NEGOTIATIONS AND BARGAINING

NEGOTIATIONS AND BARGAINING

Both individual and collective forms of employee relations depend upon negotiations – they involve bargaining.

(1) Two Extreme Positions
Such bargaining situations should always be thought in terms of the following diagram with two poles at the extreme points as shown:

 Pure Negotiations
 Joint Problem Solving

(i) Pure Negotiations
When management and union are incompatible, opposed and mutually destructive, it is a lose-lose situation. Important forces are keeping them apart and negotiations tend to be distributive when the size of the cake is known and it is to be shared.

(ii) Joint Problem Solving
This is the other extreme situation. It represents the integrative approach. Such behaviors take place when objectives of both the union and management are compatible, supportive and mutually reinforcing. It is a win-win situation. Although it is rare, efforts should be made to move as near to this situation as possible.
Managers tend to operate between the two polarities. The extent to which a negotiator can move towards the joint problem-solving position depends upon the followings:

 The Issue
 The situation
 The people involved
 The negotiating behaviors displayed

(2) Model for Bargaining
There are several models available for bargaining. However, a popular one by Lyons (1988) has the following four stages:

(i) Initial positioning stage
Two sides set out their bargaining position and typically, both parties seem to be rigid and unwilling to compromise. Heated discussions may be marked with a great deal of hostility at this stage. The gap between two positions may be so great that negotiations may seem doomed to failure.

(ii) Testing stage
After protracted and fruitless debate, negotiations move to the stage of informal probing. Each party checks out details of the other side‟s demands to identify issues that are:
 Really un-modifiable
 Open to compromise

(iii) Concession stage
Some concessions emerge leading to exchange of tentative proposals.
(iv) Settlement stage
A breakthrough happens and bargaining leads to an agreement that is finally signed and sealed.

(3) Skills required for effective bargaining
Lyons (1988) has identified the following skill sets that can enhance skills for bargaining:

(i) Analysis
Negotiators should have the ability to analyze the situation from own and other sides‟ perspective quickly. Negotiators should be able to think through the complete process from the beginning and decide on:
 Items that can be agreed on a win-win basis
 Items that can be agreed on a win-lose basis
Negotiators must remember that winning a small concession is not worthwhile if it damages the working relationship long term. Win-win deals happen when both sides feel they have gained and are always preferred.

(ii) Effective argument
Effective communication requires a great deal of patience. Good negotiators have to achieve a balance between aggressive and submissive styles of the conversation by being assertive when one conveys one‟s viewpoint while simultaneously listening to the contrarian views. Abusive and petty-mindedness destroy mutual respect. It is necessary to keep communication open however unsuccessful bargaining may be.

(iii) Signals of cooperation
Skilled negotiators are able to sense and seize small signs and clues of compromise, consensus, and cooperation. They use the tit-for-tat principle and return every compromise offered with a concession from their side. Every offer should be conditional to a cooperative response.

(iv) Attention to details
Negotiations should be comprehensive and negotiators should have an eye for details. In bargaining, there is no room for the late withdrawal of an offer made!