Negotiations PDF

Negotiations  Negotiation Exercise Employer: Imagine you are negotiating with a union representing your employees. The union is seeking an increase in wages and enhanced benefits for its members. You are prepared to discuss a wage increase within a range of 3-5%, and you are o...

Negotiations  Negotiation Exercise Employer: Imagine you are negotiating with a union representing your employees. The union is seeking an increase in wages and enhanced benefits for its members. You are prepared to discuss a wage increase within a range of 3-5%, and you are open to exploring options for improving benefits, including healthcare, paid leave, and retirement contributions, while ensuring the financial sustainability of the company. Union Representative: Imagine you are a union representative negotiating on behalf of your members. You are advocating for a wage increase of at least 8-10%, as well as improvements to health insurance, paid time off, and retirement plans. The union believes that these increases and benefits are essential to reflect the value of the workers, ensure their well-being, and remain competitive in the labor market. The goal is to reach an agreement that fairly compensates employees and supports their long- term security. 4 S A L A R Y FA C TO R S Your salary will ultimately be based on four factors: 1. Market rates for the job 2. Assessment of your qualifications 3. The employer’s budget 4. Your skill in negotiating Negotiating salary Research shows that about 70% of managers expect to negotiate salary and benefits when making an offer to a candidate Only about half of people try to negotiate It may feel daunting or uncomfortable to discuss money but know that companies expect you to do it B AT N A Best Alternative To a Negotiated Agreement What is the best you can do when the other party doesn’t want to negotiate? If you know you have strong alternatives (you have a strong BATNA), you can be bolder in your negotiations If you know they have weak alternatives (they have a weak BATNA), you can be bolder in your negotiations Employer has lots of strong Employer has lots of strong job candidates. job candidates. Job candidate has lots of Job candidate has no other good offers. offers. Employer has few good job Employer has few good job candidates. candidates. Job candidate has lots of Job candidate has no other good offers. offers. Belittling your BATNA The other party might try to make you cave in by belittling your BATNA Don’t let the other party shake your resolve  What are some other items/ways you could negotiate? Benefits Stock options or Equity Expedited Salary Review Time off Schedule/Work Hours Childcare Hybrid Work Wellness Perks IT ’S NOT ALL Professional Development Funds ABOUT THE Technology Moving expenses SALARY Tuition benefits Title D E T E R M I N E A Z O PA Zone Of Possible Agreement ANCHORING Being the first to suggest a specific target, such as the salary for the job, can anchor negotiators to that target Consequences of anchoring Evidence suggests making the initial offer moves the outcome in your favor Risk factor: may end the negotiation or may send a message of toughness that may harm the negotiations or relationships in the long run. A N C H O R W I T H T H E Z O PA I N M I N D Your anchor is where you start and should be relatively high, so you have room to move down. Not always possible to be the one to anchor, but sometimes companies will first ask what you are looking for. You should have a point you know in advance where you will walk away – the resistance point Phantom Anchors A seller might say, “I was going to say $10,000, but how about $8,000”. The seller wants $8,000 but by saying $10,000 first, it makes it seem like a concession Studies show that negotiators using offers with (versus without) phantom anchors receive less aggressive counteroffers and more beneficial agreements in negotiations, but can also seem more manipulative Phantom anchors represent a powerful, yet risky and theoretically understudied, strategy Multiple Equivalent Offers Simultaneously (MESOs) Present multiple offers that you equally value simultaneously at the negotiation table For example, ask for 80k with one week vacation or 75k with two weeks vacation or 70k with three weeks vacation Other party will find it difficult to reject all your offers Makes you appear more flexible Requires you to do thorough preparation Hands-are-tied strategy The other party might say that their hands are tied or that they have only limited discretion to negotiate with you Do what you can to find out if these tactics are genuine You may find that you need to negotiate with someone who has greater authority to do business with you Take-it-or-leave-it negotiation strategy Offers should rarely be nonnegotiable To defuse this hard-bargaining tactic, adopt a choice mindset - a state of mind in which people have choices no matter what situation they are in Helps people ignore ultimatums – leads one to believe that there is more room to negotiate, despite what their counterpart says Wait for a counteroffer When you make an offer, you may find that the other party asks you to make a concession before making a counteroffer herself Don’t bid against yourself by reducing your demands; instead, indicate that you are waiting for a counteroffer Good cop, bad cop When facing off with a two-negotiator team, you may find that one person is reasonable, and the other is tough Realize that they are working together and don’t be taken in by such hard-bargaining tactics Revisit it in the future You may find that the other party suggests “we revisit the issue in the future” This is often done with the hope that you will forget about it Six principles of persuasion Reciprocity Commitment and consistency Social proof Liking Authority Scarcity  Negotiation Tournament You and your partner will adopt the role of hiring manager and prospective employee. You will remain either the hiring manager or employee throughout this entire exercise. You will engage in a negotiation for three minutes based on the following prompt: Hiring manager: Imagine you are the hiring manager for your company. You are negotiating the contract with this prospective employee. You would like to hire an employee with a salary between $75K and $80K. Prospective Employee: Imagine you are a prospective employee. You would like a salary between $85K and $90K. If you don’t come to an agreement, you can decide to not close the deal After the three minutes, you must move to the next hiring manager or employee and engage in another negotiation for another three minutes. The winning employee will have the highest salary negotiated. The winning hiring manager will have the lowest salary negotiated. Several months before your performance review Set up a meeting to discuss any guidance your boss has for you for how to be a top performer Be upfront about your goal of obtaining a raise in the future Take away a few specific things that your boss looks for in a top performer Track your performance Keep a log on how well you are meeting the metrics your boss cares about If you are in sales, track your sales numbers; if you are in finance, track your stock returns Occasionally let your boss know of how well you are doing At the meeting A detailed report about how you have met the metrics your boss highlighted Additional ways you could see yourself benefitting the company in the future Current salary Competitive salary from other companies  What if your boss says no? Try asking again Don’t be afraid to feel a bit awkward Remember there are other things to negotiate other than salary