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) 2 © SHRM 2010

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. 3 © SHRM 2010

Employee’s Target Point Employee’s Resistance Point Employee’s Initial Request Employer-Employee Wage Negotiation Example Employee’s BATNAs (Another Job: $55,000; Get MBA) Employer’s Initial Offer Employer’s Target Point $50,000 $55,000 $60,000 $65,000 Employer’s Resistance Point Employer’s BATNAs (Another Candidate, Outsourcing) 4 © SHRM 2010

Dual Concerns and Conflict Styles: Employer vs. Employee Negotiations can also be thought of as a set of concerns from two parties. For example: Employer’s concerns: >Lower costs >Higher output or productivity from employee Employee’s concerns: >Higher wages and benefits >Job security 5 © SHRM 2010

Negotiation and Conflict Styles Example: Employer and Employee Employee outcomes: Higher wages and benefits; job security Integrative Distributive 6 © SHRM 2010

Negotiation and Conflict Styles Example: Employer and Employee Employer Concerns: Lower Cost; Higher Productivity Employee Concerns: Higher Wages and Benefits; Job Security Compete Collaborate Compromise Avoid Accommodate 7 © SHRM 2010

Negotiation and Conflict Styles Example: Employer and Employee Employer Concerns: Lower Cost; Higher Productivity Employee Concerns: Higher Wages and Benefits Compete Collaborate (Wage cuts) (Skill training: productivity or sales incentive compensation) Compromise (50 / 50 split) Avoid Accommodate (Outsource) (Big wage increases) 8 © SHRM 2010

Negotiation Summary Negotiation is about resolving disputes on divergent interests. Sometimes negotiations are distributive (win-lose). Negotiations can be collaborative, integrative win-win situations. 9 © SHRM 2010