective views employee resistance as stemming from communication problems such as lack of information, misunderstanding, interpreted threats, and negative rumors. Solutions for reducing employee

35 resistance in this regard include offering more precise, extensive, and true information early and building teams. Finally, a perspective focused on individuals views employee reactions in terms of career implications, suggesting that employees resist the M&A because of anticipated or actual negative effects on their own careers or working lives. According to Fish (2007), morale and performance are the two primary outcomes of interest to organizations. Morale, the HR side of the equation, defines the extent to which employees have a positive feeling about and commitment to their work and organization. A change in employee morale can occur almost instantaneously or over a long period of time. Ultimately, Fish argues, a combination of high performance and high morale equates to organizational success. The link between successful planning and integration of HR issues during the M&A and attainment of key business objectives should not be ignored. Postacquisition integration, the phase in which most of the departments and employees are being integrated, poses the highest threat to acquisition success (Vasilaki & O'Regan, 2008). Postacquisition integration is primarily concerned with the integration of organizational cultures and employees, and management has a crucial role in this process. According to Vasilaki and O'Regan, management is responsible for facilitating the integration and generating high levels of satisfaction among different groups of employees. Mergers and acquisitions profoundly change the employees of an organization and the organization's ability to be successful. Davies (2003) made the case that

companies sabotage their mergers by repeatedly making the same basic mistake of neglecting the human element. During post-M&A phases, organizations have opportunities to make choices that will either positively or negatively affect their employees. Such choices may be better informed if bank leaders have an understanding of their employees' demographics and how those demographics may influence job satisfaction patterns. Relationship Between Demographic Variables and Job Satisfaction Individuals may have as many social identities as they have group memberships. People who are working in an organization may derive their social identities from the organization and from their work groups, departments, unions, lunch groups, and/or age cohorts. Demographic groupings such as gender, age, organizational level, and educational level have been described as primary sources of identity for people in organizations and have been used in past studies as key indicators in determining job satisfaction (e.g., Chambers, 2008; Clinebell & Shadwick, 2004; Collins, 2005; Jensen & Zajac, 2004; Rhea, 2004). Since it was first applied to general populations, the demography theory has generated considerable interest because of its theoretical importance in the study of organizations (Stinchcombe, McDill, & Walker, 1968). Pfeffer (1983) described the importance of the demographic approach as an important, causal variable that influences a number of intervening variables and processes and, through them, a number of organizational outcomes. Stinchcombe et al. found that the demography theory might explain more variance in the dependent variable than would the presumed intervening constructs, which often include

37 underlying mental processes (i.e., employee attitudes toward risk) because some characteristics of interest do not have analogous psychological measures. For example, a manager's length of time on a team could influence interaction patterns with others that might be difficult to determine with a psychological measure. Further advantages of demography are objectivity, parsimony, comprehensibility, logical coherence, predictive power, and testability (Hambrick & Mason, 1984; Pfeffer, 1983). To properly understand the influence of team demography on strategic decision outcomes, it is important to differentiate between trait and diversity effects. Research on group problem-solving has suggested that both the characteristics (traits) and the variety (diversity) of cognitive resources are central to understanding group performance (Hoffman, 1959; Hoffman & Maier, 1961; Triandis, Hall & Ewen, 1965). With regard to trait effects, the extent to which a member has a certain demographic characteristic predicts his or her perspective and interpretations. Demographic and job characteristic questions have served as independent variables in several research studies (Chambers, 2008; Clinebell & Shadwick, 2004; Collins, 2005). The independent variables in this study were chosen because the literature review revealed them to be possible predictors of job satisfaction. The following paragraphs discuss the rationale for including each independent variable in this study.

Independent Variables Age. Age is a common demographic question asked in organizational studies (Lajoux, 2007). The ages of respondents are important for studying the acquisition process because age can be a determining factor in an individual's willingness to change. Rhea (2004) concluded that a person who is young and without many responsibilities may feel more willing to change and less threatened by the acquisition. An older person may have more at stake in the company, community, and family, and thus be less tolerant of the change process. Research has suggested that flexibility decreases and that rigidity and resistance to change increase as people age (Lajoux, 2007; Rhea, 2004). Gender. Gender is a commonly used variable in research studies of employee perceptions because men and women are thought to have different responses to acquisitions (Collins, 2005). Indeed Chambers' (2008) findings suggested that women may participate in the acquisition rumor mill more than men and have different opinions regarding the acquisition process. Job level. A person's job level or job classification is also commonly taken into account in organizational behavior research. Jensen and Zajac (2004) concluded that different members in an organization's hierarchy have differential access to important information and communication regarding the M&A. Furthermore, persons holding some job titles are actively involved in building the new organizational culture following an acquisition, while those with other job titles are excluded from the process. Thus, it appears logical that members of different job classifications may have different attitudes regarding the M&A.

Job tenure. The number of years a person has been employed at the affected organization may affect his or her attitude towards change. Chambers (2008) concluded that the longer a person is employed in one industry, job, or corporation, the greater the attachment. Any threat to that employment may create resentment; and highly tenured employees may be less willing to change during the M&A process. Level of education. Respondents' educational levels are another important factor in determining attitudes toward the M&A. Historically, educational attainment had an important influence on employee perceptions. According to Berdahl and Moore (2004), the main reason for analyzing education in the M&A process is that more highly educated individuals usually have more job opportunities and may feel less insecure about losing their jobs and not having other employment. Hence, more educated individuals may have less negative attitudes toward an acquisition (Chambers, 2008). Recent Research Studies Several researchers have recently examined the relationship between respondents' job level within the organization and job satisfaction. Clinebell and Shadwick (2004) presented the results of a study of employees at three different branch banks that had gone through M&As in which they had hypothesized that job satisfaction would be lower for entry-level employees. They concluded that job satisfaction did indeed differ between job levels. More specifically, they found that entry-level employees had lower levels of job satisfaction and that those employees closer to the leadership system (supervisors and managers) felt more

included in the M&A process and had higher levels of job satisfaction. Rhea (2004) conducted a study on employee job satisfaction at a community college after a M&A and evaluated the relationship between age and job satisfaction. Rhea hypothesized that there were no differences in job satisfaction with respect to age, and ultimately found no significant differences between groups with respect to age. Although findings from previous studies examining the interaction between demographics and job satisfaction have been mixed, it is important to study the relationship of demographics and job satisfaction to determine whether demographics influence job satisfaction or whether the resulting positive or negative job satisfaction is related to the M&A (Stahl & Mendenhall, 2005). Although the results of demographic studies vary, researchers have concluded that integration is a prominent factor in the success or failure of the M&A (e.g., Sperduto, 2007; Stahl & Mendenhall, 2005). M&A Process and Integration According to a recent study by Sperduto (2007), more than 70% of bank M&As fail to produce the intended results. Reasons for failure include overpayment and miscalculation of the deal, miscalculation of strategic fit, unanticipated shifts in the economy or markets, and poor transition planning. However, Lesowitz and Knauff (2003) attributed the high failure rate of M&As to flawed or incomplete integration, including aspects concerning people, processes, and cultures. Lesowitz and Knauff claimed that strategies for addressing people issues still tend to be little more than a few team-building

41
exercises before the process is turned over to the accounting and administrative personnel. Larsson (2005) suggested that organizational culture clashes are substantial barriers to synergy realization in M&As. Larsson proceeded to argue that employee resistance is an important determinant of synergy realization and that employee resistance increases when proper attention is not given to valuing the respective cultures of the merging organizations. This resistance can lead to postmerger drift, a condition in which a lack of agreement on or investment in cultural norms leads to confusion, unnecessary anxieties, and unrealized economic benefits expected by those who initiated the deal. Despite the evidence in the literature indicating that post-M&A integration issues are important, integration remains a secondary consideration during many M&A transactions. Leaders and managers involved in corporate combinations often report negative integration experiences and resistance to future participation. Slowinski et al. (2002) concluded that these responses stemmed from four issues: (a) poor organizational learning, (b) weak support from senior management, (c) lack of established best practices, and (d) ineffective metrics, tools, and techniques. Slowinski et al. further indicated that, in 80% of M&As, the combining companies failed to consider integration operations at any time during the transaction. Indeed a lack of attention to post-M&A integration issues may be a key determinant in the ultimate success or failure of the M&As (Lisauskas & Lauraityte, 2004). Fish (2007) found that the two primary reasons for M&A failures centered on integration: (a) inadequate integration planning and (b)

cultural incompatibility. Moreover, Fish found that proper use of post-M&A integration planning policies increased the probability of success by up to 50%. Processes of M&A Integration During the M&A, management often becomes overwhelmed with the reality of running a newly combined company while simultaneously integrating the former business entities. According to Fish (2007), critical logistical aspects of the integration process typically do not surface until just prior to integration implementation, causing management to focus on the financial aspects of the deal at the expense of the integration process itself. When uncertainty and ambiguity are carried over to the integration phase, dysfunction and disruption can emerge and reduce the probability of a successful merger (Lisauskas & Lauraityte, 2004). In a study examining the current state of M&A integration, integration dynamics, and common pitfalls in the M&A integration process, Galpin (2008) found that 68% of survey respondents indicated that the companies' integration efforts were average or below average, while only 33% reported that their companies completed integration within the critical first 12 months of the deal closing. About two-thirds (67%) of respondents reported that it took their companies from 1 to more than 5 years to complete their integration efforts, and almost half (49%) of survey respondents indicated their company was suffering from a poor M&A integration process. In light of the importance of M&A integration, Galpin (2008) concluded that, to receive the most value from a M&A, emphasis must be placed on the

successful integration of people, processes, and systems because the primary risk from a lack of integration is that the organizations will fall apart and destroy their value rather than merge successfully. Management should ensure that the organization's M&A integration processes and capabilities are in place before agreeing to a merger by selecting the management team, resolving cultural issues, and improving communication. Galpin's integration approach aims at preserving the existing values of the joining firms with minimal intervention. Accordingly, organizational integration should be allowed to develop slowly as the joining firms learn about each other and gain mutual trust. Stahl and Mendenhall (2005) concluded that successful integration geared at minimizing employee resistance does so by sacrificing integration efforts to placate the acquired employees. In their view, hard or controlling integration approaches attempt to crush possible cultural clashes and employee resistance as quickly as possible by immediate, forceful, and one-sided implementation of the acquirer's methods of operating. In their approach, synergy realization requires substantial organizational integration, which should be implemented expeditiously to reduce uncertainties, take charge, and not lose momentum. Alternative views of integration dynamics have been posited. In a study focused on M&A integrations, Carr et al. (2004) described the following four existing avenues used to achieve integration: (a) prioritization of integration during due diligence, (b) rapid integration of the key financial driver areas, (c) focus on cultural integration, and (d) devotion of no more than 10% of

employees time to the M&A process. These different approaches comprise a M&A integration dilemma. Integration Approaches The integration method employed will naturally vary depending on the strategic intent of the acquisition, the synergies to be captured, and the types of assets and personnel involved. A framework developed by Schweiger (2002) classifies the levels of integration into four primary approaches: 1. Consolidation is the most invasive approach in terms of integrating the cultures, processes, functions, and activities of separate entities into one fully consolidated organization. 2. Standardization, which is less invasive than Consolidation, takes a bestpractices approach to organizing operations and processes, using formal plans and procedures to ensure that skills, processes, performance management systems, and so forth are transferred across merged operations. This approach may benefit from some immediate cost reductions and long-term revenue generation synergies, but standardization relies heavily on transferring knowledge and best practices across the combined entities. 3. Coordination of functions and activities attempts to blend the existing and acquired methods of business in a noninvasive manner. 4. Intervention requires immediate changes in systems, management, and/or processes in order to correct an undesirable or entity-threatening situation.

According to Stahl and Mendenhall (2005), the major reason for an integration approach dilemma not being easily solved is that both sides are right about the other approach being inadequate, and both are wrong about their own approach being the best. The researchers showed that neither the soft nor the hard approach is systematically successful in realizing M&A synergies. Although the soft approach sacrifices the necessary organizational integration requirement, the hard approach sacrifices the equally necessary requirement of minimal employee resistance. The researchers found that, as long as the integration process is merely viewed in terms of soft versus hard approaches, M&As present situations that can explain many of the difficulties encountered by corporate merges HR Integration Activities and the M&A Process Among the several different approaches to post-M&A integration, Stahl and Mendenhall (2005) provided an integration process based on the business stages of the M&A. Following the M&A transaction, some degree of interorganizational integration is necessary in order to achieve the intent of the deal. Stahl and Mendenhall (2005) characterized the M&A process as three overlapping stages: transaction, transition, and integration. Transaction stage. The transaction stage characterizes the period during which valuations, synergy estimations, pricing, due diligence, and negotiations take place. According to Stahl and Mendenhall (2005), during this stage, the buyer or merging partners attempt to gather enough information on the other firm to decide whether or not to close the deal and to determine the terms under

which the deal should be consummated. In addition, the transaction stage is a time for assessing the presence of synergies and the organizational integration issues that will have to be managed to achieve synergies. This stage includes establishing a constructive environment for successful integration, including addressing any technical, political, or cultural issues, and ensuring that the values of both the acquirer and the target are preserved. Stahl and Mendenhall (2005) noted three key activities that need to be managed during the transaction stage because they can have a direct impact on value preservation and realization by (a) providing insight into the value of a target firm or merger partner, (b) offering understanding of the source of that value and its sustainability, (c) identifying issues that must be managed to preserve value and realize synergies, and (d) guiding the behaviors and attitudes of the groups involved in the transaction stage. These key activities are as follows: 1. Human resource departments need to gather as much information as possible on the HR practices and employees of the combining companies, including head counts and staffing, salaries, compensation and benefits, pension systems, training and development, labor relations, performance-management systems, organizational cultures, and other HR functions (Stahl & Mendenhall, 2005). The objective in gathering this information is to understand the costs and liabilities associated with the M&A and any practices that might create integration roadblocks. According to Stamos and Forsythe (2008), undetected liabilities may lead to unanticipated decrements in future cash flows and value leakage, and

unanticipated roadblocks may either slow or prevent successful integration. The earlier such information can be collected, the better; however, Stamos and Forsythe warned that the reporting of the initial costs could make it more difficult to maintain confidentiality about the transaction. Currently, direct costs, such as investment banking fees, accounting fees, and legal fees, are capitalized as part of the business combination, but acquisition-related costs need to be accounted for separately in the business combination. The researchers concluded that, if the entire cost of a M&A is not recognized, the roadblocks may be severe enough that a deal should be eliminated. 2. The culture of the target firm should be assessed because cultural differences between merging firms are a source of conflict (Stahl & Mendenhall, 2005). An acquirer should assess the cultures of both the target and itself to determine how important the cultures are to the merger, whether differences are so severe that a deal should be stopped, and whether interventions can be employed that can ensure that differences become a source of value rather than destructive conflict. According to Van Der Weil and Cole (2008), many M&As have failed to realize their strategic objectives because of poor cultural fit and subsequent conflicts between an acquirer and a target. Often, management considers culture to be too soft to assess because it does not have the precision of financial analyses or the excitement of potential synergies. Nevertheless, partners in a merger should move quickly to create one culture. 3. Both an acquirer and a target must identify and assess people who might be important to either the success of the transition or the long-term viability

of the combined organization (Stahl & Mendenhall, 2005). Without qualified people, an organization cannot function effectively. Efforts should be focused on retaining people who are critical to the future success of the combined company. An orderly and fair process of selection based on performance and competence is far superior to one that seeks a balance in numbers of employees retained between the two companies (Morrell et al., 2004). Transition stage. According to Stahl and Mendenhall (2005), the transition stage begins when the inquirer or merging partners announce a deal or sign the M&A agreement. This stage marks the point at which both parties are serious about making the deal and are serious in detailing how they will put it together. It is also a point at which the integration of the firms can be considered and planned for. During transition, maintaining secrecy will become somewhat difficult because more people are likely to become involved in the deal and speculation will probably occur among employees, customers, and other key stakeholders concerning the deal and its implications for them (Morrell et al., 2004). For the transition stage, Stahl and Mendenhall (2005) offered the following four objectives: 1. Ensure that the activities conducted during this phase continue to create a constructive environment for successful integration. 2. Ensure that the value of both the acquirer and the target or merger partners are preserved.

3. Ensure that any preliminary integration analyses and assessments begun during the transaction stage are either completed or conducted in more depth. 4. Conduct the integration planning process. During the transition stage, there are a number of integration and HR activities. The objectives of Stahl and Mendenhall's (2005) approach are intended to ensure that critical knowledge from the combining organizations is captured and used, that decisions ensuring a more competitive company after the integration are followed, that people needed in the new organization are retained and motivated, that necessary changes to one or both organizations are made, that value is preserved, and that synergies are captured. Articulation of integration guiding principles. Stahl and Mendenhall (2005) concluded that, because so many people are involved in the numerous activities during the transition stage, it is impossible to control all the activities. Guiding principles should be developed to ensure that the basic philosophy underlying the integration is understood and that the decisions and behaviors of those involved are in concert. Those employees participating in the integration process should be held accountable for the behaviors reflecting these principles. The researchers found that integration efforts tend to address the following issues: (a) involvement of people from both organizations in the integration process, (b) treatment of people in selection and retention decisions and communications, (c) management of the M&A integration processes, (d) focus of the integration effort, and (e) focus on customers and strategic priorities during the integration.

Developing an integration project plan to drive implementation. Project planning methodologies can be of help in managing the complex activities involved in integration. Stahl and Mendenhall (2005) found that these methodologies were used in a number of mergers, including the Bank of America-Nations Bank merger. The goal of the management staff was to ensure that the overall integration effort proceeded smoothly and provided integration and transition teams with needed support. Managing communication with all stakeholders. Communication is one of the most critical activities to be managed during the integration process and may have a tremendous bearing on value preservation (Morrell et al., 2004). From the point at which rumors begin to circulate about a possible M&A, communication with stakeholders will be critical, especially if the changes affect the stakeholders. In general, stakeholders do not like uncertainty, and the longer uncertainty lasts, the more likely the stakeholders will experience adverse reactions. Stahl and Mendenhall (2005) identified five elements that are critical in establishing an effective communication process: (a) establishment of a communication philosophy that represents the core values driving the plan, including honesty and trust, and that guides management in executing the plan; (b) certainty that communication is timely and relevant, even though it must be balanced against the need for secrecy and legal restrictions; (c) understanding that employees want to hear how the merger will affect them, their jobs, roles, compensation, and so forth; (d) choosing effective communication methods, including the highly effective method of face-to-face two-way communication with supervisors and

51 managers; and (e) development and execution of a communication plan that identifies the objective behind the communication, the message to be communicated, the target audience of the message, the most effective media (including people) to employ in influencing the stakeholders, and the timing of the communication. Integration stage. According to Stahl and Mendenhall (2005), the integration stage begins after the M&A transaction has closed and continues until the target or merger partners are integrated. This stage lasts until the firms have achieved the level of cooperation needed to achieve the hoped-for synergies. The level of cooperation and time frame needed to achieve integration may vary, depending on the level of synergy sought. Integration is achieved when change in leadership has taken place and promised improvements in cash flow have occurred (Morrell et al., 2004). Stahl and Mendenhall suggested that merger partners should focus on the following three objectives during this stage: (a) complete any analytical activities that were not completed prior to the closing, (b) execute actions to integrate the target or merger partner physically, and (c) rebuild the organization into a stronger, more competitive entity capable of realizing financial and strategic objectives. Speed of the Integration Process A key issue facing executives is how fast they should push the integration process. Speed is reflected in the time it takes to make changes in the buyer, seller, or both, thereby integrating the firms (Stahl & Mendenhall, 2005). The researchers argued that companies should move quickly, integrating as fast as

possible because people are expecting change and delays prolong the uncertainty. They concluded that a rapid integration avoids periods of uncertainty in both the organization and in the marketplace and sets early expectations that changes will be made, mitigating the buildup of political resistance to change. On the contrary, Morrell et al. (2004) argued that integration should proceed slowly so that careful assessments can be made as to how the organizations should be merged. Moving slowly allows for a well-thought-out and planned integration. In any case, researchers (e.g., Morrell et al., 2004; Stahl & Mendenhall, 2005) have agreed that integration should move purposefully. More importantly, speed considerations should be weighed against commitments to delivering earnings and cash flows. Premiums paid for an acquisition and commitments made toward achieving synergies within a specified time frame should have a great bearing on speed. Managers, however, should be realistic about how long it might take to implement change. Building Teams and Work Units Stahl and Mendenhall (2005) indicated a number of key activities that can and should be performed to ensure that employees work together and are aligned toward the same financial and strategic objectives. The alignment process must begin at the senior-management level; otherwise, managers throughout the organization are not likely to fall into alignment (Morrell et al., 2004). If executives do not set an example for acceptable behaviors, it is not likely that those throughout the organization will consistently do so.

Stahl and Mendenhall (2005) have suggested that senior teams consider the following questions and communicate their answers to their staff: 1. What are the financial and strategic objectives of the M&A and how will that information translate into organizational priorities and objectives throughout the organization? 2. How will the organization be designed, including culture and the organization's staff, to support these objectives? 3. How will the integration and change processes be managed? 4. What areas will be affected? 5. What are the priorities, especially with respect to the financial and strategic objectives? Developing Capable and Motivated People Organizational leaders should not assume that people will be able to step into new positions and perform well after the M&A has closed (Morrell et al., 2004). Executives must put into place elements that help people develop the proper capabilities and motivation. Stahl and Mendenhall (2005) developed the following guidelines for developing capable employees: 1. Once people assume positions in the new work unit, their roles and responsibilities must be clarified. Even the most motivated persons will fail if they are unsure where they need to focus their energies. 2. Care must be taken to ensure that people are placed in the right positions. This process requires matching the right person to the right job.

3. Training and development are pivotal. Highly qualified people will need training and development to meet the needs of new positions that are created and work processes that are introduced. If training and development are done properly, integration teams should identify training and developmental needs as part of their work. 4. Performance and developmental feedback processes need to be established. Without feedback, people will not know if they are meeting expectations. 5. Measurement and reward systems may be among the most powerful elements in shaping behavior. 6. Many people in the M&A want to succeed in the new organization. Care must be taken that they are properly assimilated and are provided proper coaching and information on how they can succeed. Achieving Cultural Integration There will be numerous opportunities for culture clash as new units and teams are created with people from different organizations. Rather than wait for a clash, executives and managers should employ their plans to ensure cultural learning and cooperation (Morrell et al., 2004). These plans can improve the speed of the integration effort and help ensure that merger effects on financial and strategic aspects fulfill expectations. Managing, Staffing, Retention, and Redundancy Decisions concerning the fate of employees of companies involved in M&As are not easy to make, can be quite political, and can have a dramatic

effect on everyone in an organization. Range (2006) concluded that there are three sets of interrelated personnel decisions that must be managed during the integration process: selecting people, retaining key people, and severing people from the organization. Many executives agree that these tough decisions should be made and that they should be properly executed. Failure to execute tough decisions may result in missed synergies or the retention of people who will not or cannot execute the changes that are needed to make the combined company more competitive (Stahl & Mendenhall, 2005). Many executives also agree that such a process should be managed fairly and compassionately. Range (2006) found that failure to do so may lead to the premature departure of key people, poor morale, and attitudes that can affect customer service, safety, and productivity. Stahl and Mendenhall (2005) illustrated the complex interrelationship among the many elements in the M&A process and the need for managers to lead the process in an integrated and coherent way. They also indicated the importance of the integration effort and HR practices in the value-creation process. To date, the evidence clearly suggests that a well-managed integration effort is critical to the achievement of synergies and value creation, especially in cases in which a purchase price was premised on the former. Rather than getting engaged in the common debate about whether or not the M&A is good or bad in general, Stahl and Mendenhall emphasized that the M&A is probably the most volatile event in corporate life, with the potential to create outstanding synergies as well as value-destroying disasters.

Summary Extensive research indicates that, at least in the short-term, M&As can affect employees' attitudes (Bellou, 2007; Clinebell & Shadwick, 2004; Stahl & Mendenhall, 2005). While mergers can cause emotional distress and negative attitudes in some employees, other individuals have had positive attitudes following a merger. The way employees are treated during the merger process may influence future levels of commitment and how they respond to the organizational change. Clinebell and Shadwick (2004) concluded that it is important to evaluate a M&A in the context of workplace change and how people generally respond to change. Because change represents giving up an old way for a new one, there is always an element of loss. Demographic variables (e.g., age, gender, educational and professional qualifications, job level, and job tenure) have been described as playing a role in determining postmerger job satisfaction of employees (e.g., Chambers, 2008; Clinebell & Shadwick, 2004; Collins, 2005; Jensen & Zajac, 2004; Rhea, 2004). Following the M&A transaction, some degree of interorganizational integration is necessary in order to achieve the intent of the deal. To understand better the role of integration and HR practices, Stahl and Mendenhall (2005) defined the three overlapping stages of the M&A process as transaction, transition, and integration and illustrated how various integration and HR activities can play valuable roles during each phase.

Despite the large number of M&As that have occurred around the world in recent decades, their success rates remain unsatisfactory (Bellou, 2007). In an attempt to improve these rates, an increasing number of researchers have stressed the importance of understanding and managing the human factor (Chambers, 2008; Rhea, 2004; Stahl & Mendenhall, 2005). The present study was designed to add to the body of literature on the human factor of bank M&As by examining job satisfaction after such an organizational change. This study also provides information about the influence of demographic variables in determining job satisfaction.

CHAPTER 3: RESEARCH METHOD Overview This study examined the level of job satisfaction among current bank employees who were involved in a M&A between January 2006 and December 2007. Participants included employees across multiple seniority levels from low level employees, such as tellers, to higher level employees, such as bank presidents and vice presidents. No other inclusion or exclusion criteria were applied. A quantitative descriptive methodology design was used to measure the participants' job satisfaction levels using the AJDI with the AJIG survey instruments introduced in Chapter 1. The independent variables for this study included age, gender, job level, job tenure, and level of education. Data from the AJDI and AJIG were analyzed using descriptive statistics, two-way ANOVA tests, repeated measures ANOVAs, multiple regression, and factor analysis. Restatement of the Problem and Purpose Historically, failures of M&As have been based on economic and financial assessments only, but recently attention has shifted toward HR concerns (Appelbaum et al., 2007; Stahl & Mendenhall, 2005). According to Wall (2005), nearly 58% of all acquiring banks do not plan adequately for the cultural integration of the merging companies. The success or failure of a M&A can be attributed in part to the behavior of the affected employees (Appelbaum et al., 2007). Unintended negative consequences of M&As on employee behavior cannot be anticipated or alleviated without a clear understanding of how employees are psychologically affected by M&As. At present, there is not adequate information about the level of job satisfaction among bank employees

who have experienced a M&A to understand how they affect employee psychology. Hence, to address this problem, the present work aimed to assess overall job satisfaction as well as a number of satisfaction components in bank employees who have experienced a M&A. The purpose of this quantitative descriptive study was to examine several facets of job satisfaction among bank employees who were involved in a M&A, one to two years post merger, and to assess whether satisfaction was related to the employees' demographic identity, and whether there were differences among the satisfaction facets. Statement of the Research Questions The following research questions guided this quantitative study of bank employees in the U.S.: RQ1. To what extent, if any, can demographic characteristics predict differences in the level of job satisfaction, as measured by the AJDI and AJIG survey instruments, among bank employees who have experienced a M&A? RQ2. How does job satisfaction among bank employees who have experienced a M&A differ among particular facets of job satisfaction, including work on present job, supervision, opportunities for promotion, people at work, present pay, and the overall feeling of job satisfaction, as measured by the AJDI and AJIG survey instruments?

Hypotheses Following are the null hypothesis (0) and alternate hypothesis (a) statements for Research Questions 1 and 2 of the study: H1A0: There are no differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on age. H1Aa\ There are differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on age. H1B0: There are no differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on gender. H1Ba: There are differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on gender. H1C0: There are no differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on job level. H1Ca: There are differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on job level.

H1D0: There are no differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on job tenure. H1Da: There are differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on job tenure. H1E0: There are no differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on level of education. H1Ea: There are differences, as measured by the AJDI and AJIG survey instruments, in the level of job satisfaction among bank employees who have experienced a M&A based on level of education. H20: There are no significant differences in the levels of job satisfaction among bank employees who have a experienced a M&A among particular facets of job satisfaction, including work on present job, supervision, opportunities for promotion, people at work, present pay, and the overall feeling of job satisfaction, as measured by the AJDI and AJIG survey instruments. H2a: There are significant differences in the levels of job satisfaction among bank employees who have a experienced a M&A among particular facets of job satisfaction, including work on present job, supervision, opportunities for promotion, people at work, present pay, and the overall feeling of job satisfaction, as measured by the AJDI and AJIG survey instruments.

Description of Research Design A quantitative descriptive approach was employed, using the AJDI and AJIG survey instruments to examine job satisfaction levels of bank employees who have experienced a M&A. Data from the AJDI and AJIG were analyzed using descriptive statistics, two-way ANOVAs, repeated measures ANOVAs, multiple regression, and factor analysis. The study's population consisted of current bank employees from across the U.S. who are employed at four banks that were involved in M&As from 2006 to 2007. The survey was distributed to the employees online through the website SurveyMonkey.com (see Appendix E). The dependent variables of interest were employee job satisfaction in general and within particular facets. The independent variables were age group, gender, job level, job tenure, and level of education for the respondents. Demographic variables were examined as they are primary sources of identity for people in organizations and have been used in past studies as key indicators in determining job satisfaction (e.g., Chambers, 2008; Clinebell & Shadwick, 2004; Collins, 2005; Jensen & Zajac, 2004; Rhea, 2004). Operational Definition of Variables The dependent variables in this study were employee job satisfaction scores. Kreitner and Kinicki (2007) defined job satisfaction as the affective or emotional response toward various facets of an individual's job and measured it using the five subscales of the AJDI and the AJIG scale. The AJDI and AJIG are ordinal, Likert-based scales with individual responses measured as ordinal data and the aggregate scores for each scale measured as interval data (Balzer et al.,

2000; Detamore, 2008; Stanton et al., 2002). Each of the five AJDI facet scales and the AJIG scale are scored separately (Balzer et al., 2000). Additional information on the scoring procedures of the AJDI and AJIG scales is discussed in the section "Description of Materials and Instruments." Questions 6 through 11 of the survey were used to determine the job satisfaction scores (see Appendix A). Independent Variables Age. This independent variable (Xi) had the possible ordinal values of 1 to 6 as follows: 1 (under 21 years), 2 (21 to 30 years), 3 (31 to 40 years), 4 (41 to 50 years), 5 (51 to 60 years), and 6 (over 60 years). Question 2 of the survey was used to determine the age group of the respondents (see Appendix A). Gender. This independent variable (X2) had the possible nominal value of male or female. Question 4 of the survey was used to determine the gender of the respondents (see Appendix A). Job level. This independent variable (X3) had the possible ordinal values of 1 (semiskilled), 2 (professional), 3 (supervisory/managerial), and 4 (executive). Question 3 of the survey was used to determine the job level of the respondents (see Appendix A). Job tenure. This independent variable (X4) had the possible ordinal values of 1 (less than 1 year), 2(1 to less than 3 years), 3 (3 to less than 5 years), 4 (5 to less than 10 years), and 5 (10 years or more). Question 1 of the survey was used to determine the job tenure of the respondents (see Appendix A).

64 Level of education. This independent variable (X5) had the possible ordinal values of 1 (some high school), 2 (high school diploma), 3 (some college), 4 (associate's or bachelor's degree), and 5 (master's degree or higher). Question 5 of the survey was used to determine the level of education of the respondents (see Appendix A). Table 1 identifies the hypotheses, data elements, corresponding statistical approaches, and measurement scales that were used in this study. Table 1 Hypotheses, Data Elements, Statistical Approach, and Measurement Scale Alternative hypothesis H1Aa Data elements Age and each AJDI-AJIG facet score Gender and each AJDI-AJIG facet score Job level and each AJDI-AJIG facet score Job tenure and each AJDI-AJIG facet score Level of education and each AJDI-AJIG facet score Statistical approach Two-way ANOVA Measurement scale Ordinal and interval

H1Ba

Two-way ANOVA

Nominal and interval

H1Ca

Two-way ANOVA

Ordinal and interval Ordinal and interval

H1Da

Two-way ANOVA

H1Ea

Two-way ANOVA

Ordinal and Interval

Table 1 (continued) Alternative hypothesis H2Aa Data elements Scores of AJDI subscale work on present job Scores of AJDI subscale supervision Scores of AJDI subscale opportunities for promotion Scores of AJDI subscale people at work Scores of AJDI subscale present pay Scores of AJIG subscale overall job satisfaction Statistical approach Repeated Measures ANOVA Repeated Measures ANOVA Repeated Measures ANOVA Measurement scale Nominal and interval

H2Ba

Nominal and interval Nominal and interval

H2Ca

H2Da

Repeated Measures ANOVA Repeated Measures ANOVA Repeated Measures ANOVA

Nominal and interval

H2Ea

Nominal and interval Nominal and interval

H2Fa

Selection of Participants The participants for this study included current employees of banks that were acquired or did acquire another bank between January 2006 and December 2007. Banks were selected from the M&A report produced by the Federal Deposit Insurance Corporation (FDIC) each year. This report was used because it lists all banks in the U.S. that participated in M&As within specified years. The sampling method was a nonprobability purposive sample. Trochim and Donnelly (2008) defined purposive sampling as the selection of research participants

66 based on the researcher's judgment about the kinds of traits, characteristics, or behaviors that are important to the study. Because this was a nonprobabilistic sample, researchers should use caution in generalizing the results to the broader population. Since the sample was not chosen randomly, there was the potential for bias and inaccuracies in generalizing to a larger population (Zikmund, 2003). According to Nicholas (2009), non-probabilistic sampling does not guarantee a representative sample because the chance of individuals being selected into the sample is unknown. In this study, probabilistic sampling was not used for two main reasons. First, a subsample of the respondents was not used because all of the respondents who met the criteria for this study were needed to ensure adequate levels of statistical power. Second, the leaders of the financial institutions who agreed to participate in this study requested that the maximum number of employees be surveyed in order to determine an accurate level of job satisfaction of their employees. At the end of 2007, there were 2,214,621 bank employees in the U.S. and 8,533 banking institutions (FDIC, 2009). Thus the mean number of employees per bank was 259. Eighty-two banks were listed in the FDIC M&A report of 20062007. Assuming an average number of bank employees per banking institution of 259, the approximate size of the target population was 21,238. Bank presidents and chief executive officers of all 82 banks listed in the FDIC report were contacted to seek and secure their initial approval to participate in the study. Four banks chose to participate, for a bank participation rate of 4.9%. The four banks

had a total of 680 employees who served as the potential participants for this study. The 680 employees of these four banks were e-mailed the link to the survey and invited to participate. All participation was voluntary. The response rate for this study was 33.7% and resulted in 229 respondents. This response rate was comparable to that obtained in prior similar studies (~34%) (Chambers, 2008; Sperduto, 2007). GPOWER software (Faul, Erdfelder, Lang, & Buchner, 2007) was employed in an a priori power-analysis. Using an alpha level of 0.05 and varying degrees of power from 0.70 to 0.90, a priori sample sizes were computed to achieve various effect sizes for a Chi-square test with values of 4 and 8 for the degrees of freedom. The power analysis results indicated that the sample size of N = 82 would be needed to achieve an effect size of 0.3 and a power of 0.80, at an alpha level of 0.05, assuming a two-tailed test. The power analysis confirmed that the 229 respondents were satisfactory in terms of ensuring the results would reveal any significant differences among the population sampled. Appendix C contains the initial letter that was sent to the banks. The employees' participation was encouraged by the presidents and CEOs of the banks; however, the leaders of the bank explained that participation was voluntary. In return for promoting the survey, these bank presidents and CEOs were offered a copy of the finished dissertation, which could aid them in determining the satisfaction of their employees. The bank employees may also benefit from the understanding that their employers may gain regarding their job

satisfaction and the changes that could be implemented by the bank owners to improve job satisfaction. These changes might include training and cultural integration techniques. It is possible, however, that bank owners will ignore the results of this study and implement no changes to make the workplace better for the employees. After receiving an invitation to participate, each participating bank president and CEO received an introductory letter that welcomed the recipient and invited him or her to receive a copy of the final project. The informed consent clause was inserted on the first page of the survey before the user began the survey. Appendix B contains the cover letter and informed consent form that were used. Description of Materials and Instruments Smith, Kendall, and Hulin (1969) developed the Job Descriptive Index (JDI) and Job in General (JIG), which consists of a checklist of adjectives. It measures job satisfaction from a multidimensional approach, and a job is not seen as an entity, but rather as a complex interrelationship of tasks, roles, responsibilities, and interactions. The researchers at Bowling Green State University granted permission to use these instruments (approval letter presented in Appendix E). The instruments were chosen for this study as they would enable survey questions measuring different facets of job satisfaction to be asked (Stanton et al., 2002). The AJDI and AJIG were accompanied by a survey of demographic information.

AJDI. The AJDI was developed to generate scores indicative of satisfaction with a number of distinct aspects of the work situation: work, pay, promotions, supervision, and people. Each AJDI subscale contains five adjectives or short adjectival phrases describing various aspects of the respondents' work experiences. The first subscale addressed present job duties and measures the employee's satisfaction with the work itself. The satisfaction literature has identified various attributes of work that may be related to satisfaction, including opportunities for creativity and task variety, allowing an individual to increase his or her knowledge and changes in responsibility, amount of work, autonomy, job enrichment, and job complexity (Stanton et a!., 2002). The second subscale measured satisfaction with present pay, focusing on attitudes toward pay, and is based on the perceived difference between actual pay and expected pay. Pay satisfaction is also influenced by the personal financial situation of the employee, the economy, and the amount of pay an employee has received previously. The third subscale addresses opportunities for promotion. Satisfaction with promotions measures the employee's satisfaction with the company's promotion policy and the administration of that policy. Satisfaction with promotions is thought to be a function of the frequency of promotions, the importance of promotions, and the desirability of promotions (Stanton et al., 2002). The fourth subscale addresses supervision, and responses reflect an employee's satisfaction with his or her supervisor. In general, the more considerate and employee-centered supervisors will have employees with higher

levels of satisfaction (Stanton et al., 2002). The final subscale addresses people at work and assesses the level of employee satisfaction with his or her fellow employees. The degree of satisfaction with coworkers is thought to be determined by the work-related interaction among coworkers and the mutual liking or admiration of fellow employees (Stanton et al., 2002). The rationale for using this instrument was based on the JDI being one of the most widely used measures of job satisfaction for 40 years (Stanton et al., 2002). In addition, the instrument has established validity and reliability. The JDI has been called the most carefully constructed instrument to measure job satisfaction (Perry, 1977; Vroom, 1964). In the late 1970s, the instrument developers determined that an update of the JDI was needed. Subsequently, a five-year project was begun to revise the JDI, while retaining the original highscale reliability and validity (Balzer et al., 2000), resulting in the revised version. Past AJDI users have selected five items for each subscale with the expectation that the AJDI would maintain suitable internal consistency for scores from scales of that length. Experimentation with scales of different lengths indicated that alpha internal consistency reliability estimates dropped too low with fewer than five items (Stanton et al., 2002). AJIG. The AJIG was given, along with the AJDI, as the five facets of job satisfaction on the AJDI cannot be combined to obtain an accurate measure of the respondent's overall satisfaction with his or her job. Unlike the AJDI, which determines strong and weak areas of satisfaction, the AJIG determines workers' overall satisfaction with their job. Balzer et al. (2000) provides several ways in

71
which overall satisfaction is different from the areas of satisfaction included in the AJDI. The first way in which overall satisfaction differs from examination of the areas of satisfaction is that the latter may not fully explore all facets a worker considers when judging overall satisfaction. Next, respondents to the AJDI and AJIG may have different time perspectives in relation to the responses. Measures of job satisfaction should consider both long- and short-term feelings, and the AJIG was constructed to reflect the global, long-term evaluation of the job(Balzeret.al., 2000). Demographic survey. Demographic information was helpful in two ways. First, demographic information allowed for in-depth analysis of responses from specific groups of employees. Second, information regarding employee age, gender, job level, job tenure, and level of education was collected so comparisons could be made using the appropriate national norms for the AJDI (Balzer et al., 2000). Although previous research on the relationship between demographics and job satisfaction has been mixed, it was important to analyze the demographic variables and job satisfaction in order to determine first whether demographics influenced job satisfaction and second whether the differences in job satisfaction scores were related to the M&A (Stahl & Mendenhall, 2005). Reliability. The reliability of the JDI has been substantiated by a number of studies (Evans, 1969; Johnson, Smith, & Tucker, 1982). Split-half reliability coefficients ranged from .80 to .88 for the five scales (Smith et al., 1969). Schneider and Snyder (1975) reported 52 internal consistency reliabilities for each of the five subscales as follows: .84 for work, .80 for pay, .86 for promotion,

72 .87 for supervision, and .89 for coworkers. Likewise, reliability coefficients ranging from .77 to .88 were obtained by Muchinsky (1977). In a study of nursing faculty job satisfaction, Christian (1986) reported reliability coefficient alphas ranging from .85 to .90. For the Revised JDI, scale reliabilities remain high, with an average internal consistency (alpha) of .88 across six samples (Smith et al., 1969). The sixth area, job in general, developed to supplement the original JDI, was tested with several different samples. Internal consistency, reliability, and convergent validity were reported. In each of the samples from the Bowling Green data pool, coefficient alpha reliability exceeded .90. Coefficient alpha estimates of reliability (Cortina, 1993; Cronbach, 1951) are presented for each scale in Table 2. Table 2 Coefficient Alpha Values for the JDI and JIG JDI-JIG subscales Work Pay Opportunities for promotion Supervision Coworkers Jobs in general a ^0 .86 .87 n 1623

1603 1611 1613 1615 1629

.91 .91 .92

The AJDI, a shortened version of the unabridged JDI, uses a psychometric or rational strategy for scale reduction. Stanton et al. (2002) created the AJDI to reduce the time to complete the survey, occupy less space

on surveys, and decrease fatigue on the part of the respondents. These briefer versions of the five-facet scales of the JDI contain five items each. The AJDI is still very effective at discriminating among individuals and groups with low levels of satisfaction. Analysis of the AJDI and AJIG show that there is no compromise in validity or reliability when compared to the full JDI and JIG (Balzer et al., 2000). The abridged instrument is suitable for modern multivariate organizational research. The internal consistency of the AJDI has been shown to exceed .70 for all subscales (Stanton et al., 2002). The AJDI and AJIG use ordinal, Likert-based scales with the individual responses measured as ordinal data and the aggregate scores for each scale measured as interval data (Balzer et al., 2000; Detamore, 2008; Stanton et al., 2002). Each of the five AJDI facet scales and the AJIG scale were scored separately (Balzer et al., 2000). With Likert-type scale data, the underlying data remain ordinal. For the data to be treated as interval, Zikmund (2003) suggested that the data must first be tested to ensure that they meet the assumptions of normality. The five subscales of the AJDI and the AJIG scale were tested for normality based on inspection of shape of the distribution using histograms and normal Q-Q plots. All scales displayed negative skews to the data shape, suggesting that most respondents had above average to high levels of job satisfaction. Normality plots for the AJDI subscales and the AJIG scale are shown in Figures 2-13 of Appendix H.

In addition, the question of normality becomes less important when the sample is large due to the central limit theorem. In larger samples, the F test (and also the f test) has been demonstrated to be robust to violations of this assumption. Stevens (2002, p. 262) quoted Bock (1975, p .111) who stated "even for distributions which depart markedly from normality, sums of 50 or more observations approximate to normality. For moderately non-normal distributions the approximation is good with as few as 10 or 20 observations." Because the sample size for the current study (N = 229) was 4 to 5 times what Bock recommended, these non-normal distributions were not considered to be a problem. The five AJDI subscales and AJIG scale were scored by assigning numerical values to the yes, no, and cannot decide responses. About half of the items were worded favorably (e.g., satisfying), so that a yes response indicated respondent satisfaction. For the favorable items, yes responses received 3 points, no responses received 0 points, and undecided responses received 1 point. The remaining items were worded unfavorably (e.g., dull), meaning that a yes response indicated dissatisfaction. These unfavorable items were reversescored; no responses received 3 points, yes responses received 0 points, and undecided responses received 1 point. The undecided responses always received a score of 1 point, both before and after reverse-scoring. Furthermore, the undecided responses tended to be closer to an unfavorable response (i.e., score of 0) than to a favorable response (i.e., score of 3). A mean score of 1.77 and above indicated satisfaction with the respondent's job, and a mean score of

1.23 and below indicated dissatisfaction with the respondent's job. The range of scores between 1.23 and 1.77 was taken to represent an ambivalent feeling regarding the respondent's job satisfaction (Stanton et al., 2002). The AJDI is typically coupled with the AJIG, which is an overall evaluation of how individuals feel about their jobs. The AJIG reflects individuals' general feelings toward their jobs and is a frequently used instrument for measuring job satisfaction. Cronbach's alpha estimates of reliability for the coefficient alpha for the AJIG are .92 (Stanton et al., 2002). The AJIG's estimated reliability of .92 indicates that there is evidence that the items of the AJIG are measuring the same underlying construct (Cronbach, 1951). Validation of the JDI. The validation process for the JDI and the JIG began in 1959 and spanned a period of 5 years. A sequential research strategy was followed to validate the JDI, using evidence for both discriminate and convergent validity within and across samples. Regarding discriminate validity, it was expected that the JDI facets should distinguish satisfaction with pay from satisfaction with work and, in turn, distinguish these facets from satisfaction with other aspects of the job. Convergent validity evidence requires that the JDI facet measures and other measures using maximally different methods to assess the same satisfaction facet should be significantly similar in their evaluations (Balzer et al., 2000). Based on results from both cluster analyses and factor analyses, the JDI measures were initially found to possess high levels of discriminate and convergent validity (Stanton et al., 2002). Item loadings on their relevant factor were generally higher than their loading on the other distinct factors. These

results were particularly true when only the most discriminating JDI items (based on frequency distributions and item-analyses) were included in the analyses; therefore, the JDI does appear to tap into discriminating aspects of the job in a reliable and valid fashion (Balzer et al., 2000). Smith et al. (1969) found that the direct scoring procedure (responding yes, no, or undecided to phrases describing one's present job) was the best response format. People appeared to describe their present jobs relative to alternatives, and further computations of differences between the present job and a best or worst job had a negligible effect. Negatively phrased items with scoring reversed (e.g., no for routine work) and positively phrased items (e.g., yes for fascinating work) were found to have closely similar loadings, suggesting that both types of items could be used and that the number of each type of item within a scale would not need to be balanced, although, in fact, they are reasonably balanced on the JDI. In choosing the optimal measure of job satisfaction, Smith et al. (1969) suggested that it would be incorrect to accept the results from a single study that demonstrated a significant relationship between one measure of job satisfaction and one criterion measure as convincing evidence for the validity of the JDI. Therefore, a validation program was devised whereby evidence was collected and evaluated from a variety of job situations and samples. In subsequent studies, the JDI scales have been shown to correlate with behavioral measures, such as absenteeism, rated performance, and termination decisions. Furthermore, differences across organizations and differences associated with

education, job tenure, and income have been found; therefore, the JDI appears to be tapping individual differences that are related to behavioral, situational, and personal variables, supporting its usefulness as a tool for organizational diagnosis and evaluation (Balzer et al., 2000). The facets of the AJDI and AJIG have been used for the identification of areas in which employees' satisfaction can be measured as acceptable or needing improvement (Locke, 1976). Procedures Bank presidents and CEOs were sent a solicitation letter (see Appendix C) to gain their initial agreement to participate in this study. After research approval was obtained from Northcentral University's Institutional Review Board (IRB), the online survey link was e-mailed to the bank employees. In addition to the items from the AJDI and AJIG instruments, questions regarding the demographics of the participantsincluding (a) age, (b) gender, (c) job level, (d) job tenure, and (e) level of educationwere included. Online responses were downloaded into an Excel spreadsheet. Statistical analyses were performed on the data using Statistical Package for the Social Science (SPSS 15.0). The items from the AJDI and AJIG survey instruments were scored based on the scoring model provided by the researchers at Bowling Green State University, as described above. The survey administrator used was SurveyMonkey.com, which provides a webpage describing its security measures (http://www.surveymonkey.com/Monkey_Privacy.aspx). Confidentiality of the employees was maintained by deleting all identifying information after the data

were downloaded from SurveyMonkey.com. Data security measures were implemented to keep the data confidential and secure. Electronic security of the online responses relied on the security mechanisms in place with the survey administrator. Discussion of Data Processing The data were initially tabulated in Excel using standard summary statistics (means, standard deviations, frequencies, and percentages). Then, the data were analyzed inferentially using SPSS 15.0 software at the statistical significance level of .05. Parametric testing was used in this study because the dependent variable of employee job satisfaction was an interval level and the study sample population was large. Parametric tests assume a normal distribution of data and a similar variance across compared subpopulations. According to Berenson, Levine, and Krehbiel (2006), the resultant sample size exceeds the minimum number of 30 to assume parametric normal distribution of the data. Multiple regression, factor analysis, and two-way ANOVA tests were conducted for RQ 1. The factor analysis was chosen to aggregate the six satisfaction scores into one overall job satisfaction score. This was done to not only look at each independent variable individually, but also to look at possible interactions between the variables. The regression model was used to analyze the five independent variables with the dependent variable of overall job satisfaction scores. The model was created to predict how a combination of the

five independent variables together would be helpful in explaining the variance of the dependent variable of job satisfaction scores (Zikmund, 2003). The two-way ANOVA was chosen because this statistical test allows a researcher to deal with two or more independent variables simultaneously, asking not only about individual effects of each variable separately, but also about the interacting effects of two or more variables. Two-way ANOVAs are concerned with the comparisons of means and can be used to examine the means of two categorical variables. Two-way ANOVA calculations can determine whether there are significant differences in means of one group from means of the other. Statistical significance is determined by an F statistic. Calculated means, frequency distributions, and repeated measures ANOVAs with Bonferroni post hoc tests were conducted for RQ2. The mean of each facet of satisfaction was determined so that an analysis of the respondents' levels of job satisfaction could be determined based on the norms provided by the creators of the AJDI and AJIG. The repeated measures ANOVA test was conducted to repeatedly measure the same respondents on the six facets of job satisfaction. By collecting data from the same participants under repeated conditions the individual differences can be eliminated or reduced as a source of between group differences. Bonferroni post hoc tests were conducted to compare all the means together. These tests allowed an examination of all combinations of the satisfaction facets to determine significant differences between the different facets. Frequency distributions were used to summarize the dataset for each of the AJDI and AJGI satisfaction facets (Zikmund, 2003).

Methodological Assumptions, Limitations, and Delimitations For the purpose of this study, the following assumptions were made: 1. Study participants voluntarily took part in the study, and there was no coercion on the part of the employer. 2. Researcher bias did not interfere with participant responses. 3. The individual responses of the respondents were honest and sincere. 4. The AJDI and AJIG survey instruments are valid and measured the desired constructs. The main limitation in the methodology was that the study was limited to surveying employees involved in the M&A after the announcement had been made. With the confidentiality surrounding M&As, there was no opportunity to survey employees before the announcement was made public. This limitation may have had an impact on the study because only the current job satisfaction scores were collected. A second limitation was the use of a nonprobability purposive sample to gather the data. Because the sample was not chosen randomly, there was the potential for bias and inaccuracies in generalizing to a larger population. Third, the research was limited by the lack of a qualitative component to the study although the quantitative method used was successful in providing the data necessary to answer the research questions for this study. Using only a questionnaire method to collect data lacks the insight and richness that could have been derived from a qualitative or mixed-method approach by which deeper feelings relating to the subject could have been elicited (Detamore, 2008).

81 Finally, the survey instrument used in this study contained only certain facets of job satisfaction. The results and interpretation of this study are limited to these facets as opposed to using other instruments that include a wider spectrum of facets. There may also be exaggeration of facts because of emotional involvement of the respondents. The final survey results may be influenced by underreporting or exaggerations because there are no avenues to probe or seek clarification. The first delimitation of this study was the narrowness or scope of the study. This study tested only a relatively small subset of potential factors that could influence the job satisfaction of bank employees. Although testing more variables would result in more information regarding the level of job satisfaction of bank employees after M&As, it would be infeasible to test all of them in one study. A further delimitation regarding the selection of participants was the exclusion of all merged banks that chose not to participate in this study. Ethical Assurances This study was designed to comply with the standards for conducting research with human participants. Before data collection began, approval from the IRB of Northcentral University was obtained. Concerns surrounding ethical codes and consent were defined by Ryen (2007). These codes included the right of participants to know that they are being researched, the nature of the research, and the right to withdraw from the research at any time. These codes are balanced against the effect that this knowledge might have on participant behavior and, subsequently, on the research.

After receiving an invitation to participate in the study, each potential respondent received an introductory letter that informed the respondent of his or her rights and of the expectations of this study, purpose of this study, and how to complete the survey. There was also a statement informing the participants that there was no obligation to participate in the study and that participation was voluntary. If the respondent chose to participate, consent was assumed to be granted upon receipt of the instrument (see Appendix B for cover letter and informed consent form). Provisions were made for the participants to receive a copy after the study was completed. The privacy of the respondents was respected by the exclusion of questions that participants may have deemed personal or private in nature. The respondents were not asked about their income levels, marital status, names, or names of their employer. In addition, identifying information that would threaten the confidentiality of the participants was deleted after the survey responses were downloaded from SurveyMonkey.com. Ryen (2007), in discussing the issue of reciprocity, noted that participating in research was not only voluntary but also often without compensation and that it could be considered unethical because participating in an interview could be regarded as work. To ensure that there was no deception, the participants were informed that monetary compensation would not be given for their completion of the questionnaires. The burden on the participants was reduced by arranging the questionnaires as conveniently as possible for the participants. Convenience for participants was one of the reasons for using the AJDI and AJIG survey

83 instruments because the number of questions was reduced and the time required to complete the questionnaire was reduced.

CHAPTER 4: FINDINGS Overview The purpose of this quantitative descriptive study was to examine several facets of job satisfaction among bank employees who were involved in a M&A, one to two years post merger, and to assess whether satisfaction was related to the employees' demographic identity, and whether there were differences among the satisfaction facets. Responses to the AJDI, AJIG, and demographics surveys provided by such bank employee subjects were analyzed to determine job satisfaction levels and to determine if the demographic variables affected their job satisfaction levels. Differences and/or interactions in the participants' satisfaction scores based on age, job level, job tenure, and level of education were detected by two-way ANOVAs. A factor analysis was chosen to aggregate the six satisfaction scores into one overall job satisfaction score. The regression model was used to analyze the five independent variables with the dependent variable of overall job satisfaction score. Calculated means, repeated measures ANOVAs, and frequency distributions were used for each job facet to determine the job satisfaction levels of the bank employees. This chapter provides a brief overview of the data collected followed by an analysis of the results. A summary of the participant cohort's demographic information and psychometric characteristics for the summated satisfaction scores precedes analyses of the findings addressing the two stated research questions. The results of the data analysis conducted to answer the first research question address whether there were differences in the level of job satisfaction

85 among the bank employees who have experienced a M&A based on selected demographic factors. The results of the data analysis conducted to answer the second research question address the level of satisfaction among the bank employees who have experienced a M&A with the following particular facets of their jobs: work on present job, supervision, opportunities for promotion, people at work, present pay, and the overall feeling of job satisfaction. Results The AJDI, AJIG, and demographics surveys were administered to bank employees who were involved in a M&A from January 2006 to December 2007. Six hundred eighty invitations to participate were e-mailed and resulted in 229 responses. Overall, 33.6% of the population responded, resulting in 229 responses from employees at the four banks. All participants were employed at the bank prior to the M&A and held a variety of positions within the bank. Normality tests of the five subscales of the AJDI and the AJIG scale based on inspection of shape of the distribution using histograms and normal Q-Q plots revealed that all scales displayed negative skews to the data shape. This negative skewing suggests that most respondents had average-to-high levels of job satisfaction. Examples of the normality plots for the AJDI subscales and the AJIG scale are displayed in Figures 2-13 of Appendix H. Transformations of the data (log, square root, etc.) were not done because transforming the data would not improve the shape of the distribution due to the large numbers of respondents who gave the maximum score (M = 3.00) on many items. On four of the six scales, at least 50% of the respondents gave the

maximum rating, with the highest percentage being for work on the present job (77.9%) and people at work (74.7%). Any sort of linear transformation would not change the number of respondents who gave this maximum score. Because the sample size for this current study (N = 229) was 4 to 5 times what Bock (1975) recommended, these non-normal distributions were not considered to be a problem. Demographics The frequency counts for the demographic variables of age, gender, job level, job tenure, and level of education for the respondents are presented in Table 3. The 31-to-40 (30.1%) and 41-to-50 (27.9%) age groups held the largest portions of employees. Approximately 75% of the participants were female. Respondents who classified their job level as professional were the largest category, representing 35.8% of the respondents. Respondents were distributed relatively evenly across the job tenure levels. Most had attended at least some college, though a relatively small portion (8.7%) had earned advanced degrees.

87 Table 3 Demographics of the Bank Employee Respondents Variable Job Tenure Less than 1 year 1 to 2 years 3 to 4 years 5 to 10 years 10 or more years Age Under 30 years 31 to 40 years 41 to 50 years 51 to 60 years Over 60 years Job Level Semiskilled Professional Supervisor Executive Gender Male Female Education High school or less Some college Associates or Bachelor degree Master's degree or higher 51 73 85 20 22.3 31.9 37.1 8.7 58 171 25.3 74.7 46 82 57 44 20.1 35.8 24.9 19.2 44 69 64 37 15 19.2 30.1 27.9 16.2 6.6 22 57 54 50 46 9.6 24.9 23.6 21.8 20.1 Category n
%

Psychometric Characteristics of the Study Cohort The psychometric characteristics for the five AJDI subscales and the AJIG scale of job satisfaction used for this study are presented in Table 4. The highest levels of satisfaction scores were found in the subscales of people at work (M =

88 2.76) and work on present job (M - 2.83), and the lowest satisfaction subscale was present pay (M - 2.14). Cronbach's alpha reliability coefficients ranged in size from r= .77 to r- .87, with a median coefficient of r= .85. This median coefficient suggested that the five AJDI subscales and the AJIG scale displayed adequate levels of reliability. Table 4 Psychometric Characteristics for the Summated Satisfaction Scores Scale Work on present job Present pay Opportunities for promotion Supervision People at work Job in general Number of items 5 5 5 5 5 8 M SD Low High 3.00 3.00 3.00 3.00 3.00 3.00 Alpha .85 .77 .87 .86 .78 .87

2.83 0.49 0.00 2.14 0.85 0.00 2.28 0.93 0.00 2.60 0.72 0.00 2.76 0.51 0.00 2.67 0.56 0.00

The following is an analysis of the results of the statistical tests as they were applied to the two research questions and associated hypotheses. An alpha level of .05 was used for all statistical tests. For RQ1, a principal components factor analysis was performed for the six measures of job satisfaction. Using a Varimax rotation and selecting eigenvalues greater than one, a one factor solution was found which accounted for 48.75% of the variance. Specifically, the first factor (eigenvalue = 2.93, 48.75%) explained three times the variance of the second factor (eigenvalue = 0.79, 13.23%) and was kept as a general job satisfaction factor score. Figure 1 displays the results of the scree diagram that

89
plotted the eigenvalues from the principal components analysis for the six job satisfaction scores. Figure 1. Scree Plot of the Six Eigenvalues from Principal Components Analysis.

3.0

2.5'

2.0

I1-5"
l.o-

0.5-

O.i

3 4 Component Number

Table 5 displays the results of the multiple regression model predicting the job satisfaction factor score based on selected variables. The five-variable model was significant (p = .03) and accounted for 5.5% of the variance in the dependent variable. Inspection of the beta weights found only one of five predictors to be significant. Specifically, job satisfaction was higher for respondents with higher job levels within the organization (3 = .21, p = .007) (Table 5).

90 Table 5 Prediction of the Job Satisfaction Factor Score Based on Selected Variables Variable B SE p p

Intercept Job Tenure Age Job Level Gender 3 Level of Education

a

-0.17 -0.09 0.05 0.21 -0.09 -0.02

0.56 0.06 0.06 0.08 0.17 0.08 -.12 .06 .21 -.04 -.01

.76 .10 .43 .007 .59 .85

Full Model: F (5, 223) = 2.61, p = .03. f = .055. Gender: 1 = Male 2 = Female.

To further understand the interaction effects among the five primary independent variables, a series of ten two-way ANOVA models were developed (Tables 5 to 16). These ten models were used with the job satisfaction score as the dependent variable. Research Question 1 Findings Research Question 1 (RQ1). To what extent, if any, can demographic characteristics predict differences in the level of job satisfaction, as measured by the AJDI and AJIG survey instruments, among bank employees who have experienced a M&A? For RQ1, there was a related hypothesis for each of the five demographic factors: age, gender, job level, job tenure, and level of education. Two-way ANOVAs were conducted to determine whether differences and/or interactions existed in employee job satisfaction based on the five demographic variables.

91
Table 6 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Job Tenure and Age Group Partial Eta Squared

Source

SS

df

MS

P .10 .23 .04 .43

Full Model Job Tenure Age Group a Job Tenure X Age Group Error Total
a

6.30 1.45 4.14 0.61 221.70 228.00

3 1 1 1 225 228

2.10 1.45 4.14 0.61 0.99

2.13 1.47 4.20 0.62

.028 .006 .018 .003

Age Group: Under 40 (M = -0.15, S = 0.10) versus Over 40 (M = 0.13, SE = 0.09)

Job tenure and age group. Table 6 displays the results of the two-way ANOVA test for the job satisfaction factor score based on the respondent's job tenure and age group. The full model was not significant, F(3, 225) = 2.13, p = .10 and only accounted for 2.8% of the variance in the job satisfaction factor score. There was no significant main effect for job tenure, F(1, 225) = 1.47, p = .23 but job satisfaction was significantly higher for respondents over 40 years old, F(1, 225) = 4.20, p = .04. No significant interaction effect was noted, F(1, 225) = .62, p = .43.

92 Table 7 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Job Tenure and Job Level Partial Eta Squared

Source

SS

df

MS

Full Model Job Tenure Job Level a Job Tenure X Job Level Error Total
a

15.63 2.04 10.67 5.86 212.37 228.00

3 1

5.21 2.04

5.52 2.16

.001

.069 .010 .048 .027

.14
.001

1 10.67 11.31 1
225 228
5.86 0.94 6.21

. 0 1

Job Level: Staff (M = -0.25, SE = 0.09) versus Management (M = 0.20, SE = 0.10)

Job tenure and job level. Table 7 displays the results of the two-way ANOVA test for the job satisfaction factor score based on the respondent's job tenure and job level. The full model was significant, F(3, 225) = 5.52, p = .001 and accounted for 6.9% of the variance in the job satisfaction factor score. There was no significant main effect for job tenure, F(1, 225) = 2.16, p = .14 but job satisfaction was significantly higher for respondents in management positions, F(1, 225) = 11.31, p = .001. In addition, a significant interaction effect was noted, F(1, 225) = 6.21, p = .01. Inspection of Table 8 found for respondents with less than five years at the bank, the satisfaction levels between staff and management were generally similar (M - 0.01 versus M = 0.13). However, for respondents with more than five years at the bank, the difference in satisfaction

93 between staff and management was over six times larger {M = -0.52 versus M 0.26) (Table 8). Table 8 Interaction of Job Tenure and Job Level for the Job Satisfaction Factor Score Job Tenure Job Level M SE

Under five years

Staff Management

0.01 0.13 -0.52 0.26

0.10 0.14 0.15 0.13

Five or more years

Staff Management

Job tenure and gender. Table 9 displays the results of the two-way ANOVA test for the job satisfaction factor score based on the respondent's job tenure and gender. The full model was not significant, F(3, 225) = 2.13, p = .10 and only accounted for 2.8% of the variance in the job satisfaction factor score. There was no significant main effect for job tenure, F(1, 225) = 0.00, p = .96 or for gender, F(1, 225) = 3.60, p = .06. In addition, there was no significant interaction effect, F(1, 225) = 2.87, p = .09.

94 Table 9 Two-WayANOVA for the Job Satisfaction Factor Score Based on Job Tenure and Gender Partial Eta Squared

Source

SS

df

MS

Full Model Job Tenure Gender Job Tenure X Gender Error Total

6.29 0.00 3.54 2.83 221.72 228.00

3 1 1 1 225 228

2.09 0.00 3.54 2.83 0.99

2.13 0.00 3.60 2.87

.10 .96 .06 .09

.028 .000 .016 .013

Job tenure and level of education. Table 10 displays the results of the twoway ANOVA test for the job satisfaction factor score based on the respondent's job tenure and level of education. The full model was not significant, F(3, 225) = 1.26, p = .29 and only accounted for 1.7% of the variance in the job satisfaction factor score. There was no significant main effect for job tenure, F(1, 225) = 0.67, p = .41 or for level of education, F(1, 225) = 1.62, p = .20. In addition, there was no significant interaction effect, F(1, 225) = 1.80, p = .18.

95 Table 10 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Job Tenure and Level of Education Partial Eta Squared

Source

ss
3.76 0.67 1.62

df

MS

P .29 .41 .20

Full Model Job Tenure Level of Education Job Tenure X Level of Education Error Total

3 1 1

1.25 0.67 1.62

1.26 0.67 1.62

.017 .003 .007

1.79 224.24 228.00

1 225 228

1.79 1.00

1.80

.18

.008

Age group and job level. Table 11 displays the results of the two-way ANOVA test for the job satisfaction factor score based on the respondent's age group and job level. The full model was significant, F(3, 225) = 3.48, p = .02 and accounted for 4.4% of the variance in the job satisfaction factor score. There was no significant main effect for age group, F(1, 225) = 2.67, p = .10 but job satisfaction was significantly higher for respondents in management positions, F(1, 225) = 5.58, p = .02. No significant interaction effect was noted, F(1, 225) = 0.43, p = . 5 1 .

96 Table 11 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Age Group and Job Level Partial Eta Squared

Source

SS

df

MS

P .02 .10 .02 .51

Full Model Age Group Job Level a Age Group X Job Level Error Total
a

10.12 2.58 5.40 0.41 217.88 228.00

3 1 1 1 225 228

3.37 2.58 5.40 0.41 0.97

3.48 2.67 5.58 0.43

.044 .012 .024 .002

Job Level: Staff (M = -0.15, SE = 0.09) versus Management (M = 0.17, SE = 0.10)

Age group and gender. Table 12 displays the results of the two-way ANOVA test for the job satisfaction factor score based on the respondent's age group and gender. The full model was significant, F(3, 225) = 2.68, p = .05 and accounted for 3.4% of the variance in the job satisfaction factor score. Job satisfaction was significantly higher for respondents over 40 years old, F(1, 225) = 5.24, p = .02 but there was no significant main effect for gender, F(1, 225) = 0.93, p = .34. In addition, no significant interaction effect was noted, F(1, 225) = 2.13, p = . 15.

97
Table 12 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Age Group and Gender Partial Eta Squared

Source

SS

df

MS

Full Model Age Group a Gender Age Group X Gender Error Total

7.86

3 1 1 1 225
228

2.62 5.13 0.91 2.08 0.98

2.68 5.24 0.93 2.13

.05 .02 .34 .15

.034 .023 .004 .009

5.13 0.91
2.08

220.14
228.00

* Age Group: Under 40 (M = -0.16, SE = 0.12) versus Over 40 (M = 0.20, SE = 0.10)

Age group and level of education. Table 13 displays the results of the twoway ANOVA test for the job satisfaction factor score based on the respondent's age group and level of education. The full model was not significant, F(3, 225) = 2.00, p = .11 and accounted for only 2.6% of the variance in the job satisfaction factor score. Job satisfaction was significantly higher for respondents over 40 years old, F(1, 225) = 4.69, p = .03 but there was no significant main effect for level of education, F(1, 225) = 1.48, p = .23. In addition, no significant interaction effect was noted, F(1, 225) = 0.38, p = .54.

98 Table 13 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Age Group and Level of Education Partial Eta Squared

Source

ss
5.94 4.63 1.46

df

MS

P .11 .03 .23

Full Model Age Group a Level of Education Age Group X Level of Education Error Total
a

3 1 1

1.98 4.63 1.46

2.00 4.69 1.48

.026 .020 .007

0.38 222.06 228.00

1 225 228

0.38 0.99

0.38

.54

.002

Age Group: Under 40 (M = -0.14, S = 0.09) versus Over 40 (M = 0.15, SE = 0.09)

Job level and gender. Table 14 displays the results of the two-way ANOVA test for the job satisfaction factor score based on the respondent's job level and gender. The full model was significant, F(3, 225) = 3.47, p = .02 and accounted for 4.4% of the variance in the job satisfaction factor score. Job satisfaction was significantly higher for respondents in management positions, F(1, 225) = 7.66, p = .006 but there was no significant main effect for gender, F(1, 225) = 1.05, p = .31. In addition, no significant interaction effect was noted, F(1,225)=1.51,p=.22.

99 Table 14 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Job Level and Gender Partial Eta Squared

Source

SS

df

MS

Full Model Job Level a Gender Job Level X Gender Error Total
a

10.09 7.42 1.02 1.46 217.91 228.00

3 3.36 1 7.42 1 1.02 1 1.46

225 0.97 228

3.47 7.66 1.05 1.51

.02
.006

.044 .033 .005 .007

. 3 1 .22

Job Level: Staff (M = -0.17, SE = 0.11) versus Management (M = 0.26, SE = 0.10)

Job level and level of education. Table 15 displays the results of the twoway ANOVA test for the job satisfaction factor score based on the respondent's job level and level of education. The full model was significant, F(3, 225) = 3.20, p = .02 and accounted for 4.1% of the variance in the job satisfaction factor score. Job satisfaction was significantly higher for respondents in management positions, F(1, 225) = 6.69, p = .01 but there was no significant main effect for level of education, F(1, 225) = 0.20, p = .66. In addition, no significant interaction effect was noted, F(1, 225) = 1.94, p = .1.7.

100
Table 15 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Job Level and Level of Education Partial Eta Squared

Source

SS

df

MS

Full Model Job Level a Level of Education Job Level X Level of Education Error Total
a

9.33 6.51 0.19

3 1 1

3.11 6.51 0.19

3.20 6.69 0.20

.02 .01 .66

.041 .029 .001

1.88 218.67
228.00

1 225
228

1.88 0.97

1.94

.17

.009

Job Level: Staff (M= -0.18, SE = 0.09) versus Management (M = 0.17, S = 0.10)

Gender and level of education. Table 16 displays the results of the twoway ANOVA test for the job satisfaction factor score based on the respondent's gender and level of education. The full model was not significant, F(3, 225) = 1.40, p = .24 and accounted for 1.8% of the variance in the job satisfaction factor score. No significant main effect was found for gender, F(1, 225) = 2.91, p = .09 or for level of education, F(1, 225) = 0.20, p = .65. In addition, no significant interaction effect was noted, F(1, 225) = 1.38, p = .24.

101 Table 16 Two-Way ANOVA for the Job Satisfaction Factor Score Based on Gender and Level of Education Partial Eta Squared

Source

SS

if

MS

P .24 .09 .65

Full Model Gender Level of Education Gender X Level of Education Error Total

4.17
2.89 0.20

3 1 1

1.39 2.89 0.20

1.40 2.91 0.20

.018 .013 .001

1.37 223.83 228.00

1 225 228

137 0.99

1.38

.24

.006

Age. Research Hypothesis H1 Aa stated that for the bank employees who have experienced a M&A, there are differences in satisfaction based on age. The respondents were asked to provide their ages by selecting one of the following categories: (a) under 21, (b) 21 - 30, (c) 31 - 40, (d) 41 - 50, (e) 51 - 60, and (f) over 60. The levels were collapsed into two groups: under 40 years old and over 40 years old. Using two-way ANOVAs, the interaction effects were examined among the primary independent variables and the age of the respondents. An alpha level of .05 was used for all statistical tests. Significant differences were found after controlling for job tenure (p = .04, see Table 6), gender (p = .02, see Table 12), and level of education (p = .03, see

Table 13). However, no significant interactions effects were noted. Thus, support was provided for the research hypothesis H1Aa, which predicted differences in job satisfaction based on the age of the respondents, and the null hypothesis H1A0was rejected. Gender. Research Hypothesis H1 Ba stated that for the bank employees who have experienced a M&A, there are differences in satisfaction based on gender. Using two-way ANOVAs, the interaction effects were examined among the primary independent variables and the gender of the respondents. An alpha level of .05 was used for all statistical tests. No significant main effects were found (p > .05) and no significant interaction effects were noted (p > .05). Thus, no support was provided for the research hypothesis H1Ba> which predicted differences in job satisfaction based on the gender of the respondents, and the null hypothesis H1B0was retained. Job level. Research Hypothesis H1Ca stated that for the bank employees who have experienced a M&A, there are differences in satisfaction based on job level.The respondents were asked to provide their job levels by selecting one of the following categories: (a) semiskilled, (b) professional, (c) supervisor or management, and (d) executive. The levels were collapsed into two groups: staff and management. Using two-way ANOVAs, the interaction effects were examined among the primary independent variables and the job level of the respondents. An alpha level of .05 was used for all statistical tests. Significant differences were found after controlling for job tenure (p = .001, see Table 7), age (p = .02, see Table 11), gender (p = .006, see Table 14), and

103
level of education (p = .01, see Table 15). In addition, a significant interaction was noted with respect to job tenture (p = .01, see Tables 7 and 8). For staff respondents who have been with the bank for more than five years, their satisfaction levels were over six times lower than the satisfaction levels of management respondents who have also been with the bank for more than five years (M = -0.52 versus M = 0.26, see Table 8). Thus, support was provided for the research hypothesis H1Ca, which predicted differences in job satisfaction based on the job level of the respondents, and the null hypothesis H1C0was rejected. Job tenure. Research Hypothesis H1 Da stated that for the bank employees who have experienced a M&A, there are differences in satisfaction based on job tenure. The respondents were asked to provide their job tenure by selecting one of the following categories: (a) less than 1 year, (b) 1-2 years, (c) 34 years, (d) 5-10 years, and (e) 10 or more years. The levels were collapsed into two groups: less than five years and more than five years. Using two-way ANOVAs, the interaction effects were examined among the primary independent variables and the job tenure of the respondents. An alpha level of .05 was used for all statistical tests. No significant main effects were found (p > .05) and no significant interaction effects were noted (p > .05). Thus, no support was provided for the research hypothesis H1Da, which predicted differences in job satisfaction based on the job tenure of the respondents, and the null hypothesis H1D0was retained.

104
Level of education. Research Hypothesis H1Ea stated that for the bank employees who have experienced a M&A, there are differences in satisfaction based on level of education. The respondents were asked to provide their levels of education by selecting one of the following categories: (a) high school or less, (b) some college, (c) associate's or bachelor's degree, and (d) master's degree or higher. The categories were collapsed into two groups: some college or less and associate's degree or higher. Using two-way ANOVAs, the interaction effects were examined among the primary independent variables and the level of education of the respondents. An alpha level of .05 was used for all statistical tests. No significant main effects were found (p > .05) and no significant interaction effects were noted (p > .05). Thus, no support was provided for the research hypothesis H1Ea, which predicted differences in job satisfaction based on the level of education of the respondents, and the null hypothesis H1E0was retained. Research Question 2 Findings Research Question 2 (RQ2). How does job satisfaction among bank employees who have experienced a M&A differ among particular facets of job satisfaction, including work on present job, supervision, opportunities for promotion, people at work, present pay, and the overall feeling of job satisfaction, as measured by the AJDI and AJIG survey instruments? For RQ2, the mean of each facet of satisfaction was determined so that an analysis of the respondents' levels of job satisfaction could be conducted. Research Hypothesis H2a stated that there are significant differences in the

105 levels of job satisfaction among bank employees who have a experienced a M&A among particular facets of job satisfaction, including work on present job, supervision, opportunities for promotion, people at work, present pay, and the overall feeling of job satisfaction, as measured by the AJDI and AJIG survey instruments. To address this hypothesis, Table 17 displays the results of the repeated measures ANOVA which compared the six mean scale scores to each other. The overall F test was significant (p = .001) and provided support for this hypothesis H2a, which predicted significant differences in the employees' levels of job satisfaction among the particular job facets, and the null hypothesis H20 was rejected. The Bonferroni post hoc tests found the mean score for the work on present job scale (M = 2.83) to be significantly higher (p = .001) than the mean scores for the present pay, opportunities for promotion, supervision, and job in general scales. In addition, the mean score for people at work (M = 2.76) was significantly higher (p = .001) than the mean scores for the present pay and opportunities for promotion scales, and significantly higher (p = .007) than the mean score for the supervision scale. In addition, the mean score for the job in general mean scale (M = 2.67) was significantly higher (p = .001) than the mean scores for the present pay and opportunities for promotion scales. Finally, the mean score for the supervision scale (M = 2.60) was significantly higher (p = .001) than the mean scores for the present pay and opportunities for promotion scales. No other pair of scale means was significantly different from each other at the p<.05 level (Table 17).

106 Table 17
Satisfaction Scale Scores Based on Calculated Means. Repeated Measures ANOVA Scale Work on Present Job 3 Present Pay b Opportunities for Promotionc Supervisiond People at Work 6 Job in General M Z83 2.14 2.28 2.60 2.76 2.67 SD 049 0.85 0.93 0.72 0.51 0.56

Repeated Measures ANOVA: F (5, 1,140) = 54.01, p = .001. Bonferroni post hoc tests: a > b, c, d, f, (p = .001); e > b, c (p = .001); e > d (p = .007); f > b, c (p = .001); d > b, c ( p = .001) No other pair of scales was significantly different at the p < .05 level.

Job Satisfaction Facets Work on present job. The mean score for the AJDI subscale work on present job was 2.83 for the bank employees and fell within the satisfaction range of the AJDI Index. A review of the frequencies of responses (see Table 18) to the items listed in the work on present job subscale for the bank employees revealed that most of the respondents gave high ratings to those descriptors with positive attributes and low ratings to those descriptors with negative attributes. A full 92.6% of respondents reported being satisfied with their work.

107
Table 18 Frequency of Responses for Work on Present Job Question Satisfying Yes No Not Sure Total Gives sense of accomplishment Yes No Not Sure Total Challenging Yes No Not Sure Total Dull Yes No Not Sure Total Uninteresting Yes No Not Sure Total Frequency % 0

212 11 6 229

92.6 4.8 2.6 100.0

217 7 5 229

94.8 3.1 2.2 100.0

208 11 10 229

90.8 4.8 4.4 100.0

8 215 6 229

3.5 93.9 2.6 100.0

5 216 8 229

2.2 94.3 3.5 100.0

Present pay. The mean score for the AJDI subscale present pay was 2.14 for the bank employees and fell within the satisfaction range of the AJDI Index. A review of the frequencies of responses (see Table 19) to the items listed in the present pay subscale for the bank employees revealed that approximately 76%

108 of the respondents thought the pay they were receiving was adequate, 77% of thought their pay was fair, 39% of the respondents believed they were not paid well, and 24% of the respondents believed they were underpaid. Table 19 Frequency of Responses for Present Pay Question Income adequate for normal expenses Yes No Not Sure Total Fair Yes No Not Sure Total Insecure Yes No Not Sure Total Well Paid Yes No Not Sure Total Underpaid Yes No Not Sure Total Frequency %

173 43 13 229

75.5 18.8 5.7 100.0

176 24 29 229

76.9 10.5 12.7 100.0

15 177 37 229

6.6 77.3 16.2 100.0

101 89 39 229

44.1 38.9 17.0 100.0

55 138 36 229

24.0 60.3 15.7 100.0

109
Opportunities for promotion. The mean score for the AJDI subscale opportunities for promotion was 2.28 for the bank employees and fell within the satisfaction range of the AJDI Index. A review of the frequencies of responses (see Table 20) to the items listed in the opportunities for promotion subscale for the bank employees revealed that 65% of the respondents believed that there were good opportunities for promotion, while 24% believed that there were poor opportunities for promotion. Most (79%) of the respondents believed the promotion policy was fair. Table 20 Frequency of Responses for Opportunities for Promotion Question Good opportunities for promotion Yes No Not Sure Total Promotion on ability Yes No Not Sure Total Dead-end job Yes No Not Sure Total Frequency %

148 55 26 229

64.6 24.0 11.4 100.0

160 36 33 229

69.9 15.7 14.4 100.0

7.9 81.7 10.5 100.0

18 187 24 229

110
Table 20 (continued) Question Good chance for promotion Yes No Not Sure Total Unfair promotion policy Yes No Not Sure Total Frequency %

144 49 36 229

62.9 21.4 15.7 100.0

13 180 36 229

5.7 78.6 15.7 100.0

Supervision. The mean score for the AJDI subscale supervision was 2.60 for the bank employees and fell within the satisfaction range of the AJDI Index. A review of the frequencies of responses (see Table 21) to the items listed in the supervision subscale for the bank employees revealed that most of the respondents gave high ratings to those descriptors with positive attributes and low ratings to those descriptors with negative attributes.

111 Table 21
Frequency of Responses for Supervision Question Praises good work Yes No Not Sure Total Tactful Yes No Not Sure Total Up-to-date Yes No Not Sure Total Annoying Yes No Not Sure Total Bad Yes No Not Sure Total Frequency % 0

200 19 10 229

87.3 8.3 4.4 100.0

191 24 14 229

83.4 10.5 6.1 100.0

176 32 21 229

76.9 14.0 9.2 100.0

25 196 8 229

10.9 85.6 3.5 100.0

10 207 12 229

4.4 90.4 5.2 100.0

People at work. The mean score for the AJDI subscale people at work was 2.76 for the bank employees and fell within the satisfaction range of the AJDI Index. A review of the frequencies of responses (see Table 22) to the items listed in the people at work subscale for the bank employees revealed that most

112
of the respondents gave high ratings to those descriptors with positive attributes and low ratings to those descriptors with negative attributes, with the negative attribute receiving no more than 9.9% of the final results. Table 22 Frequency of Responses for People at Work Question Boring Yes No Not Sure Total Helpful Yes No Not Sure Total Responsible Yes No Not Sure Total Intelligent Yes No Not Sure Total Lazy Yes No Not Sure Total Frequency %

11 213 5 229

4.8 93.0 2.2 100.0

217 6 6 229

94.8 2.6 2.6 100.0

208 6 15 229

90.8 2.6 6.6 100.0

202 8 19 229

88.2 3.5 8.3 100.0

16 193 20 229

7.0 84.3 8.7 100.0

113 Job in general. The mean score for the AJIG scale was 2.67 for the bank employees and fell within the satisfaction range of the AJIG Index. A review of the frequencies of responses (see Table 23) to the items listed in AJIG scale for the bank employees revealed that most respondents gave high ratings to descriptors with positive attributes and low ratings to descriptors with negative attributes. Relatively few (11%) of the respondents indicated low levels of job contentment Table 23 Frequency of Responses for Job in General Question Good Yes No Not Sure Total Undesirable Yes No Not Sure Total Better than most Yes No Not Sure Total Disagreeable Yes No Not Sure Total Frequency %

220 5 4 229

96.1 2.2 1.7 100.0

6 215 8 229

2.6 93.9 3.5 100.0

202 14 13
229

88.2 6.1 5.7 100.0

2.2 90.0 7.9

5 206 18
229

100.0

114
Table 23 (continued) Question Makes me content Yes No Not Sure Total Excellent Yes No Not Sure Total Frequency %

180 25 24 229

78.6 10.9 10.5 100.0

149 46 34 229

65.1 20.1 14.8 100.0

Evaluation of Findings This section includes an analysis and evaluation of this study's research results. The findings of this study are discussed in terms of the related literature described in Chapter 2. A review of the literature provided insight into previous research regarding the satisfaction of employees who have gone through a M&A based on demographic characteristics and other factors. Age Research hypothesis H1Aa predicted differences in job satisfaction scores based on age among bank employees who have experienced a M&A. The present study did yield some support for this hypothesis. Significant differences were found among job tenure, gender, and education level. Specifically, job satisfaction was significantly higher for respondents over 40 years old. The significant finding of the differences of age is consistent with prior indications of age being a significant factor (Berdahl and Moore, 2004; Chambers, 2008; and

115
Rhea, 2004). These prior researchers suggested that differences related to age may be due to older employees being relieved to have a job and more focused on retirement at an advanced age. Younger employees may have higher expectations for satisfaction in general, or they may be less satisfied with their job duties because they have yet to advance into senior level positions that provide more satisfying responsibilities. Gender Research hypothesis H1Ba predicted differences in job satisfaction scores based on gender among bank employees who have experienced a M&A. Inconsistent with hypothesis H1Ba, measures of the job facets showed no differences in satisfaction levels between the male and female bank employees. This finding was consistent with Davies (2003), who found no differences of gender on morale or satisfaction. Chambers (2008) did report slightly higher satisfaction scores for men relative to women. Chambers suggested that women may have greater stress from M&As due to greater participation in the acquisition rumor mill than men and more conflicting opinions regarding the acquisition process. However, no evidence for this supposition was provided in the present study. Job Level Research hypothesis H1Ca predicted differences in job satisfaction scores based on job level among bank employees who have experienced a M&A. Indeed, consistent with this hypothesis, management level respondents were found to have significantly higher satisfaction levels relative to the staff level

116
respondents. These findings support the conclusions of Chambers (2008), who found that the management staff tend to have more positive levels of satisfaction than lower level employees. These findings conflicted with the findings of Rhea (2004), who did not observe differences among employees across job levels. Importantly, the present findings lend support to Terry et al.'s (2001) view that lower level employees may be less committed to the organization and may engage in more in-group bias. If Terry et al. are correct, then employees' differential attitudes may be related to their level of involvement with building the new organizational culture following an acquisition, such that higher level employees with more involvement are more satisfied with their post-merger situation than lower level employers who were excluded from the transition process. The longer the staff respondents have been employed at the bank, the more negative levels of job satisfaction are experienced. These results are in-line with the Social Identity Theory (Tajfel & Turner, 1979). Individuals who have developed a high degree of personal identification with an organization are more resistant to change. Longer employment tenure staff respondents may feel they have less opportunities for advancement than shorter-term staff respondents and may also perceive the expectation on the part of the organizational leadership that they are required to adopt a new group identity as a negative factor. Job Tenure Research hypothesis H1Da predicted differences in job satisfaction scores based on job tenure among bank employees who have experienced a M&A. No

117 differences were found in satisfaction levels based on the bank employees' job tenure. These negative findings are consistent with the conclusions of Chambers (2008), who also found no differences between ratings of satisfaction among employees post-M&A based on job tenure. The results did not replicate the pattern of findings described by Rhea (2004), who found a more favorable satisfaction level for those employees employed 1 -to-5 years than for employees employed 6-to-10 years or employed 11-to-15 years. Rhea suggested that the longer a person is employed in one industry, job, or corporation, the greater his or her attachment to that their institution. If Rhea's view is correct, any threat to that employment may create resentment, and highly tenured employees may be less willing to change during the M&A process. Level of Education Research hypothesis H1Ea predicted differences in job satisfaction scores based on level of education among bank employees who have experienced a M&A. No differences in satisfaction levels based on level of education were found in this study. These negative findings replicated Rhea's (2004) results, who found no statistically significant differences in satisfaction based on level of education. However, the results contradict with the findings of Chambers (2008), who concluded that higher a level of education was positively correlated with greater levels of satisfaction. Chambers reasoned that highly educated individuals usually have more job opportunities and may thus feel less insecure about losing their jobs and as a result be less prone to develop negative feelings about a merge.

118 Summary of Demographic Variables The job satisfaction data relative to demographic factors were mixed. Chambers (2008) recently posited that the M&A itself, perhaps in interaction with other factors, had the greatest impact on satisfaction. Chambers found that being involved in a M&A has a pervasive, negative impact on every aspect of how an employee views his or her organization. However, according to Collins (2005), employees had similar opinions about satisfaction regardless of their demographics. Hence further work is needed in order to resolve more precisely the influence of demographic factors on employee attitudes and employee job satisfaction during the merge process (Stahl & Mendenhall, 2005). Importantly, banks might be able to use such data to anticipate certain employees' reactions to M&As, and specify the at-risk individuals. Examination of Level of Job Satisfaction Research question 2 examined the level of job satisfaction among bank employees who have experienced a M&A with respect to work on present job, supervision, opportunities for promotion, people at work, present pay, and the overall feeling of job satisfaction, as measured by the AJDI and AJIG survey instruments. Research hypothesis H2a predicted that there are significant differences in the employees' levels of job satisfaction among the six satisfaction scales. A summary of each satisfaction scale is discussed below. Work on Present Job According to Balzer et al. (2000), a high satisfaction score in the work on present job subscale is a result of opportunities for creativity, task identity,

119 autonomy, and job enrichment. Satisfying work appears to be work that can be accomplished and that is intrinsically challenging (Smith et al., 1969). The findings of the current study show that the examined bank employees were generally satisfied with their work. Present Pay Although pay cannot create job satisfaction, it can lead to job dissatisfaction if not handled properly (Herzberg, Mausner, & Snyderman, 1967). The subscale of present pay addresses attitude toward pay and is based on the perceived difference between actual pay and expected pay. Expected pay is based both on the value of perceived inputs and outputs of the job and the pay of other employees holding similar jobs and possessing similar qualifications. Pay satisfaction is also influenced by the personal financial situation of the employee, the economy, and the amount of pay an employee has received previously (Smith et al., 1969). The value placed on perceived inputs by the bank employees versus outputs of the job was generally considered satisfactory by the bank employees. Opportunities for Promotion Satisfaction with the subscale opportunities for promotion is thought to be a function of the frequency of promotions, the importance of promotions, and the desirability of promotions (Balzer et al., 2000; Smith et al., 1969). The findings of the current study showed that bank employees were generally satisfied with their opportunities for promotion. The respondents may have indicated higher satisfaction with their promotion possibilities because new positions and

120
opportunities are often created after a M&A when individuals decide to leave the newly merged bank (Stahl & Mendenhall, 2006). Supervision According to Balzer et al. (2000), when a mean score falls within the satisfactory range for the supervision subscale, supervisors are most likely perceived as having a high competence level, being employee-centered, and being thoughtful. The bank employees' reported satisfaction with their supervisors and this suggests that they viewed their supervisors accordingly. People at Work Herzberg et al. (1967) suggested that interpersonal relationships with peers are extrinsic job traits that cannot create job satisfaction. However, they can lead to dissatisfaction if they are not acceptable. The degree of satisfaction is thought to be determined by work-related interactions among co-workers and the mutual liking or admiration of fellow employees (Balzer et al., 2000; Locke, 1976; Smith et al., 1969). The present study cohorts responses indicated that they were generally satisfied with that their co-workers; no unrest in this regard was evident in the data. Summary of Employees' Levels of Job Satisfaction The survey results indicated that the bank employees were as a whole satisfied with their work on present job, supervision, people at work, opportunities for promotion, and the job in general. Bank employees provided an indifferent assessment of their pay, being neither satisfied nor dissatisfied on average. Previous research focusing on employees involved in a M&A have resulted in

121 mixed satisfaction levels. In Chambers (2008) study on satisfaction and morale, there was an improvement in positive responses from the initial study (18%) to the follow up study (32%); meanwhile there was a decrease in responses at the fair level from 20% in the initial study to 3% in the follow-up study. The study group enrolled in Chambers study differed from the present cohort in that they reported more negative than positive responses to describe their morale and satisfaction levelsa trend that persisted in the follow-up studies. Hence there appears to be substantial variability in job satisfaction and moral across institutions. It will be important to resolve the determining factors that result in greater satisfaction in some institutions relative to others in order to develop recommendations for optimizing employee performance across transitions and in general. According to Harrison (2005), companies that do not recognize the business implications of human emotions risk low morale, dips in productivity, and an unsuccessful start to the M&A. Those job facets found herein to be consistently satisfactory across demographics should be maintained to facilitate successful merges while those with more volatility should be monitored more closely to prevent dissatisfaction and unrest. Summary There were two primary purposes for this research. The first purpose was to determine whether there were differences in the level of job satisfaction among bank employees who have experienced a M&A based on selected demographic factors of (a) age, (b) gender, (c) job level, (d) job tenure, and (e) level of education. The second purpose was to examine how the levels of satisfaction

122
among the bank employees who have experienced a M&A differ among particular job satisfaction facets, including work on present job, supervision, opportunities for promotion, people at work, present pay, and the overall feeling of job satisfaction, as measured by the AJDI and AJIG survey instruments. The analysis of job satisfaction data for the bank employees who have experienced a M&A with respect to demographic variables (age, gender, job level, job tenure, and level of education) resulted in mixed findings. Two-way ANOVAs provided support for the research hypothesis regarding age and support for the research hypothesis regarding job level. No evidence supporting effects of gender, job tenure, or level of education was found. Thus, for RQ1, the null hypotheses for gender, job tenure, and level of education were retained, and the null hypotheses for age and job level were rejected. An examination of the differences in the level of job satisfaction for the bank employees who have experienced a M&A among particular job satifaction facets indicated that the employees were generally satisfied with the work on present job, supervision, people at work, opportunities for promotion, and the job in general. The bank employees were neither satisfied nor dissatisfied with pay. In general, none of the bank employees were dissatisfied with any of the job facets examined during the study. The overall Ftest of the repeated measures ANOVA was significant (p = .001), which provided support for the alternative hypothesis. Thus, for RQ2, the null hypothesis was rejected and the alternative hypothesis was accepted. The alternative hypothesis stated that there are significant differences in the employees' levels of job satisfaction among the job

satisfaction facets of the AJDI and AJIG instruments. Understanding the job facets that positively contribute to job satisfaction may enable bank leaders to deploy strategies to better assure successful mergers.

124
CHAPTER 5: IMPLICATIONS, RECOMMENDATIONS, AND CONCLUSIONS This final chapter provides a brief overview of the major aspects of this work in the following Summary section. A discussion of the present findings and their implications and limitations follows. And recommendations for applications and future work are then provided. Finally a presentation of the study's conclusions is given. Summary Historically, failures of M&As have been based on economic and financial assessments only, but recently attention has shifted toward HR concerns (Appelbaum et al., 2007; Stahl & Mendenhall, 2005). According to Wall (2005), nearly 58% of all acquiring banks do not plan adequately for the cultural integration of the merging companies. The success or failure of a M&A can be attributed in part to the behavior of the affected employees (Appelbaum et al., 2007). Unintended negative consequences of M&As on employee behavior cannot be anticipated or alleviated without a clear understanding of how employees are psychologically affected by M&As. At present, there is not adequate information about the level of job satisfaction among bank employees who have experienced a M&A to understand how they affect employee psychology. Hence, to address this problem, the present work aimed to assess overall job satisfaction as well as a number of satisfaction components in bank employees who have experienced a M&A. This study examined the level of job satisfaction among bank employees who have experienced a M&A in order to provide information that may be useful

125
toward better understanding the psychology and behavior of bank employees subjected to M&As. Specifically, the purpose of this quantitative descriptive study was to examine several facets of job satisfaction among bank employees who were involved in a M&A, one to two years post merger, and to assess whether satisfaction was related to the employees' demographic identity, and whether there were differences among the satisfaction facets. The first research question addressed in this study was whether there were differences in the level of job satisfaction among bank employees who have experienced a M&A based on selected demographic factors. The second research question was an examination of the level of job satisfaction among bank employees who have experienced a M&A across particular facets of job satisfaction, including work on present job, supervision, opportunities for promotion, people at work, present pay, and the overall feeling of job satisfaction. The AJDI plus AJIG survey approach (Stanton et al., 2002) was chosen to provide subscales that measure different facets of job satisfaction (via the AJDI) and overall job satisfaction (via the AJIG). In addition, a section of the survey collected personal and professional demographic information on each respondent. The survey data were subjected to statistical data analysis to reveal significant effects. As discussed in more detail below, this work was limited by the inability to gather pre-M&A data, the nonprobability purposive sampling approach, the coincidental exclusion of employees not retained beyond the mergers, and the lack of a qualitative component.

Implications While economic and financial assessments are fundamental to decisions about pursuing M&As and assessing their success, the importance of facilitating personnel integration and adjustment should not be ignored (Appelbaum et al., 2007; Stahl & Mendenhall, 2005). According to Wall (2005), nearly 58% of all acquiring banks do not plan adequately for the cultural integration of the merging companies. Such shortcomings may contribute to the often disappointing outcomes realized following M&As (Appelbaum et al., 2007). Information about the level of job satisfaction among bank employees who have experienced a M&A may elucidate how employee psychology is affected by M&A transactions and thus provide useful information for institutions preparing to merge. The present work assessed overall job satisfaction as well as a number of facets of job satisfaction in bank employees who have experienced a M&A. A quantitative descriptive approach was applied to measure the job satisfaction levels of bank employees who have experienced a M&A and to determine which, if any, demographic variables affected their overall levels of job satisfaction or any particular facets of job satisfaction. Research Question One RQ1. To what extent, if any, can demographic characteristics predict differences in the level of job satisfaction, as measured by the AJDI and AJIG survey instruments, among bank employees who have experienced a M&A? Evidence emerged in favor of hypotheses predicting that job satisfaction would be affected by certain variables. Of the five independent variables

127
examined, only age and job level were found to produce significant variation among the respondent groups' levels of job satisfaction, while gender, job tenure, level of education had no significant effects on the respondents' levels of job satisfaction. Age Age was a significant factor in determining differences in job satisfaction with the over 40 year old respondents having significantly higher levels of job satisfaction. However, the two-way ANOVA tests revealed that the differences in the respondents' age and level of job satisfaction only had an explaining power of 2% or less. This indicates that only 2% of the variance in the levels of job satisfaction could be explained based on the respondents' age. Thus the meaning of the significant differences of age on the level of job satisfaction is not clear. The pattern of results is consistent with several possibilities. For example, younger employees may have higher expectations for satisfaction in general, or they may be less satisfied with their job duties because they have yet to advance into senior positions that provide more satisfying responsibilities. The youngest employees (under 30 years of age) reported the greatest score for satisfaction with opportunities for promotion, followed by 31 to 40 yearolds and 41 to 50 year-olds, who reported similar levels, and 51-60 year-olds whose scores were about 20% below the level of the youngest workers. The oldest group of employees (over 60 years of age) reported the lowest mean score for satisfaction with opportunities for promotion.

128 Job Level Job level was a significant factor in determining differences in job satisfaction with the management level respondents having significantly higher levels of job satisfaction. However, the two-way ANOVA tests revealed that the differences in the respondents' job level and level of job satisfaction only had an explaining power of 4% or less. This indicates that only 4% of the variance in the levels of job satisfaction could be explained based on the respondents' job level. Thus the meaning of the significant differences of job level on the level of job satisfaction is not clear. Job level was a significant factor in determining satisfaction with pay, opportunities for promotion, and the job in general, but was not a significant factor in determining satisfaction with work on present job, supervision, or people at work. Executives reported a higher level of satisfaction with pay then supervisors, professionals or semiskilled workers. Meanwhile, supervisors reported a higher level of satisfaction with opportunities for promotion than their professional and semiskilled counterparts. And executives were found to be more satisfied with their jobs in general than professionals and semiskilled workers. These findings of this research hypothesis support the conclusions of Chambers (2008), who found that the management staff had positive levels of satisfaction and do not support the findings of Rhea (2004), who found no differences between employees of different job levels. The lower satisfaction ratings of employees in lower level jobs could be related to a lower commitment toward and engagement in the company, as suggested by Terry et al. (2001).

129 According to the social identity theory (Tajfel & Turner, 1979), employees' level of involvement in the M&A process may affect their attitude toward the transition. Research Question Two RQ2. How does job satisfaction among bank employees who have experienced a M&A differ among particular facets of job satisfaction, including work on present job, supervision, opportunities for promotion, people at work, present pay, and the overall feeling of job satisfaction, as measured by the AJDI and AJIG survey instruments? With the various satisfaction facets that determine job satisfaction, it was predicted in favor of the hypothesis predicting that there are differences in the levels of job satisfaction among particular facets of job satisfaction. Of the six satisfaction facets examined, work on present job, supervision, people at work, and the job in general were found to produce significant differences among the respondent groups. None of the other facet mean scores were significantly different from each other. Work on Present Job Work on present job was a significant factor in determining the differences among the satisfaction facets. The Bonferroni post hoc tests found the mean score for the work on present job scale to be significantly higher than the mean scores for the facets present pay, opportunities for promotion, supervision, and the job in general. The satisfaction facet work on present job is considered to be a motivating factor for employees. Thus employees were motivated to perform

130
work that can be accomplished and that is intrinsically challenging (Smith et al.,

1969).
Supervision The facet supervision was a significant factor in determining the differences among the satisfaction facets. The Bonferroni post hoc tests found the mean score for the supervision scale to be significantly higher than the mean scores for the facets present pay and opportunities for promotion. The satisfaction facet supervision is considered to be a hygiene factor for employees. Satisfaction with supervision is considered the bank supervisor's willingness or unwillingness to coach and train subordinates. Thus employees were encouraged by highly competent, employee-centered, and thoughtful supervisors (Smith etal., 1969). People at Work The facet people at work was a significant factor in determining the differences among the satisfaction facets. The Bonferroni post hoc tests found the mean score for the people at work scale to be significantly higher than the mean scores for the facets present pay, opportunities for promotion, and supervision. Herzberg et al. (1967) suggested that interpersonal relationships with peers are extrinsic job traits that cannot create job satisfaction. However, they can lead to dissatisfaction if they are not acceptable. Thus the bank employees viewed their relationship with their coworkers as a satisfying relationship.

131
Job in General The facet job in general was a significant factor in determining the differences among the satisfaction facets. The Bonferroni post hoc tests found the mean score for the job in general scale to be significantly higher than the mean scores for the facets present pay and opportunities for promotion. Thus the bank employees have an overall feeling of satisfaction with their jobs. Limitations Several limitations may have influenced the findings and interpretations of the results. The main limitation in the methodology was that the study was limited to surveying employees after the announcement of a M&A had been made. With the confidentiality surrounding M&As, there was no opportunity to identify such employees before the announcement was made public, so it was not possible to survey the same set of employees before and after a M&A at their respective banks and compare their scores pre-M&A and post-M&A. The second limitation was the use of a nonprobability purposive sample to gather the data. Because the sample was not chosen randomly, the findings and conclusions are not generalizable to a larger population. The third limitation was that the bank employees laid off because of the M&A were not included in this study. Finally, the research was limited by the lack of a qualitative component. The study used only a quantitative descriptive method to collect and analyze data. Although this quantitative method was successful in providing the data necessary to answer the research questions, a qualitative case-study design could investigate in-depth other variables that might influence employee

132
satisfaction, such as management conduct, levels of communication, and the change process. Recommendations Several factors may have influenced the results of this study and should be taken into consideration for any future studies. This study added to the body of literature on bank M&As by examining the level of job satisfaction among bank employees who have experienced a M&A. As a result of this study, recommendations are made in two areas: (a) practical recommendations and (b) recommendations for future research. Practical Recommendations Bank owners currently going through M&As or those preparing to engage in M&As should consider their employees as a main factor in the success of the M&A process. Failure to consider the employees may lead to the premature departure of key people, poor morale, and attitudes that can affect customer service, safety, and productivity (Range, 2006). The respondents in the present study were more often satisfied than dissatisfied with their jobs, and their levels of satisfaction may have influenced their positive feelings about the M&A. Bank leaders should reach-out to at-risk groups, which could lead to a smoother transition. Perhaps people who are over 40 could be recruited to help make the transitions smoother. Employees should assume that the merging of any two organizations will result in some level of cultural and leadership change. They must be prepared for changes in their job roles, reporting relationships, and business direction. These

133
changes may not always be perceived as favorable, but they must be willing to at least give these changes a chance, as evidenced by the positive effects found in the majority of the respondents in this study. Recommendations for Future Research Little research has been conducted on the level of job satisfaction of bank employees who have gone through a M&A. As a first step to help bank managers realize the importance of the human factor during the M&A process, a crosssectional study of bank employees who were involved in a M&A from 2006 to 2007 was conducted and reported herein. The participating employees were surveyed 1-2 years after the M&A. A longitudinal study may prove more beneficial because of the amount of time the M&A process takes to complete. It would be prudent for future research to survey a group of employees prior to the announcement of a M&A, if possible, and then re-survey them at several subsequent time points, such as a couple months after, 1-2 years after, and 4-5 years after in order to analyze changes over time. This approach would allow a researcher to perform critical comparisons based on pre-M&A job satisfaction and post-M&Ajob satisfaction. Second, a retrospective analysis may have been useful in this dissertation to determine additional factors that may have led to the employees' overall high levels of job satisfaction. The job facets examined in this study could only explain 5.5% of the variance in regards to the respondents' levels of job satisfaction. The analysis could involve directly asking the employees about how the merger affected the facets of their job satisfaction identified in this study, what about the

134
merger caused the most stress, and what the companies did that was helpful or not helpful in the process. The measure of employee's personality may also be another factor to consider for future research. The personality or temperament of the employees may help to determine if the employees were satisfied or unsatisfied with their jobs based on how suited the employee is for the job. Finally, future researchers may consider studying groups of financial institutions and surveying all of the employees in the bank, differentiating between those employees who were involved in a M&A process and those who were not. This approach would allow researchers to analyze the influence of the involvement in the M&A on job satisfaction responses. Conclusions Facilitating personnel integration and adjustment through M&A transitions may enhance the chances of achieving a successful merge. Elucidating the psychology and behavior of personnel may be informative to bank leaders who need to develop a plan to transfer and integrate their employees with employees from a merging institution. Variability in attitudes across demographic groups, especially in consideration of particular job facets, may indicate which employees are in the greatest need of support. The surveyed post-M&A bank employees were as a whole satisfied with their work on present job, supervision, people at work, opportunities for promotion, and the job in general. They were neither satisfied nor dissatisfied with pay. Age and job level were found to be significant factors affecting job satisfaction scores. Specifically, respondents over 40 years old had significantly

135 higher levels of job satisfaction than the respondents under 40 years old. Executives had significantly higher satisfaction scores than professionals and semiskilled workers with respect to pay and opportunities for promotion. The results of this study support the result of Cartwright and Schoenberg (2006), who compared the perceptions of the pre-M&A job satisfaction level to the current level of job satisfaction in two organizations and found no evidence to suggest that the M&A had adversely affected overall levels of job satisfaction of employees at either organization. The levels of job satisfaction were analyzed to determine if there were differences among particular facets of job satisfaction. Of the six satisfaction facets examined, work on present job, supervision, people at work, and the job in general were found to produce significant differences among the respondent groups' level of satisfaction, while present pay and opportunities for promotion had no significant differences among the respondent groups' level of satisfaction. With the differences in satisfaction levels based on the particular satisfaction facets, there appears to be variability in job satisfaction among employees and across institutions. It will be important to resolve the determining factors that result in greater satisfaction in some facets relative to others in order to develop recommendations for optimizing employee performance across transitions and in general. It is beyond the scope of the present work to resolve exactly why the respondents were satisfied or dissatisfied with the specific facets of their jobs. One reason for the relatively high level of job satisfaction for the bank employees

136 might be the current poor economic climate, in which employees may be content to merely be employed. In a survey of working Americans in all industries and job levels Campbell (2008) reported that 48% of the employees were completely satisfied with their jobs and 42% somewhat satisfied, compared with 37% and 42%, respectively, in 2007. This upward shift in satisfaction from 2007 to 2008 supports the supposition that the subjectivity of job satisfaction may shift with the general economic climate.

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APPENDIXES

Appendix A: Questionnaire JOB SATISFACTION SURVEY FOR BANK EMPLOYEES PLEASE PROVIDE THE FOLLOWING IDENTIFICATION INFORMATION 1. How long have your worked for this organization? (1) less than 1 year (2) 1 to less than 3 years (3) 3 to less than 5 years (4) 5 to less than 10 years (5) 10 years or more 2. What is your age? (1) under 21 years (2) 21 to 30 years (3) 31 to 40 years years (5) 51 to 60 years (6) over 60 years (4) 41 to 50

3. What is your job level? (1) Semiskilled (ex. teller, customer service representative) (2) Professional (ex. personal banker, loan assistant) (3) Supervisory/Management (ex. teller supervisor, branch manager) (4) Executive (president, CEO, vice president) 4. What is your gender? (1)Male (2) Female 5. What is the level of education you have completed? (1) Some High School (2) High School Diploma/GED (3) Some College (4) Associate's or Bachelor's Degree (5) Master's Degree or Higher

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Abridged Job Descriptive Index WORK ON PRESENT JOB 6. Think of the work you do at present. How well does each of the following words or phrases describe your work? Choose: 1 2 3 for "Yes" if it describes your work for "No" if it does not describe it for"?" if you cannot decide Yes Satisfying Gives sense of accomplishment Challenging Dull Uninteresting 1 1 1 1 1 No 2 2 2 2 2 ? 3 3 3 3 3

PRESENT PAY 7. Think of the pay you get now. How well does each of the following words or phrases describe your pay? Choose: Yes Income adequate for normal expenses.... 1 Fair 1 Insecure 1 Wellpaid 1 Underpaid 1 No 2 2 2 2 2 ? 3 3 3 3 3

OPPORTUNITIES FOR PROMOTION 8. Think of the opportunities for promotions that you have now. How well does each of the following words or phrases describe your opportunities for promotion? Choose: Yes No ? Good opportunities for promotion Promotion on ability Dead-endjob Good chance for promotion Unfair promotion policy 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3

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SUPERVISION 9. Think of your supervisor and the kind of supervision that you have on your job. How well does each of the following words or phrases describe your supervision? Choose: Yes Praises good work Tactful Up-to-date Annoying Bad 1 1 1 1 1 No 2 2 2 2 2 ? 3 3 3 3 3

PEOPLE AT WORK 10. Think of the majority of people that you work with or the people you meet in connection with your work. How well does each of the following words or phrases describe these people? Choose: Yes Boring Helpful Responsible Intelligent Lazy 1 1 1 1 1 No 2 2 2 2 2 ? 3 3 3 3 3

JOB IN GENERAL (JIG) 11. Think of your job in general. All in all, what is it like most of the time? For each of the following words or phrases, choose: Yes No ? Good Undesirable Better than most Disagreeable Makes me content Excellent Enjoyable Poor 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3

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Appendix B: Cover Letter and Informed Consent Date

Bank Name Bank Address Dear Bank President and CEO: As part of my studies for obtaining a Ph.D. in Business Administration from Northcentral University, based in Prescott Valley, AZ, I am conducting a survey to understand better how mergers and acquisitions relate to employee job satisfaction. I would appreciate you filling out the questionnaire online at (insert surveymonkey.com site). My research will involve surveying all levels of employees of the bank. The survey is based on the Abridged Job Descriptive Index and will consist of 25 questions. The information will be collected in a manner that insures that both the individual and the bank will remain completely anonymous. After the data analyses have been completed, a summary of the results and recommendations will be made available to you and your bank. This study will provide important and useful information to organizations involved in mergers and acquisitions. Your participation in this project will help insure a quality document. I will be more than happy to answer any additional questions you may have regarding the study or your participation. I can be reached directly by calling (605) 201-3949. Thank you for your willingness to participate. Sincerely, Shelly Baker

Informed Consent Form Title of Research Study: An Examination of Bank Employees' Job Satisfaction after a Merger and Acquisition Research Personnel: The following people are involved in this doctoral research project and may be contacted at any time: Shelly Baker, PhD Candidate bakershelly@yahoo.com, phone: 605-201-3949, Dr. Marie Gould Dissertation Committee Chair, mgould@ncu.edu, phone: 302-454-1296. Purpose: The purpose of this quantitative descriptive study was to examine several facets of job satisfaction among bank employees who were involved in a

150
M&A, one to two years post merger, and to assess whether satisfaction was related to the employees' demographic identity, and whether there were differences among the satisfaction facets. This study will be a contribution to the examination of mergers and acquisitions, especially as it relates to employee morale and job satisfaction. This study's goal will be to examine mergers and acquisitions and determine to what extent, if any, mergers and acquisitions affect employee job satisfaction in the banking industry. This is an independent university study. There is no deception in this study. We are interested in your opinions and reflections about your attitudes towards your job satisfaction. Task requirements: You will be asked to complete a five page electronic questionnaire about how you view your job. Duration and Locale: The experimental session will last approximately 10 minutes. This survey will be delivered electronically and can take place in the convenience of your own home on your personal computer or laptop. Potential Risk / Discomfort: Although there are no known risks in this study, some of the information is personally sensitive and also includes questions about job satisfaction, age and ethnicity, which may be distressing to some people. However, you may withdraw at any time and you may choose not to answer any question that you feel uncomfortable in answering. Anonymity / Confidentiality: The data collected for this study are confidential. All data are coded such that your name is not associated with them. In addition, the coded data are made available only to the researchers associated with this project. Right to Withdraw: You have the right to withdraw from the study at any time without sanctions and there are no costs to you. You may omit questions on this questionnaire if you do not want to answer them. However, questions proceeded by an asterisk must be completed in order to proceed to the next page. We would be happy to answer any question that may arise about the study. Please direct your questions or comments to: Shelly Baker, Ph.D. Candidate bakershelly@yahoo.com, phone: 605-201-3949, or Dr. Marie Gould, Dissertation Committee Chair, mgould@ncu.edu, phone: 302-454-1296. To participate in the survey, please use the following link: (insert surveymonkey.com link).

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Appendix C: Initial Letter to Banks DATE

BANK NAME ADDRESS CITY, STATE, ZIP CODE Dear BANK PRESIDENT AND CEO, Hello. My name is Shelly Baker, and I am a doctoral student at Northcentral University. I reside in Sioux Falls, SD. I am currently studying for my PhD in Business Administration with an emphasis in Management. This letter is in regards to my dissertation study. The study I have chosen focuses on the banking industry and the relationship of a merger and acquisition to job satisfaction. I am planning on surveying employees from banks that have recently (in the past two years) gone through a merger and acquisition. After significant research on your organization, I feel your organization would be an ideal candidate for my study. I understand you are extremely busy, so I want to thank you in advance for reading this letter and giving my request your attention. I am requesting to survey your employees with an online or paper survey, depending on whether your employees have Internet access. The link for the online survey could be e-mailed to them and would take less than five minutes to complete. The survey will be based on the Job Descriptive Index. The names of the employees will not be needed or used in the dissertation. In addition, the name of your organization will not appear anywhere in the dissertation. I just simply need to survey your employees and determine their job satisfaction prior to and since the merger. I would also provide you with a copy of the study results. I appreciate your attention to my request and would be happy to answer any additional questions that I can. I can be reached at 605.201.3949 or by e-mail at bakershelly@yahoo.com. Again, thank you for your time. Sincerely, Shelly A. Baker

152 Appendix D: AJDI/AJIG Scoring Model Scale

Pay Promotion Work Supervisor Co-worker JIG

Abbreviated Score
Total Total Total Total Total Total X X X X X X

Multiply
9 9 18 18 18 18 il i' i' tf i' i'

Divide
5 5 5 5 5 8

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Appendix E: SurveyMonkey.com Confidentiality and Security Policy How do you keep our data secure? As stated in our privacy policy, we will not use your data for our own purposes. The data you collect is kept private and confidential. You are the owner of all data collected or uploaded into the survey. In regards to the security of our infrastructure, here is an overview of our setup. We do offer SSL encryption for the survey link and survey pages during transmission. The cost is an additional $9.95 per month. The servers are kept at Inflow - www.inflow.com. Physical Servers kept in locked cage Entry requires a pass card and biometric recognition - Digital surveillance equipment Controls for temperature, humidity and smoke/fire detection Staffed 24/7 Network Multiple independent connections to Tier 1 Internet access providers Fully redundant OC-48 SONET Rings Uptime monitored every 5 minutes, with escalation to SurveyMonkey staff Firewall restricts access to all ports except 80 (http) and 443 (https)\ QualysGuard network security audits performed quarterly Hardware Servers have redundant internal power supplies Data is on RAID 10, operating system on RAID 1 Servers are mirrored and can failover in less than one hour Software Code in ASP, running on SQL Server 2000 and Windows 2000 Server Latest patches applied to all operating system and application files SSL encryption of all billing data Data backed up every hour internally Data backed up every night to centralized backup system, with offsite backups in event of catastrophe

154 Appendix F: Approval from Bowling Green State University COPYRIGHT PERMISSION The abridged Job Descriptive Index (aJDI) is copyrighted by Bowling Green State University. The abridged Job in General (aJIG) Scale is a subscale of the abridged Job Descriptive Index and is also copyrighted by Bowling Green State University. The purchaser is granted permission to reproduce the abridged Job Descriptive Index and the abridged Job in General Scale in English. The number of copies that the purchaser can make is listed below. The rights to reproduce additional copies must be purchased through Bowling Green State University (see below).

Date:

9/11/2008

Purchaser: Shelly Baker Address: Northcentral University

Permission to reproduce: 1000 copies of the abridged Job Descriptive Index and abridged Job in General in English.

Maya Yankelevich JDI Research Assistant To obtain copyright information for the aJDI and aJIG, contact: The JDI Research Group Department of Psychology Bowling Green State University Bowling Green, OH 43403 (419)372-8247 jdi_ra@bgnet.bgsu.edu http://showcase.bgsu.edu/IOPsych/jdi/index.htm

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Appendix G: Ethic Committee Approvals

Reference: Shelly Baker IRB: 2009-03-30-071 Dear Dr. Marie Gould, Dissertation Chair: On April 4, 2009, Northcentral University approved Shelly's research project entitled, An Examination of Bank Employees'Job Satisfaction after a Merger and Acquisition. IRB approval extends for a period of one year and will expire on April 3, 2010. Please inform the NCU IRB when the project is completed. Should the project require an extension, an application for an extension must be submitted within three months of the IRB expiration date. In the interim, if there are any changes in the research protocol described in the proposal, a written change request describing the proposed changes must be submitted for approval. Sincerely,

IRB Committee Chair Northcentral University

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Appendix H: Normality Ploys for AJDI and AJIG Scales

Histogram of Work on Present Job Subscale

300-

200
cr

100H

0.00

1.00 2.00 Work on Present Job

3.00

Figure 2. Histogram for work on present job subscale data.

Normal Q-Q Plot of Work on Present Job Subscale

Observed Value

Figure 3. Normal Q-Q Plot for work on present job subscale data.

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Histogram of Present Pay Subscale

120H 100H

0.00

1.00 Present Pay

2.00

3.00

Figure 4. Histogram for present pay subscale data.

Normal Q-Q Plot of Present Pay Subscale

1 Observed Value

Figure 5. Normal Q-Q Plot for present pay subscale data.

Histogram of Opportunities for Promotion Subscale

200-

150Frequency

o o i 500-'

"^

'

0.00

i ' i 1.00 2.00 Opportunities for Promotion

T 3.00

Figure 6. Histogram for opportunities for promotion subscale data. Normal Q-Q Plot of Opportunities for Promotion Subscale

Observed Value

Figure 7. Normal Q-Q Plot for opportunities for promotion subscale data.

159 Histogram of Supervision Subscale

250H

200H

&150H

100-

50H

0.00

1.00 Supervision

2.00

3.00

Figure 8. Histogram for supervision subscale data. Normal Q-Q Plot of Supervision Subscale

Observed Value

Figure 9. Normal Q-Q Plot for supervision subscale data.

Histogram of People at Work Subscale

30CH

20CH

100H

0.00

1.00 2.00 People at Work

3.00

Figure 10. Histogram for people at work subscale data. Normal Q-Q Plot of People at Work Subscale

Observed Value

Figure 11. Normal Q-Q Plot for people at work subscale data.

Histogram of Job in General Scale

20CH

0.00

1.00 2.00 Job in General

3.00

Figure 12. Histogram for job in general scale data.

Normal Q-Q Plot of Job in General Scale H

0H

-1-

o.-2H
LU

-3H

-4H
Observed Value

Figure 13. Normal Q-Q Plot for job in general scale data.