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Labor Relations Overview
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Chapter 5 Negotiation
Models, Strategies, and
Tactics
PART IILabor Relations Overview
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-1
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-2
Chapter Outline
• Negotiating Sessions: “At the Table”• Critical Elements in a Negotiation: Information,
Time, Power• Ethics in Negotiations• Bargaining Strategies• Distributive Bargaining• Integrative Bargaining• Interest-Based Bargaining• Reaching Agreement
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-3
Figure 5.1 - A Model for Negotiating Sessions
Source: Courtesy of Lou Manchise, former directorof mediation services, Federal Mediation and Conciliation Service, “A Helpful Model for Negotiations,” unpublished manuscript (2008). Used by permission.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-4
Source: Courtesy of Lou Manchise, former directorof mediation services, Federal Mediation and Conciliation Service, “A Helpful Model for Negotiations,” unpublished manuscript (2008). Used by permission.
Figure 5.1 - A Model for Negotiating Sessions
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-5
Source: Courtesy of Lou Manchise, former directorof mediation services, Federal Mediation and Conciliation Service, “A Helpful Model for Negotiations,” unpublished manuscript (2008). Used by permission.
Figure 5.1 - A Model for Negotiating Sessions
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-6
Source: Courtesy of Lou Manchise, former directorof mediation services, Federal Mediation and Conciliation Service, “A Helpful Model for Negotiations,” unpublished manuscript (2008). Used by permission.
Figure 5.1 - A Model for Negotiating Sessions
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-7
Source: Courtesy of Lou Manchise, former directorof mediation services, Federal Mediation and Conciliation Service, “A Helpful Model for Negotiations,” unpublished manuscript (2008). Used by permission.
Figure 5.1 - A Model for Negotiating Sessions
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-8
Source: Courtesy of Lou Manchise, former directorof mediation services, Federal Mediation and Conciliation Service, “A Helpful Model for Negotiations,” unpublished manuscript (2008). Used by permission.
Figure 5.1 - A Model for Negotiating Sessions
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-9
Table 5.1 - Ethical and Unethical Bargaining Tactics
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-10
• Collective bargaining generally involves one of two strategic approaches:• Distributive • Integrative
• When considering which approach might be best for a given collective bargaining situation:• A negotiator should review information, timing,
and power• Specific issues to be negotiated• The people involved• General context of the negotiations
Bargaining Strategies
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-11
Distributive Bargaining
• A negotiation method described as a “win-lose” situation, in which resources are viewed as fixed and limited, and each side wants to maximize its share
• Can best be explained by five key elements:• Target point• Resistance point• Initial offer• Settlement range• Settlement point
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-12
• Three key starting values• Desired outcome• Bottom line• Opening offer• Negotiators make opening offers, with one of three
types of anchors• Facts• Extreme offer• Precedent
Distributive Bargaining
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-13
Figure 5.2 - Distributive Bargaining Negotiation Model: First-Year Base Wage Increase (percentage)
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-14
Negotiation Norms
• Relational norms• Fairness norms• Reciprocity• Good faith bargaining
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-15
Figure 5.5 - How Norms May AffectCounteroffers
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-16
Framing Positions
• Presenting an issue to the other side in a negotiation in a way that is convincing and causes the other side to “see” the proposal in a different light
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-17
Table 5.2 - Four Types of Frames (Applied to Grievance Settlement)
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-18
Use of Framing Questions
• Ask why• Ask why not• Ask what if• Ask for advice
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-19
• Both sides seek ways to integrate the interests of both sides into mutually agreeable options
Integrative Bargaining
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-20
• The integrative negotiator generally strives to achieve two goals: • To create as much value as possible for both sides• To claim as much value as possible for their own
interests
Integrative Bargaining
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-21
Table 5.3 - Common Differences between Distributive and Integrative Bargaining Techniques
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-22
• Emphasize positions versus interests• Separate people from issues• Focus on objective criteria• Develop mutual gains options
Principled Negotiations
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-23
Table 5.4 - The Positions versus Interests of Union and Management
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-24
Figure 5.6 - Steps in the Interest-Based Bargaining Negotiating Process
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-25
Advantages of IBB
• Improved communications• Uncovers additional ideas and thus superior
solutions to problems• Uncovers new options• Explain the critical “why” behind an interest or
proposal
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-26
Disadvantages of the IBB
• Time consuming• Negotiators may have difficulty transferring a
proposed creative option into a practical, concrete solution
• The standards suggested by IBB negotiators are often not precise, and are subjective, thus not easily agreed to by both parties
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-27
The Categorization Method
• An integrative negotiation method that includes:• Exchanging information• Developing a common list of issues• Agreeing on compatible issues• Exchanging equal value issues• Resolving remaining issues using distributive
bargaining
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-28
Figure 5.7 - The Five Steps of the Categorization Method of Integrative or “Win-Win” Bargaining
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-29
• Negotiators reach a decision• If agreement cannot be reached, this may be
the point of crisis
Reaching Agreement - Point of Crisis
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 5-30
• Knowing that an agreement has been reached, the people involved become psychologically committed to the agreement
The Closing Stage
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
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