Three out of four mergers are either disappointing or outright failures, and "people problems" are cited as the top integration failure factor.
The figures come from the human resource specialists Watson Wyatt.
Its strategic rewards consultant, Mr Roger Dolphin, explained: "Experience shows that people issues are consistently the most difficult to resolve and the reason why the majority of deals under perform.
"The ostrich approach to human capital during any integration is disastrous.
"However, a pre-meditated, well-managed integration strategy, often driven by human resources, can result in significant returns in terms of faster integration, lower deal costs and greater productivity."
Traditionally, the legal, financial and operational aspects of M&A deals have received the greatest attention, but executives who have been through the merger process are recognising that managing the human side of change is critical to maximising deal value.
Mr Dolphin pointed out: "As the attitude of the workforce can have a major impact on productivity, it is crucial to address its needs and issues quickly, effectively and strategically.
"The most important human capital factor to address is the 'me issue' - will I have a job? what about my pay and benefits? will I have to move?
"Companies frequently skip over this and end up sending unclear and sometimes conflicting messages."
Employees also want to know about the future direction of the organisation and their roles and required behaviour within it.
Mr Dolphin added: "Employees typically want to be a part of something special, and a contributor to both their own and the organisation's future success.
"Without clear decision-making and communications, employees perceive a lack of leadership, and this can quickly lead to high staff turnover, loss of productivity, customer problems, and ultimately inability to extract full value from the deal."
People problems occur throughout the whole process of deal-making, but thorough pre-planning can minimise their impact on productivity.
Mr Dolphin advised: "During the pre-deal planning stage, the acquirer should be trying to get a feel for the people strategy within the target company.
"Issues such as culture, the organisational structure of the company, leadership approaches and workforce development all need to be addressed."
At the integration stage, the two different regimes merge and people problems really begin to arise.
The new company approach may be alien to some employees, and possibly even threatening.
An effective integration strategy should predict areas of unease, and deal with them proactively, not reactively.
This strategy dictates the people agenda for the integration stage and it is often here, in the 12 months following acquisition, that the game is really won or lost.
It is during this post integration stage that political factions are most likely to emerge, as employees defend their own territory.
Harmonising the separate cultures and banishing the "us and them" factor requires hard work and consistent communications to smooth integration and maximise the true value of the deal.
Mr Dolphin suggested: "A key element of the success of the integration is to encourage universal focusing on the priority business issue, and by instilling a sense of pride and excitement about the future potential of the new company.
"Plan to do this, but also keep a clear eye on customer needs as this will help focus everyone's efforts."
A proactive approach to people problems proved vital when Watson Wyatt were asked to assist with the merger of two industrial businesses based at opposite
ends of the country. …