Introduction to Negotiation Concepts

Richard A. Posthuma, J.D., Ph.D., GPHR, SPHR 2010

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)

SHRM 2010

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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.

SHRM 2010

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Employer-Employee Wage Negotiation Example

Employees BATNAs (Another Job: $55,000; Get MBA)

Employees Resistance Point

Employees Target Point

Employees Initial Request

$50,000 $65,000 Employers Initial Offer

$55,000

$60,000

Employers Target Point

Employers Resistance Point Employers BATNAs (Another Candidate, Outsourcing)

SHRM 2010

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Dual Concerns and Conflict Styles: Employer vs. Employee

Negotiations can also be thought of as a set of concerns from two parties. For example: Employers concerns: Lower costs Higher output or productivity from employee Employees concerns: Higher wages and benefits Job security

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Negotiation and Conflict Styles Example: Employer and Employee

iv at r eg t In

Di str

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Employee outcomes: Higher wages and benefits; job security

SHRM 2010

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Negotiation and Conflict Styles Example: Employer and Employee

Compete Collaborate

Compromise

Avoid

Accommodate

Employee Concerns: Higher Wages and Benefits; Job Security

SHRM 2010

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Negotiation and Conflict Styles Example: Employer and Employee

Compete (Wage cuts) Collaborate (Skill training: productivity or sales incentive compensation) Compromise (50 / 50 split) Avoid (Outsource) Employee Concerns: Higher Wages and Benefits Accommodate (Big wage increases)

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Negotiation Summary
Negotiation is about resolving disputes on divergent interests. Sometimes negotiations are distributive (win-lose). Negotiations can be collaborative, integrative win-win situations.

SHRM 2010

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Thank you!

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