Exercise 2: Employee and Employer Negotiation (Key steps during the flow):
Employer’s wordings/ Presentation | Theory/Idea application | Employee’s wordings/Presentation | |
1. | “Well, it’s okay for such discussion.” | Proposition 10 Ability and motivation to Process Information | State the aim of the conversation: negotiate salary and present the documentation you have prepared ”I would like to discuss with you about my present salary and share my point of view with you.” |
2. | (Active listening) | Proposition 10 | Start with a point (both can agree) and present the raise as a win-win situation. ”In my view, I hope I could get a raise of salary up to $35000 for my job position. It would be pleased for you to provide some opinions on such.” |
3. | (Active listening) | Proposition 10 | Solid record of my accomplishments: Value of me: ”I was promoted as a department head for three years already. I think the company has put me in an important position as the previous unit head left suddenly. My ability and qualification were recognized by Modern Tool Manufacturers and I paid an effort in assisting for the pass of that crisis moment.” |
4. | (Read the relevant document to show the respect for the employee) | Proposition 4 & 10 Escalation of Commitment | Offer documentation, such as complimentary letters or e-mails and other forms of recognition from customers, co-workers or supervisors.”Some customers also showed their appreciation for my work so far and here is some document that I would like to provide for you as a reference.” |
5. | "A raise would put you above your job category maximum. It seems that you already earn more than anyone else in the department for the promotion to the department head.” "I understand you point. However, Modern Tool Manufacturers Manufacturers actually has been suffered from a bad year. The staff with the same position with you got a similar salary as you according to their experience. If I make some adjustment for you, the remuneration packages for most of staff would be affected and it would lead to a bad effect on the whole financial system.” | Proposition 3 Influence based on Losses Looming Larger than Gains Proposition 5 Influence Based on the Status Quo Bias | Offer a salary proposal and prepare the documentation you have about comparative salaries in other organizations can support your case. "I may be making more than the rest, but don't you agree that if I work harder and accomplish more, I should be paid more?" Investment on me /the company’s loss: ”I learnt a lot of skills from Modern Tool Manufacturers which enhanced my career path very much. I enjoyed working with my colleagues and we cooperated very well. I am very familiar with the operation of Modern Tool Manufacturers. Before, you also stated that there was no doubt for my working ability. If I left this position, honestly, there would be a great effort for you to make on a new hire in order to take up my role for a period of time.” Business climate factors & New policy effect: ”There is actually an increasing demand of the marketing skills in the manufacturing industry in Hong Kong and even in the mainland. The new policy of supervision level staff would not be paid bonus would reduce the loyalty. There are other similar types of companies provided more competitive offers for the same position as me.” |
6. | (Active listening) | Proposition 8 Overweighting of Social comparisons | “It is glad to hear that you share the Modern Tool Manufacturers’s situation with me and understand my feeling. Maybe I would like to suggest some options for the rewards in order to make the least disturbance of the existing remuneration package. Let’s see if which alternative is feasible for you.” Several alternatives with equivalent value:1. Rise salary with a specific time frame ” First of all, would it be more feasible for raising my salary gradually? For instance, a raise of 5% with the first three months and then another 5% in the late three months?”2. Stock options ” Then, actually, would it be possible for Modern Tool Manufacturer providing staff the stock instead of bonus?” 3. Others considerations (Expense reimbursement, tuition reimbursement, medical insurance)”Of course, there are some alternatives on such issue as well. For instance, the business related expense would be reimbursed for including phone, computer (laptop), car and entertainment. The tuition reimbursement would be paid fully for the further education and training for staff as these would be benefit for the career path of staff in the long run. |
7. | “Your sharing of several alternatives is quite well. I think I would make the stock option for you. Since the new policy cannot change in this moment, the bonus would remain providing only for the one under supervision position. ”I know you have talent and qualifications to do your job well and also for your future career development. By the way, I refused for your request for few times before, as I would like you to become a more patient person. As you know, patience is essential in our daily work. Until now, I think it is the best time to give you reward as an encouragement. The arrangement would probably be effective next week. ” | End on a positive note “Thanks for listening. At last, I would like to know when will be such decision become effective?” “ Thank you for your appreciation on my work, boss! I will keep on working hard and try my best to repay for the company. ” |
Crash your boss in salary negotiate!
Guide with examples you have to remember.
Guide with examples you have to remember.
(1) describe the negotiation tactics that did not work well in your salary negotiation (false conflict, fixed-pie perception, compromise, delays, illusion of transparency, etc) and explain how they inhibit you from arriving at a win-win outcome
After a number of years of unsatisfactory raise, I reviewed and examined the ways and tactics I used in previous raise negotiations. I found that my failures were mainly attributed to the following reasons:
(a) False Conflict
Last year the performance of Modern Tool Manufacturer was spectacular. Learning painful lessons in the previous years, I was determined to be firm in the raise negotiation. Past interaction: if there is a history of conflict resolution with this person, think about how this history might affect the upcoming negotiation (E. Wertheim). At the same time, I anticipated that my boss would be hostile towards my request for a handsome raise. However, it turned out that he was gentle and mild. He was a skilled negotiator and has maneuvered the conversation around. His charm and amiable attitude softened my insistence on the amount of raise. False conflict occurs when people believe that their interests are incompatible with the other party’s interests when, in fact, they are not (Thompson, L., 2009). I had a wrong perception that the salary negotiation with my boss was completely a conflict. Thus, I forwent 75% of the initial raise requested and again got a nominal raise only.
(b) Compromise
Compromise pertains to slicing the pie, not expanding the pie (Thompson, L., 2009). As he said I was young and inexperienced for the job and would like to wait. I compromised and agreed to wait. However, the concession showed my failure to get the same offer with the others. The staff with the similar position with me got a higher salary as compared.
(c) Adopting a Cooperative Orientation
Three years ago, I was newly promoted to the post of Manager to head the Marketing Division in Modern Tool Manufacturers. At that time I was very grateful to my boss for my promotion. I therefore took a cooperative orientation in the negotiation for raise that year, wishing that he would appreciate my attitude and return me with a generous raise. During the negotiation, I didn’t dispute the standpoints he presented. As long as we had any discrepancy, I concurred to his standpoint. Negotiator’s intentions to cooperate often keep them from focusing on the right information at the right time (Thompson, L., 2009). Therefore, I missed the valuable time for focusing on the salary negotiation with my boss.
(d) Taking Extra Time to Negotiate
When I was promoted, I had asked for a raise already. However, my boss claimed that he would like to wait for me if I was able to handle all the jobs and took this in consideration. At that time, I believed that both of us required much more time in such negotiation. On one hand, my boss required to observe and supervise my work for such consideration. On the other hand, I required to gain more experience in order to become more competent and get the salary raise in the appropriate time. This also allowed my boss to approve my salary adjustment more reasonably in front of other staff. Extra time does not guarantee that negotiators will reach an integrative agreement and the quality of the negotiation does not improve with additional time (Thompson, L., 2009). Finally, three years passed and I still not received the one big jump.
Apart from the above, I have to concede that my boss is a tactful and even to some extent a cunning negotiator. He is able to assume full control in negotiations by employing tactics ranging from authoritative directions to soliciting for sympathy, thus making full advantages from these tactics. He is also skillful in using reasons like `you are still green in this field…’, `we wish to train up your patience…’, `it is time for you to make return to the company….’, `to achieve win-win situation, you need to sacrifice…’, etc. I seemed having few ways to counter them.
Last but not the least important, my irresolute personality also played a vital role in the previous Waterloo raise negotiations. To avoid recurrences, I perhaps need to revamp my tactics as well as my personality. Intangibles are often the key factors in many negotiations. (E. Wertheim, Northeastern University)
(3) describe the negotiation tactics that did work well in your salary negotiation (perspective-taking, inquiry about others' interests and priorities, offering information and priorities, unbundling of issues, multiple equivalent simultaneous package deals, and avoidance of single-issue offers) and explain how they facilitate arriving at a win-win outcome
(a) Perspective-taking
As an employer, he will like taking good control and advantage in cost to maximize employees work efficiency. Perspective taking also enhances problem-solving abilities, including the ability to jointly solve problems at the bargaining table. It is a cognitive ability to consider the world from another’s viewpoint (Thompson, L., 2009). So, we have to build in a new concept in his mind, which motivation and work efficiency could be reduced when the employee did not agree with the payoff. I think most of the boss and the company would not like to see such condition of the staff in the long run. Therefore, the present gain (not giving the raise in salary) could be higher than the future lost (poor efficiency of staff which affect the earnings of the division). By using the perspective-taking method with the boss, this allowed him to clear about the future result was decided by his present decision of whether approve the salary adjustment or not.
(b) Inquiry about others' interests and priorities
Negotiators who ask the counter-party about their preferences are much more likely to reach integrative agreements than negotiators who do not ask the other party about his or her priorities (Thompson, L. 2009). It is always a good idea to understand why employer concern and worry for not giving a salary significantly increase. This was because you can gain information from him on one side, and also, you may hold the right key during the negotiation. For instance:
(a) Perspective-taking
As an employer, he will like taking good control and advantage in cost to maximize employees work efficiency. Perspective taking also enhances problem-solving abilities, including the ability to jointly solve problems at the bargaining table. It is a cognitive ability to consider the world from another’s viewpoint (Thompson, L., 2009). So, we have to build in a new concept in his mind, which motivation and work efficiency could be reduced when the employee did not agree with the payoff. I think most of the boss and the company would not like to see such condition of the staff in the long run. Therefore, the present gain (not giving the raise in salary) could be higher than the future lost (poor efficiency of staff which affect the earnings of the division). By using the perspective-taking method with the boss, this allowed him to clear about the future result was decided by his present decision of whether approve the salary adjustment or not.
(b) Inquiry about others' interests and priorities
Negotiators who ask the counter-party about their preferences are much more likely to reach integrative agreements than negotiators who do not ask the other party about his or her priorities (Thompson, L. 2009). It is always a good idea to understand why employer concern and worry for not giving a salary significantly increase. This was because you can gain information from him on one side, and also, you may hold the right key during the negotiation. For instance:
1. Underlying interests:
I asked my boss’s opinions about the salary adjustment after the explanation about the investment of company, the business climate factors and the new policy effect. He then explained the company’s condition and his consideration with me. This could help me to proceed and suggest multiple alternatives for the arrangement for him.
2. Priorites:
2. Priorites:
During the negotiation, I have proven of my work performance which I worth this amount of salary. Besides, I am lower than the average compare with other managers. I showed my great concerns and hopefully to get the approval from my boss. Finally, he showed his interests to share stock.
(c) Offering information and priorities
It is not hurt to share with employer what is your purpose at the beginning. I told him that I was here for asking my salary increase up to $35000. That is a clear way to offering information and priorities, so he will know that the main topic we were going to negotiate about. If you share information, the other party will often share as well (Thompson, L., 2009). After sharing of my opinions about the salary adjustment, the boss therefore also expressed the company’s condition with me.
It is not hurt to share with employer what is your purpose at the beginning. I told him that I was here for asking my salary increase up to $35000. That is a clear way to offering information and priorities, so he will know that the main topic we were going to negotiate about. If you share information, the other party will often share as well (Thompson, L., 2009). After sharing of my opinions about the salary adjustment, the boss therefore also expressed the company’s condition with me.
(d) Unbundling of issues and avoidance of single-issue offers
It is not wise to haggle over on the single issue such as “increase $5000/month”. This was because you will fix your pie. You will like to keep added, unbundling and create issue to make the negotiation become win-win. If there is only one option provided to the boss, when he rejected then the employee would be pull into the dead end. The single-issue offers create a very small area for negotiators to do the trade-off. It bring less interest to lure negotiators make compromise agreements, and no win-win negotiators happens in most case. That is the reason why I suggested several alternatives and try to make package deals for the salary discussion.
(e) Multiple equivalent simultaneous package deals
When the boss is not willing to agree about my suggested target increase of $5000 for the salary, it is necessary for us to make multiple offers of equivalent value simultaneously to change the situation. For examples: (a) Rise salary with a specific time frame (b) Stock options , providing staff the stock instead of bonus.
(4) Analyze and explain how you capitalize on identifying differences in valuation, expectations, risk attitude, time preferences, and capabilities to achieve a win-win negotiation outcome
Capitalizing on Differences | Employee | Boss | References |
Difference in valuation (Analysis and explanation) | Value the highest that there is an adjustment of what he could receive, not mainly focus on which alternative l Suggested multiple offers of equivalent value simultaneously (raise salary, stock option, other considerations) l Stock option will not affect the company’s cash flow and expenditure. l The employee would share more responsibilities as the financial condition of Modern Tool Manufactures would affect him directly. When the company earned more, the employee could gain more reward; When the company lost money, the employee would also suffer. | Higher preference to avoid raise salary l Not prefer to raise salary but giving the bonus because this reduced the expenditure or cut the cost. l The decision could help the employee to become more loyal and hard working as shared responsibilities. | l Successful negotiations often depend on finding the win-win aspects in any situation. Only shift to a win-lose made if all else fails. (Wertheim, E.) |
Differences in expectations (Analysis and explanation) | l Expect the sales will increase that his qualifications and talent can help their marketing division has a better development. l The stock option instead of the bonus and raise salary can reduce the cost for company; the employee return is based on the company sales and the success on its marketing division development. | l Expects the expenditure and cost will increase steadily due to inflation. l Carries out the new policy to cut the bonus above the supervision position and raise little level of salary | l Negotiation often involves uncertainty, negotiators differ in their forecasters or beliefs, about what will happen in the future. (Thompson, L., 2009) l Negotiators will often aim to build strong coalitions to weaken the other parity’s alternatives. (Bazerman & Malhotra, 2008) |
Differences in risk attitudes (Analysis and explanation) | l The worst situation of the salary negotiation failure, the employee would finally leave the company. l Taking a higher risk as he would lose his job as compared with the boss l Risk-averse l Has gain-frame and is more likely to logroll in other alternatives. Therefore, even the boss would not directly increase the salary, he would like to achieve a win-win negotiation instead of worsen the long term relationship. l Enjoy the immediate adjustment by receiving the stock | l Lose a department head only. l Risk-seeking l Still control the whole system and keep the policy to reduce the change of the remuneration package of most of staff. | l Negotiators agree on the probability of future events but feel differently about taking risks. Negotiators who have a gain-frame are more likely to logroll or trade off issues in a win-win fashion. (Thompson, L., 2009) |
Differences in time preferences (Analysis and explanation) | More impatient as he requested for few times salary adjustment before but all were fail l Keep on suffering as his present salary was even lesser than the staff who had the same job responsibilities. l Prepared well at this time and did not let anything fail again for negotiate for the money. | Can enjoy the time frame advantage and wait l Enjoyed lesser cost for the few times delayed salary adjustment already. | l People may value the same event quite differently depending on when it occurs. Two partners in a joint venture might allocate the initial profits to the partner who has high costs for time, whereas the partner who can wait will achieve greater profits over a longer, delayed period. (Thompson, L., 2009) |
Differences in capabilities (Analysis and explanation) | l Has strong salesmanship technique and market information. l After motivate, employee will more hard working to increase the company’s sales and future development. | l Has different resources, capital, support staff and management skills. l Use suitable policy (Stock option) to support staff can motivate and make employee more loyalty. | l People differ not only in their tastes, probability assessments, and risk preferences; they also differ in their capabilities, endowments, and skills. (Thompson, L., 2009) l Therefore they may combine their differing skills and expertise in a mutually beneficial way. (Thompson, L., 2009) |
(6) References
1 North Central Regional Educational Laboratory. Building Collaborative Partnerships. Source: http://www.ncrel.org/sdrs/areas/issues/envrnmnt/css/ppt/chap1.htm
2 Leigh L. Thompson. The Mind and Heart of the Negotiator, 4th Edition. Establishing Trust and Building a Relationship, Chapter 6(129-158).
3 Leigh L. Thompson. The Mind and Heart of the Negotiator, 4th Edition. Win-Win Negotiation: Expanding the Pie, Chapter 4(74-95)
4 Deepak Malhotra, Max H. Bazerman. Psychological Influence in Negotiation: An Introduction Long Overdue. Journal of Management. http://jom.sagepub.com
6 E. Wertheim, Northeastern University. Negotiations and Resolving Conflicts: An Overview.
7 James K. Sebenius. The Hidden Challenge of Cross-Border Negotiations. Harvard Business Review (March 2002).
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