Laser hammering is a key and effective technique to correct the post-weld-shift in laser welding process. In order to obtain a detailed understanding of the shrinkage deformation principle and magnitude induced by laser Hammering, a finite-element-method (FEM) is employed to analyze the welding shift for the TO-CAN style laser diode package. Detailed relations between welding shift and the beam energy pulse width are obtained. A welding shift measurement system with two noncontact capacitive displacement sensors with high accuracy and high resolution is established. The measurement system can determine the shift direction or deformation angle in real time. The experiment results of this paper will be helpful for the selection of laser beam parameters in the laser hammering process to achieve fast and accurate shift correction.Index Terms-Laser diode, laser hammering, laser welding, package, post-weld-shift (PWS).