Chapter Objectives After studying this chapter and completing the exercises you should be able to: Assess your human, social, and relational capital and identify ways to increase it to enhance your value to, and leverage with, an employer. Identify and evaluate the challenges of negotiating in the workplace. Prepare for and execute a variety of workplace tesyimeiateset |g RON hus fr, we have considered the process of components of and in eapnnne aa iSamonihe Sprlcnton st fetyou aveleomed icspeaie stats eater aalyer Zea perscal ee We begin wits cer look neyosbons in the ey ee workplace, situations where you are The workplace sf with negotiations, whether you ae an acta g- eer ployee of the cganiaton os ehcenplayed independent contactor’ a some cases the negotiations involve the terms and conditions of an individ- ual’s employment (e-g., work schedule, pay, job duties, relationships with co-workers), while in others, an individual is representing his or her employer in negotiations with others (e.g., customers, suppliers). In this chapter, we explore these and other situations that involve negotiating and resolving conflict in the workplace. Develop a plan for dealing with excessive demands in the workplace, “For more on the difference between employees and independent contractors see htp://wwwis ov /businesses small ariel 04999210 ht From Chapter 12 of Negotiation and Dispute Res Pearson Education, Ine. All rights reserved First Edition. Beverly J. DeMarr, Suzanne C. de Janasz. Copyright © 2013 by 273274 Negotiating in the Workplace Chapter Scenario, Part | Jacinta joined CMC, a large auto manufacturer, @ month ago when she graduated from college with a degree in engineering, She is a quality assurance spe- When the parties know, like, and trust each other, and want to continue the relationship, it follows that negotiations will be more integrative, with a focus on producing the best outcomes for both parties. For example, an electrical contractor who has built a good relationship with a facilities manager is likely to be the first one called ‘when there is any electrical work to be done ‘Once you have identified the capital you already possess, the next step is to pinpoint what your employer needs, paying particular attention to needs within the ‘organization that are currently unsatisfied. The possibilities could range from aneed for a particular skill, such as knowing how to use anew computer program, to a need for someone to take on a special project. You should focus on needs that are both important to the organization and a good fit with your knowledge, skills, abili- ties, and interests. If you don’t currently have all of the skills or knowledge needed, think of how you might acquire it. Increasing your value to your employer increases your power in the relationship, which carries into all of your employment negotia tions. Exercise 1 at the end of this chapter provides a useful framework for this assessment 278276 Negotiating in the Workplace Chapter Scenario, Part Il Jacinta had been at CMC for only six months when there was a problem at one of its suppliers that required someone from CMC to be on site to resolve the problem, Normally this would have been handled by the senior QA specialist Doug, but he had just left for a two-week safari in Africa, Jacinta had to handle this by herself, which had her more than a little intim- idated. Not only was this her first time representing, CMC, but the supplier was known to be difficult Jacinta knew that she had to win the supplier over to get them to resolve the problem as soon as possible The problem was that she was quite shy, especially around people she didn’t know well. She was away from familiar surroundings and completely out of her comfort zone, She could talk technical details at great length, but had a hard time with small talk and get- ting to know people, In college she excelled at the technical aspects of the work, but never learned how to approach this type of situation. She was concerned that she wouldn’t be able to get them to correct the problem in a timely manner and that they might try to push her around. Jacinta’s situation was not unique. Many jobs today involve working with some- one from outside your department, ifnot outside the organization. Obviously, suppliers must work with customers and vice versa, but employment-related relationships go be- yond just salespeople and buyers. Depending on the nature of the product, a variety of ‘people from engineering, manufacturing, production control, and even accounting may be involved. Depending on your position, you may also have to work with outside auditors, representatives of accreditation bodies, consultants, the media, or even the government. You may also be involved in interviewing jab applicants and hiring new employees. All of these examples can involve negotiating and resolving disputes ‘There are a number of personality traits that influence negotiations. In general, people who are extroverts will have an edge because they are more comfortable dealing, with new people. Similarly, high self-monitors are able to read their negotiating part ners and adjust their behavior accordingly. Together, these traits help in establishing a relationship with a new negotiating partner inside or outside of the organization. Being upbeat and optimistic ets the tone for integrative negotiations, and displaying positive emotion increases the likelihood of a future business relationship, coming to agreement, and gaining concessions from the other party.® Points to Ponder 1. How comfortable are you with dealing with new people in a business setting? 2. What might you do to increase your confidence? '3. What is the potential downside of being extremely extroverted and high in self monitering? THE ART OF NEGOTIATION IN SALES Ithas been said that the art of negotiating may be the most difficult skill for any sales- person to develop” and that many salespeople aren’t effective negotiators because they're often too willing to do whatever it takes to make the sale.* This is likely due to 1 incentives built into their compensation plans. In most cases, part, if not all, of a salesperson’s income comes from commissions—typically a percentage of the dollar value of the sale. While some employers structure their commission system to pay a higher rate for products that are more profitable, the bottom line in sales is that if you get a sale—any sale—you get paid. People are motivated by incentives. Thus, it follows that salespeople will do whatever it takes to make a sale, Taken to the extreme, it can in- volve making unrealistic promises or engaging in hardball tactics just to get the sale. ‘Good negotiation skills are about much more than simply using distributive tactics to close the deal. Negotiation requires a different way of thinking: The aim is to satisfy the client, without giving up too much in the process.° Using the integrative approach, a salesperson must consider both her employer's andNegotiating in the Workplace FIGURE 1 The Sales Perspective Redefined “Approaching negotiations from a sales perspective, Contin posits that salespeople can be turned into strong negotiators by followin five step.'° The first isto avoid discussing price and focus more on value. People ae often willing to pay more for an tern they beleve they are getting value. tis why some people buy a Rolex instead of a Timex or a BMW instead of a VW. The second step isto build credibility with the customer. When a salesperson is viewed as an expert who is trying to help the customer find solutions that meet hs needs, the customer islikely to disclose more about his needs, increasing the lkeliood ofan integrative solution. Conn thid step isto “plan effectively and early" so as to anticipate the customer’ needs At the same time, a good sales negotiator understands the needs of her employer. Does your company have excess capacity that it needs to use? Is your company trying to expand into new markets or get a foot inthe door with a potentially large customer? The fourth step isto manage information 50 you ae not disclosing information that could put you a a disadvantage ifthe customer decides to play hardball. The fifth step, managing concessions, is ensuring that the concessions you make are indeed worth tH they aren't, ending the negotiation may be appropriate customer's interests and seek to create additional value for mutual gain, While receiving/ paying a fair price is obviously an interest, you need to think about other things that are valuable. For both parties, theze is likely value in building a long-term relationship. (Other common interests include quality level of the products and services offered, on- going product service and support, delivery schedules and terms, and even transfer of ‘ownership. Of course, if you are negotiating these types of issues, people from other areas (c.,, quality assurance, service, operations, production control, and shipping) will also likely be involved ‘To help identify the customer's interests, respond to a demand with questions seek- {ng to reveal the reason for the demand.” For example, ifthe customer asks for modifica- tions to your standard product, ask what she needs to accomplish. The additional information may help you find a way to meet the customer's objectives in a more efficient cor less costly manner. Ifa customer requests a shipper that you do not normally use, ask ‘way: The customer may simply not be familiar with your preferred method of shipping ‘Taking this approach from the first meeting with the customer is apt to lead to better out- ‘comes in the end. While many salespeople view negotiations as occurring only at the end of the sales process, the reality is that selling and negotiating take place concurrently. Figure 1 provides an example of how the sales perspective can be reframed. ‘THE NEGOTIATION PERSPECTIVE ‘The relationship you have with the other party has a significant impact on subsequent negotiations. When you approach sales from a negotiation perspective, the focus shifts from a list of dos and don'ts o developing a good relationship with customers. In mast cases salespeople want repeat business. Satisfaction with the relationship encourages expansion of the relationship." The best way to ensure that is to work to develop an on- going relationship with the customer from the beginning. This means getting to know the customer, her situation, and her needs. Reciprocity is a powerful force and helping. others achieve their objectives often results in them helping us to achieve ours. Thus, ‘you should try to understand the customer's challenges and look for ways that your ‘company can assist her in meeting them. Be responsive to your customer's requests for information and provide technical assistance as appropriate. In all your dealings with the customer and her representatives, be honest and forthcoming. If you know that you ‘won't be able to deliver on a promise, don’t make it. It is better for the long-term rela tionship to risk losing a sale than to risk losing the entire relationship Seek to create value beyond the customer's basic criteria for the product or service. Think about this as the sales equivalent of preferred qualifications for job applicants. A basic assumption about job applicants is that they meet the required qualifications or they wouldn’t have applied for the job. What sets them apart is the a7