HR Knowledge : Manage workplace conflicts through negotiation - SHRM India

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Negotiations can also be thought of as a set of concerns from two parties. Negotiation is about resolving disputes on divergent interests.

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  • This presentation provides an introduction to some negotiation concepts and ideas that will be helpful as you work through actual negotiations or through the negotiation exercises included in this learning module.
  • Negotiation is a process in which two or more people, businesses, etc. (called “parties”) discuss how they can reach an agreement on issues that affect both of them. Negotiation is a voluntary process, because at any time either party could decide to end the negotiations.
    In negotiation, there can be one or there can be many different topics (sometimes called issues) that the parties discuss.
    In the workplace, it is common for employers and employees to discuss issues related to wages, benefits, work assignments, etc. Sometimes a more serious dispute arises in which the employee files a lawsuit against the employer. However, most lawsuits are voluntarily resolved before there is ever a trial.
  • There are several terms that can help you understand the content of negotiations.
    “Positions” relate to a party’s demands in negotiations. These positions include:
    Initial offer/demand
    Target point
    Resistance point
    BATNA
    (See definitions on slide.)
    Source:
    Lewicki, R J., Barry, B., Saunders D. M., Minton, J. W. (2003). Negotiation, 4th Edition. Irwin McGraw Hill.
  • In this example, there is a wage negotiation between a job candidate and an employer.
    Employee’s Positions: The top light blue line indicates that the employee is thinking about getting as much as possible from this negotiation. The employee’s initial request is for a salary of $65,000 per year. However, the employee would be happy to end up with a salary of $60,000 (target point). However, if the salary is less than $55,000 (resistance point), then the employee will turn down the job because he has two BATNAs: He could either accept another job that pays $57,000, or go back to school and get his MBA in the hopes that in a year or two he’ll be able to get a better-paying job.
    Employer’s Positions: The bottom light blue line indicates that the employer is trying to pay as little as possible. The employer starts the negotiation by offering $50,000 per year. However, the employer knows that it is willing to pay $55,000 per year. The employer is willing to pay as much as $60,000 per year. If the candidate demands more than this, the employer will refuse. The employer’s BATNAs include other job candidates, or perhaps outsourcing the work to another company.
    In this example, a salary somewhere within the range of $55,000 to $60,000 (the resistance points of the two parties) should be acceptable. If the negotiators are both reasonable and skilled, they should be able to reach an agreement within this range.
  • Negotiation is a process in which two or more people, businesses, etc. (called “parties”) discuss how they can reach an agreement on issues that affect both of them. Negotiation is a voluntary process, because at any time either party could decide to end the negotiations.
    In negotiation, there can be one or there can be many different topics (sometimes called issues) that the parties discuss.
    In the workplace, it is common for employers and employees to discuss issues related to wages, benefits, work assignments, etc. Sometimes a more serious dispute arises in which the employee files a lawsuit against the employer. However, most lawsuits are voluntarily resolved before there is ever a trial.
  • This chart illustrates how employers and employees can be either more integrative or more distributive in their approaches to conflicts (Ury, 1991, Fisher, Ury, & Patton, 1991).
    When they are more distributive, then either the employer or the employee’s concerns are met. This is a Win-Lose approach. When they are more integrative, then there is the possibility that the concerns of both the employer and the employee can be met.
  • This figure illustrates how this might work with a conflict between an employer and employee over wages and benefits. The dual concerns of two different parties can lead to five different types of conflict styles or approaches.
    Various authors have proposed similar two-dimensional frameworks (Filley, 1975; Hall, 1969; Lewicki, Barry, Saunders, & Minton, 2003; Pruitt, & Rubin, 1986; Rahim, 1983, 1992; Rubin, Pruitt, & Kim, 1986; Thomas 1992; Thomas & Kilman, 1974).
    The employer wants labor costs to be lower, and output or sales to be higher. The employee wants higher wages and benefits. Let’s look at this from the point of view of the employer. The employer could either compete, meaning that they’d focus solely on their own interests; compromise, meaning that they’d focus on their own concerns and those of their employee and make some concessions; accommodate, meaning that they’d give the employee what they want; avoid, meaning that they’d not deal with the situation; or collaborate, meaning that they’d try to keep labor costs low and get high productivity, but also pay high wages.
    Competing and accommodating are more distributive (win-lose) styles. However, as you move from avoiding to compromising to collaborating, the conflict style becomes more integrative (win-win).
  • This chart further details how this might work in conflicts between employers and employees.
    If the employer adopts a competitive stance, they may simply implement wage cuts to reduce labor costs. In the short term, this is a win for the employer and a loss for the employee. Thus, this is an example of a distributive approach. By contrast, if the employee has a lot of bargaining power, he might be able to force the employer to accommodate his demands and get a big wage increase. Again, this is a distributive (win-lose) outcome.
    Alternatively, the employer could simply avoid dealing with employees and outsource or offshore the work. The employer could be more integrative and compromise with employees by giving them some of what they want, but this will also increase their costs. However, a more integrative solution would be to find a way that labor costs could be kept low through increases in productivity, while simultaneously increasing employee income. For example, the employer could spend money on employee skill training to improve worker productivity, or the employer might change the compensation system to an outcome or incentive-based system where employees get paid more when they produce (or sell) more. This is an integrative, win-win, solution because the concerns of both the employer and the employees are addressed.
  • This presentation provides an introduction to some negotiation concepts and ideas that will be helpful as you work through actual negotiations or through the negotiation exercises included in this learning module.
  • HR Knowledge : Manage workplace conflicts through negotiation - SHRM India

    1. 1. Introduction to Negotiation Concepts Richard A. Posthuma, J.D., Ph.D., GPHR, SPHR 2010
    2. 2. For more on Indian HR industry, click here Negotiation • Goals > Two parties can voluntary reach an agreement to resolve a dispute. • Issues > The things that they are talking about (e.g., wages, benefits, lawsuits) 2 © SHRM 2010
    3. 3. For more on Indian HR industry, click here Positions • Initial offer/demand. This is where you start the negotiation. • Target point. This is where you reasonably would like to end up in negotiation. • Resistance point. This is as far as you are willing to go to reach an agreement. • BATNA. This is your Best Alternative To a Negotiated Agreement. > It often influences your resistance point. 3 © SHRM 2010
    4. 4. For more on Indian HR industry, click here Employee’s Target Point Employee’s Resistance Point Employee’s Initial Request Employer-Employee Wage Negotiation Example Employee’s BATNAs (Another Job: $55,000; Get MBA) Employer’s Initial Offer Employer’s Target Point $50,000 $55,000 $60,000 $65,000 Employer’s Resistance Point Employer’s BATNAs (Another Candidate, Outsourcing) 4 © SHRM 2010
    5. 5. For more on Indian HR industry, click here • Negotiations can also be thought of as a set of concerns from two parties. • For example: • Employer’s concerns: • Lower costs • Higher output or productivity from employee • Employee’s concerns: • Higher wages and benefits • Job security 5 © SHRM 2010 Dual Concerns and Conflict Styles: Employer vs. Employee
    6. 6. For more on Indian HR industry, click here Negotiation and Conflict Styles Example: Employer and Employee Employee outcomes: Higher wages and benefits; job security Integrative Distributive 6 © SHRM 2010
    7. 7. For more on Indian HR industry, click here Negotiation and Conflict Styles Example: Employer and Employee Employee Concerns: Higher Wages and Benefits; Job Security Compete Collaborate Compromise Avoid Accommodate 7 © SHRM 2010
    8. 8. For more on Indian HR industry, click here Negotiation and Conflict Styles Example: Employer and Employee Employee Concerns: Higher Wages and Benefits Compete Collaborate (Wage cuts) (Skill training: productivity or sales incentive compensation) Compromise (50 / 50 split) Avoid Accommodate (Outsource) (Big wage increases) 8 © SHRM 2010
    9. 9. For more on Indian HR industry, click here Negotiation Summary • Negotiation is about resolving disputes on divergent interests. • Sometimes negotiations are distributive (win-lose). • Negotiations can be collaborative, integrative win-win situations. 9 © SHRM 2010
    10. 10. Thank you!! For more on Indian HR industry, click here

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