Angel and Devil Get Win-win
(Why this topic? In employment relation, employer will see himself/herself as Angel, who offers a job with good salary to employees, but employees are devils since they are nonstop to ask for more to share the company profit. Vice versa, employees will see themselves as Angels, who are hard working and fully contribute to the company, but employers are devils as they always take advantage of employees and cut labour cost.)
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I. The Story Background
Honey Bee Company is a multinational soft-drink company with over 1,500 employees. Headquarter is in Hong Kong with 10 global branches, five in Asia, four in Europe and one in USA. As globalization and cultural diversity in Hong Kong office, the employees came from different countries and with different expatriates such as American, French, Japanese, Australian and Chinese work together.
The human resources policy and pay scale of this company are similar as Hong Kong Government. Promotion and increment in salary are not only depended on the performance, but also related to the year of service. The regular operation is handled by each branch, but each branch has different budget. All the promotion, salary increment and any benefit changes need to get HK headquarters’ approval.
Angela is an American who joined Honey Bee Company Headquarter since her graduation from a leading school of management with MBA qualifications. She worked for 2 years as Assistant Junior Manager and being promoted as Unit Heads for 3 years. Her job is mainly focus on the sales operations in Hong Kong.
As Angela found that her salary is $5,000 lower than other unit heads and she has no bonus after the policy change, she would like to have a negotiation with me, her boss, for a “big jump” in her salary.
II. The Way to Achieve Heavenly Outcome (Win-Win Outcome)
In order to produce a satisfactory arrangement for both of us, we invested half day in our negotiation process. I found a conference room with sofa and café corner to ensure that we can negotiate in a comfortable environment with no interruption. 
1.
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about the discussion approach. As an employer, I tried
to aviod adapting below tactics that inhibit us
from arriving at a win-win outcome:
1.1. False Conflict
In Angela’s view, it is unfair as other unit heads’ monthly salary are $5,000 higher than her and there is bonus at year-end for others but not her due to the policy change. Therefore, insistence on the fairness to all staff with total income paid according to the experience and age instead of paying the same amount to all staff in same level will lead to false conflict and cause we cannot achieve the win-win outcome.
1.2. Fixed-Pie Perception
The fixed-pie perception is the belief that the other party’s interests are directly and completely opposed to one’s own interests (Leigh L. Thompson, 2009).
Angela would like to have salary increment to the same level as other unit heads. I can provide her the options, allowance and other fringe benefits. However, this is not a win-win outcome as this is just a short-term solution to increase the money she gets. With outstanding academic background, I am confident that Angela can be further developed and have good progression in coming years. She should not just focus on the short-term salary increase but the long-term career development that we provide to her to expand the pie.
1.3. Compromise
Compromise is to slicing the pie which does not really ensure that a win-win negotiation has been achieved.
Angela and I can compromise on the increase in payment by providing the few options to her. To influence Angela, I tried to altering the target’s incentives and/or altering the target’s information set (Malhotra & Bazerman, 2008). Although the payment can be increased, the focus on my side is to retain the talent staff in my company for the expansion of the company. If I increased the payment to Angela, this is not a win-win situation as I am not sure if she will stay in our company after the increment.
1.4. Delays
The delay in negotiation can be a tactic to inhibit the win-win outcome.
If I delay the conversion with Angela on the salary increment, Angela will not satisfy with not receiving response shortly. With little discussion to understand the interests of each other, the win-win outcome cannot be reached due to the different focus on our expectations. Therefore, an early discussion is encouraged to understand Angela’s expectation and advise her on our expectations. Also, we can establish trust in the meeting with her to come up with the win-win solution.
1.5. Illusion of Transparent
Illusion of transparent is the situation that the interests of the two parties are not transparent to the other.
In our view, the salary range of staff and personal career development plan for each staff should be kept confidential as these are the company’s financial and human resources plan. As Angela does not know the plan of the company, there is illusion to her that what we are doing is not meeting her expectation. Also, the change in policy on no bonus given to supervision position in this year is not transparent to her until other staffs get the bonus. This also becomes a road block to inhibit the win-win situation.
2. Useful Tactics (Flying to Heavenly Outcome)
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achieve the objectives:
2.1. Information Gathering and Trust Building
Make your negotiated decision based on principles and results, not emotions or pressure (Wertheim, E. 2007). I did some research before the negotiation and would like to use them to support my views objectively. Some documents were prepared and shared with Angela to explain the existing and prediction of the economic conditions. Also, Angela gathered the recent salary report and data analysis of Hong Kong job market. We used the method of information sharing as the way to build trust. Knowledge-based trust is grounded in behavioral predictability, and it occurs when a person has enough information about others to understand them and accurately predict their behavior (Leigh L. Thompsn, 2009). We believed that a trust relationship will help us to achieve the win-win situation.
2.2. Perspective-taking
We used the perspective-taking as one of tactics. By taking the perspective of the other party, negotiators attempt to see the world through the counterparty’s eyes (Leigh L. Thompsn, 2009). I put myself into her position and tried to understand what she needs. As a young and well trained staff, she is looking for a further career development and higher reward of her hard effort. She would like to get a fair deal from the company. Also, she understood that cost control is one of the main company’s objectives and her loyalty is appreciated by me.
2.3. Inquiry about others’ interests and priorities
I asked her questions regarding her interests and priorities, what achievement she would like to get in the coming few years (short-term plan) and invited her to share about her ten years career plan (long-term goals) with me. Such inquires helped me to further understand her and showed my caring.
2.4. Offering information and priorities
Meanwhile, she also asked me my expectation on her and the company’s 3-year plan. I explained to Angela that the company announces a global expansion project which is one of the main projects in the next few years and most unit heads are interested to join or involve in this project. I disclosed more detailed information and let her know it is a great opportunity for staff career development.
2.5. Unbundling of issues, avoidance of single-issue offers and multiple
equivalent simultaneous package deals
equivalent simultaneous package deals
I tried to un-bundle the issue by using adept at expanding the set of negotiable issue. Apart from focusing on salary increment, I considered to provide more benefits such as better medical allowance and stock options, or other package e.g. new contract with an end-of-contract gratuity. I offered three different packages with difference arrangements for her to choose. Angela also let me knew her options:
Option
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Honey Bee Company
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Angela
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1
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Increase salary with annual normal rate and change the medical allowance from HK$1,500 to HK$5,000 per month on reimbursement base
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Request over 16% salary increment and promotion
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2
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Allow employee to buy 1,000 shares of company stock options with 30% discount. The options can be exercised after 1-year service.
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Join the expansion project, second to worldwide offices for further exposure with HK2,000 living cash allowance per month
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3
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Change the permanent contract to 2-year contract with an end-of-contract gratuity equivalent to 15% of the total basic salary.
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Ask for 80,000 sales incentive bonus per year if the target is met
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Negotiating each issue separately does not allow negotiators to make trade-offs between issues. (Leigh L. Thompsn, 2009) and Negotiators who make multiple equivalent offers enjoy more profitable negotiated outcomes and evaluated more favorably by the other party. (Leigh L. Thompsn, 2009)
2.6. Differences identification
Unders these options, we felt easier to make trade-offs and comparison. We were conformable for the trade-off made, more satisfied and enjoyed with the negotiation outcome. Making multiple offers simultaneously will increase the chance of sucessful negotiation. At the same time, we had to contol our budget. Therefore, we had to re-bundle those options into several equal value packages and each package should have different value to Angela. We achieved our "win" situation by controlling the budget. On the other hand, Angela achieved her "win" situation by choosing the package which best fit and highest value for her.
Finally, we re-bundled to these plans: (a) increase salary with annual normal rate + join the expansion project + gratuity bonus; (b) HK$5,000 medical allowance + stock options + year-end incentive bonus; (c) join the expansion project + HK$2,000 living allowance + HK$5,000 medical allowance.
During the meeting, we also tried to exploit our difference of preferences to capitalize on integrative agreements:
2.6.1. Differences in Valuation
The further global expansion is the main objective of the company and Angela is interested in career development and much more exposure.
2.6.2. Differences in Expectations
For the company, it expected to control the labor cost effectively. And Angela would like to get better salary increment or a big money.
2.6.3. Differences in Risk Attitudes
The company can afford to be risk-seeking since Angela is replaceable, even though it is not easily to find the same caliber staff shortly. Angela is risk-averse as it is difficult for her to find a similar job in multinational company in recent poor economic condition.
2.6.4. Differences in Time Preferences
As an employee, Angela is more impatient than her boss. She would like to get the negotiation result as soon as possible in order to plan her careers and personal life in coming few years.
2.6.5. Differences in Capabilities
The company has vision to expand and made investment all over the world. Angela is an energetic staff and has potential to become a leader in higher level.
III. Heavenly Outcome (Win-win outcome)
Luckily, the tactics that benefited the negotiation were well used and I avoided all ineffective tactics. After a few round discussion, I tried to focus on our differences and preferences, reviewed all options to re-bundle three new offers that made the win-win negotiation possible. Finally, Angela opted the plan (a) that keep her salary increment in annual normal rate, but take the payment method of gratuity instead of salary increment and she is invited to become one of the key members of the global expansion project.As Angela accepted to join this project and 3-year structured and rotational plan is offered. She will station in 10 oversea branches to handle different tasks. After completing the plan, she will be paid a lump-sum gratuity with amount HK$180,000 (HK$5,000 x 36 months) and assigned as a Chief Manager to oversee the worldwide operations if her performance is outstanding. In Hong Kong, this position level is same as unit head, but higher than the managers in worldwide offices.
From the Angela’s perspective, this plan provides not only a great amount of gratuity, but also worldwide exposure and opportunity of high level management for her career development. Her career path will become much more smooth after the plan.
On the other hand, I can retain the talent staff for company global expansion and no need to recruit the other person to handle this new project. Also, there is no big jump of her salary to avoid disturbing the existing remuneration packages for the HK staff in the same position given their experience and age.
This is a win-win outcome to match with our differences and filful our needs.
This is a win-win outcome to match with our differences and filful our needs.
IV. Conclusion
Negotiation is an interactive communication and bargaining process. A lot of skills and tactics must be used to facilitate arriving at a common goal. Win win outcome can be achieved even both parties have different or opposite desires and points of view. Therefore, Angel and Devil are able to find the way to achieve heavenly outcome if they find the right path just like Angela and I did.
References
Malhotra, D. & Bazerman, M. H. 2007. Investigative Negotiation. Harvard Business Review, September 2007
SEBENIUS, J. 2002. The Hidden Challenge of Cross-Border Negotiations. Harvard Business Review, March 2002
Thompson, L. (2009). Win-Win Negotiation: Expanding the Pie. The Mind and Heart of the Negotiator, Pearson Prentice Hall.
Thompson, L. (2009). Establishing Trust and Building a Relationship. The Mind and Heart of the Negotiator, Pearson Prentice Hall.
Wertheim, E. (2007). Negotiations: An Overview (pp. 33). Ft. Leavenworth, KS: The US Amy Command and General Staff College.
Picture sources
2. Vincci’s friend
Really good idea to analaze the differences between both parties. It is important to know much about both parties' situations, requirements, advantages and disadvantages, risks and bottom line for the negotiation. Just like Sunzi, who was famous Chinese ancient strategist said, knowing the enemy and yourself
ReplyDeleteyou can fight a hundred battles and win them all. The negotiation should be under the situation that trying to find a reciprocal situation to fit in both parties' benefits and keep avoiding to over anybody's bottom line.
I like your analysis of differences identification in 5 areas perspective. I totally agree that if understanding the differences in both parties is more easy to figure out the Win Win situtation. Also, your suggestion that using tangible (e.g money) and intangible (career path) items (a package) to the win win solution is benefit to both parties. Also, it provides a short (company no need to hire and train new employee) and long (help company grow) term benefits to both parites.
ReplyDeleteFor example of tangible item, money, Empolyee may feel that Employer has sincerity for negotiation even the amount is less than employee request. For intangibile item, 3 year career plan, Employee may think that Employer believe and trust his/her ability. If not, Employeer will not spend time to help he/she to develop a career plan in company. In Empolyer point of view, they believe the employee can help company to get more revenue than company paid for. Also, it increases company's reputation that employee may believe they will have similar result if they have outstanding performance. So, it will increase company's productivity as well.
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ReplyDeleteI agreed your analysis on how to get a win-win outcome and I believed that your human resource proposal would be accepted by Angela.
ReplyDeleteYour analysis gave me an insight that CULTURAL DIFFERENCE of the employees may be required to take into consideration.
For example, in your case, Angela is an American. She left her own country and worked in HK. Her academic background seems strong, with a MBA in-hand. Your proposal on increasing her salary in normal rate first, gave her an opportunity to work in a spot-lighted corporate project and a 16.7% gratuity after 3-year performance; had totally met Angela’s background and her expectation; I believe. That’s why your negotiation works perfect.
But, let say, if the employee is a Hong Kong resident, young, approaching 30, also with a MBA in-hand. He/she might have different expectations on job, paid and career growth. Taking consideration of these, may be i) a better title; or ii) more fringe benefits can help to win the negotiation. And I do believe he/she did not want to change his/her permanent contract into renewable 3-year contract.
Thus what you said about the useful tactics would be crucial in your other negotiation opportunities.
According to the parts of differences in risk attitudes and expectations, Angela’s position is replaceable and the company’s expectation is to control the labor cost effectively especially at the bad economic environment. I agree that no big jump should be applied when negotiation.
ReplyDeleteRegarding 2.3 inquiry about others’ interests and priorities, it is suggested to get sufficient information before negotiation. To determine what is really most important to the other side, look at the following signs:
1. Which issue does the other party want to return to constantly?
2. Which issue makes him or her the most emotional, tense, or stressed?
3. Which issues are most likely to lead your counterpart to try to control the conversation, rather than listen?
4. What is the other side most obstinate about when you ask for a concession or compromise?
After then, we can start to negotiate multiple issues simultaneously. That is, identify all the issues up front and put everything on the table at the same time. Then, go back and forth between the issues as you make offers and counteroffers.
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ReplyDeleteI agree with Wennie that about the negotiation skills and I like the way that Honey Bee used to unbundle the issue from the expectations of both side and rebundle the package using the extracts. It would increase the efficiency of the negotiation and highly enhance the final package's quality.
ReplyDeleteHere I would like to share my experience that I have establish a friendly relationship with my boss. Apart from getting the work done on time, I discuss with my boss on many different issues like buying cell phones, housing, investment, travel and etc.. The relationship established created a climate of trust that fosters information sharing and hence creates more moving parts. Thus, I believe trust building is also important in an negotiation.
Besides, I would like to comment on the final package offered in the example. If I were Angela I would also choose the offer to work on a oversea project with an attractive bonus gratuity. However, I think it is difficult to measure Angela's performance during her station. From the viewpoint of management, it is not worth to pay a bonus without any KPI. Besides, Angela's current's position is just a unit head, she may not be experienced enough to handle the global operation. It could be a high risk investment for Honey Bee Company. Thus, it is important to figure out how to measure Angela's performance during her station before we consider to offer a bonus and promotion.
Very interesting analogy using the angel and the devil!
ReplyDeleteFrom the employer’s point of view, taking employee’s perspectives, understanding her needs and priorities are essential. However, the inability to influence your employee to understand your perception could become employers’ inhibitor. Since Negotiation is a joint problem solving process, having a strong influential power is important to lead your employee into learning that the final package deal is of the best interest to both sides. This case also illustrates the importance of trusting employees from employer’s view. Aside from the needed tactics, trusting employee make communication believable and allowing employee (Angela) to open up, cooperate, and share information, hence having effective collaborative decision making.
Furthermore I agree with Bernie’s comment on cultural influences in affecting negotiation outcomes. In addition to the employee’s American identity, I believe that employer’s cultural background also play a role. If the boss comes from a collectivist culture (as in HK), where group interests are put in front of individual interests, he may be less concern about employee’s (Angela’s) individual interests and goals. Despite this, as today’s work place is getting increasingly cultural diversified, I suggested that all negotiations should be treated as a cross-cultural case, which is to consider individual differences but focus on the common grounds as each of us (even if we are from the same country) has our own unique background and experiences.
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ReplyDeleteNegotiation between employer and employee is one of the common negotiations in daily practice. It would be more effective if we can apply those tactics successfully used in the extreme stressful negotiations into our daily practice. Let’s say, negotiation between negotiator and hostage taker.
ReplyDeleteIt is believed that negotiation in hostage taking is extremely stressful. Crisis in hostage taking is highly emotional and low in rationality [Vecchi, 2005]. Successful negotiation in hostage taking requires establishment in good communication and rapport, defusing intense emotions and gathering intelligence (Time is important in negotiation in hostage taking but relatively less important in negotiation between employer and employee) [Vecchi, 2005]. These are important strategies that we should and we can use. The success in negotiation can be staged in 5 phases, i.e. Active listening, Empathy, Rapport, Influence and Behavior change [Vecchi, 2005]. By going through these 5 phases, the negotiation should end in desirable outcome.
Furthermore, is there any role of taking “hostage” in negotiation between employer and employee? Hostage is a tangible resource for hostage taker in negotiation [Vecchi, 2005]. We should seek tangible / intangible resources to facilitate negotiation, both in employer and employee perspectives. For example, it is great if you can find colleagues with similar views or opinions on your side (either employer’s facilitator or employee’s facilitator) during negotiation. It should potentiate your bargaining power. It would be excellent if you can develop Stockholm Syndrome with the hostage!
Vecchi G. M., Van Hasselt V.B., Romano S.J. (2005) Crisis (hostage) negotiation: current strategies and issues in high-risk conflict resolution. Aggression and Violent Behavior. 10(5), pp533-551.
It is important to understand the interests and needs of the employee, since it can influence his/her motivation. Motivation based on innate drives, and researchers use the four-drive theory to explain human motivation (McShane & Travaglione, 2007). Four-drive theory is divided into (1) drive to acquire, (2) drive to bond, (3) drive to learn, and (4) drive to defend. Drive to acquire incorporates the need to power, qualified position and acknowledgment in society, which Honey Bee offered Angela as Chief Manager in the negotiation after the completion of a 3-year program. Drive to bond is about forming social relationship with others and build up shared commitments. Rotation plan, which requires Angela to station in 10 branches can help and enable her to develop social relationship with varies personnel in the company. Drive to learn includes “satisfy our curiosity, to know and understand ourselves and the environment around us” (McShane & Travaglione, 2007, p.142). I assumed that the experience of Angela stationing in “10 oversea branches to handle different tasks” will allow her to extend beyond her current knowledge. However, the above paragraphs did not go into details of the task that Angela will face. Honey Bee did not mention if top executives will be mentoring her. Without guidance and feedback from the senior management, it is hard to achieve the drive to learn. Feedback can maximize effort and performance, therefore, it is very important in achieving goals. It also converses appropriate behaviors, raises awareness of performance errors, and motivates employees. Lastly, drive to defend is to protect ourselves physically and socially, which take account of defending affiliation and trust. Given that drive to defend is activated by threat, it might not apply to this case, unless Angela encounters personal danger while she is overseas, or the company breaks the trust by not promoting her after completion of the 3-year program.
ReplyDeleteEmployee share ownership plans (ESOPs) is one of organizational-level rewards to motivate employees. It consists of encouraging employees to buy shares in the company at a discount, which workers can be rewarded through dividends. I do not think Honey Bee included in the negotiation, however, they should consider.
McShane, S. & Travaglione T. (2007). Organizational Behavior on the Pacific Rim (2nd ed.). McGraw-Hill.
I believe that Angela will definitately accept the final offer cause it sounds so attractive and I do appreciate your 3 year program made for Angela in this case.
ReplyDeleteFor a young unit head, a 3-year overseas working experience will be quite beneficial. Angela will have a chance to challenge herself in different situations and find out how a company operates in different countries. What else, she can build a strong relationship network globally and get to know people with multinational background. What be mentioned above will become a shinning point in Angela’s resume and also life. After 3 years, she will have a promotion and a lump-sum gratuity with amount HK$180,000. And by this time, she can have much more bargaining power to negotiate for a big jump of her salary because she has already had 6 years of working experience as a unit head with global working experience and the company won’t let the training input be wasted if Angela threats to leave. It sounds like quite a good deal for Angela.
But what if Angela doesn’t want to leave HK to work globally? It depends on how Angela valuate her job and her private life. If Angela values her private life in HK quite much, she may not be willing to accept the global expansion project. For example, she has a boyfriend deeply beloved and doesn’t want to give up this relationship or make it a long-distance love. What else, her friends or her family ( if she’s married in HK) can also hinder her from working out of HK.
In conclusion, it’s a good win-win outcome but it may not work in some situations.
I really enjoy reading this blog since the blog is very clear and stright forward. In general, I think your group did a good job on analysis the problems of inhibitors and the methods to use during negotiation process. However, I have discover your group use a term "trade-off" Indeed, In terms of negotiation, I believe the approach should be maximize your interest through the negotiation skills, and I think trade-off is more like a decision making process if you have to make choice out of several options you have. As an excellent negotiator, it is better to make offer to maximize your interest instead of taking offer or negotiation and make adjustment through the offers that the opposit side has offered to you as an option.
ReplyDeleteAlso, in the The illusion of transparency in negotiation, I am not sure if I get the meaning right, but it seems your group define the term as hiding the information from another. In my understanding, The illusion of transparency in negotiation is a belief that you believe your own thoughts, feelings, and beliefs are more apparent to others. Which mean you believe your ideas, thoughts or interest are reveal to your opposit side but actually not.
First of all, I like the way you have presented the story from both the Employer and the Employees perspective, even though most of the story is seen through the eyes of the Employer.
ReplyDeleteSecond, I do not understand your argumentation for the Illusion of Transparency. In my opinion the Illusion of Transparency occurs when the one of the parties has more information about a current subject, the party assumes that the information is common knowledge, but the other party is not aware of this information. The illusion of transparency occurs when negotiators believe they are revealing more than they actually are (Thompson, 2009). In this case, you argue that the Employer would assume that Angela knows about the company’s wage structure. And the Employer is correct in assuming that, because Angela knows what her colleagues earn. That is why I would not characterize it as such. But in your own view, if she does not have information about other colleague’s wages, then there is an illusion of transparency if the Employer assumes Angela has that knowledge.
Third, I was playing with the thought that after Angela received her gratuity bonus of 180.000 HKD, she would still not be in the same wage league as her colleagues, but she would be promoted to a different title. Yes, the company will have a talented employee that can help in different departments, but they still have to pay Angela 5.000 HKD each month, but just as a lump sum instead. This of course offers a small discount for the company because of the inflation rate, but still is a huge expense for the company. My concern is thus that after receiving her lump sum and a fancy title to go with that, she would try and find a different company that can satisfy her wage needs better than this company would. In my opinion this situation is a Win-Win outcome, but on a short-term base, and with Angela coming out the strongest in this case.
Bibliography
Thompson, L. L. (2009). Win-Win Negotiation: Expanding the Pie. In L. L. Thompson, The Mind and Heart of the Negotiator.
Thanks for Honey Bee's good strucuture of the Blog. They have built a strong evidence to support their point of view. But it seems like most of the people only focus on the negotiation process. I agree that this is the topice we need to discuss. I really think the reality would go further for just the negotiation process. Let's illustate deeper with other management theory. They are all known, but seems to be ignored.
ReplyDelete1) Organiational Culture. I think everyone understand the term. But I don't think people go deeper to illustrate the negotiation with organisational culture. For example, there are some organisations have a great power of distance, the more senior that you are in the company, the more power that you have. If there is an organisation that has a great power of distance, I really think it is reasonable for Angela with less salary. Even now, many companies have this seniority issue. If Angela works in this kind of company, actually this is the norm.
Secondly, some company has less vertical communication, there is only one way command from the top to the bottom. So, if Angela tries to negotiate with her boss, it may not be proper.
2) The performance evaluation method also influence the negotiation result. Some of the companies have performance evalutation since the start working day of the employee. So, the more senior people, would have more track record of performance, that's why they can be paid more. If Angela works in this company, it is better for her to ask for different evalutation method. May be yearly. I think it is fair for her and also fair for the company as she just comes up without performance, it is hard to the management helping her to bargin for more salary.
Bernie and Melanie raised an excellent point - cultural differences do play important role in negotiations. I would like to look at this issue from a slightly different angle - in addition to influencing our values and believes, cultural differences may interfere with the actual communication process between the two parties. Chinese negotiators are likely to be frugal with words, which can be misinterpreted by a Western negotiating opponent (or partner, as we like to say in our course) as a bad sign pointing to lack of interest and attention in the discussion. If a Chinese is negotiating with a Russian, the former should be prepared to put aside the proverbial expectation of a smile ('A man without a smiling face must not open a shop') for a Russian will start to smile in a negotiation process only when both parties lose count of emptied bottles of vodka. Some other cultural differences:
ReplyDeletehttp://curiousjames.wordpress.com/2007/10/15/east-west/
http://www.youtube.com/watch?v=JM3JRYxqtDU
Humor aside, these examples point out to the importance of being able to 'read' the other party correctly.
I would also suggest that the national differences will have an impact on the willingness of the parties to take a collaborative rather than competitive approach to negotiation. I find it difficult to predict whether a Chinese manager will be leaning - on the one hand we have the traditions holistic Taoism paired with Confucian patience suggesting expanding the pie will be preferred. (J.K. Sebenius, C. Qiann, 'Cultural Notes on Chinese Negotiating Behavior', 2008, Harvard Business School Working paper) On the other hand, notion of 'saving face' together with the survival instincts expressed in the military stratagems (eg Sun Tzu, 'Art of War') are likely to act as inhibitors of the collaborative approach. Whatever the conclusion is, this example points to the complexities behind trying to explain and predict cultural differences. There are many factors that shape our personalities, therefore we should be careful when making culture-based judgements in the negotiation precess.
To do the presentation and discussion on how to achieve win-win negotiation outcome by using the Angel & Devil concept and character, it is very nice and easy to let me understand your group discussion and analysis, because actually everyone has angel and devil inside of themselves.
ReplyDeleteSometimes, we will think at angel side and sometimes at a devil side. The rational and emotional thinking also affect our decision and affect the outcome of negotiation. As it is relatively easier to understand what kind and how of rational thinking/factor will affect the outcome of negotiation, so it is easier to “control” and reduce the conflict on rational thinking/factor. But it is very difficult to understand the emotional thinking, the psychological part, on ourselves and also our opponents. Since no matter you are “angel” or “devil”, you also has emotional, that’s why it make everyone being unique, so if emotional and psychological part is that difficult to understand and “control”, I think the best way to reduce the conflict on emotional & psychological part/factor is to think at your opponents side, try to think what he/she want and also what you accept to take if you were he/she. I believe that will become easier to achieve a win-win situation, both parties feel comfortable of the decision.
Regarding to your team to identify the differences of preferences on Angela and the company is a good way to understand what Angela thinking will be and what she most concern about, on the other sides, also understand what is situation of the company. Well understand and identify the differences can help to make a decision/agreement that both parties feel good and accept it.
The final agreement is mainly used the differences in time preferences to trade off the efforts of the employee for the gratuity given by the employer. It depends heavily on the employee‘s vision on the company and expectation of the job future. In many realistic circumstances, the assumption may not be hold. In that case, the employee may perceive the agreement as a punishment that she needs to do even more extra tasks from now on for the unforeseeable long-term benefit, while the employee needs to give a quite large lump-sum gratuity in 3 years later. The issues have just postponed and both parties finally pay without (recognizing) better off. Even worse, the employee may quit due to frustration and the outcome goes to lose-lose.
ReplyDeleteTo solve this, the negotiation process should prone to make package deals in wide range of perspectives, instead of just focusing on the monetary terms such as raise salary and giving the direct money. Otherwise, it easily falls into the trap of fixed-pie perception that both parties have to split the pie by getting more money from the other side. Although the time preference is considered in the case, the intangible benefit is not explicitly expressed by either party. Proved by a research (Mittal, Ross, & Baldasare, 1998), the bad things easily outweigh the good things unconsciously. With the anchor of raise in salary (i.e. money) from the start of negotiation, the employer will easily focus on the frame of how much it paid or will pay without recognizing to enable to generate the benefit from the other views.
Moreover, although perspective-taking is a good objective for both parties to reach win-win outcome, it easily causes to the illusion of transparency. Therefore, both parties should try to inquiry and induce the interests and preferences from the other party and use them as the directions of establish the multiple offers. And the most important spirit of perspective-taking is to fight the issues together, simply said, not bargain over positions but interest. For example, the frame of “we had to re-bundle those options into several equal value packages and each package should have different value to Angela.” is easily made the trends of the negotiation toward “fighting” each other. Rather, it should think with the frame of “we had to re-bundle those options and discuss them in the same time with flexibility to find solutions that are good at both, while not hurting other’s benefits.”
To conclude, frames can direct the negotiation, while how truly understanding other’s interests and the flexibility of solving the problem decides the outcome of negotiations.
Bibliography
Mittal, V., Ross, W. T., & Baldasare, P. M. (1998, January). The Asymmetric Impact of Negative and Positive Attribute-Level Performance on Overall Satisfaction and Repurchase Intentions. Journal of Marketing, 62(1), 33-47. Retrieved from http://www.jstor.org/stable/1251801
I like the whole approach of the employers’ inhibition tactics and method presented. The final win-win outcome with gratuity and providing future development are the win-win negotiation that can comfort the employee and also benefit the company. I also agree with the differences identification for analyzing the 5 difference aspect of preferences to capitalize for Angela.
ReplyDeleteIf I were Angela, I will agree with the final option that for the compensation of salary and also the career path development. It is not only focused on the short-term way like money but the long term development for Angela.
Most of the time, a well understanding prospect of company will help the employee find out the best solution for negotiation. As my past experience, my company offers every employee a career path and money improvement once he or she met the target. However, the details are too unachievable and the time preference are too long for the one who are look for the money. Finally, most of the employee chose to resign the job and find another one. That’s why we have to look into the fact and also what the employee wants. The loner the employee keep can build up a better company loyalty from the employee and also the company culture can be developed.
I really appreciate your story telling. You have well focused on the preparation(research), the process on how to become the win-win situation, and the outcome.
ReplyDeleteAs your tactics, refer to 1.4., I do think delay can be the useful tactics to achieve the win-win outcome also. Some of the employee may not be positive and cooperative and prefers confrontation during the negotiation
Delay the Discussion is a useful tactics. This will calm you down and focus your mind on what it truly means by stepping further.
Think of the timing and importance of the things you want to negotiate, and acknowledge that some things are not negotiable. Pushing in the wrong direction will only cause friction, and may distract you from pursuing a more productive avenue.
If I were the employee, timing also very important for me to negotiate with boss. Before the negotiation, I will think:
How's the market?
What is average salary right now?
How's the economics?
The bottom line before the negotiation?
I believed that different timing may caused different result.
Before conducting a negotiation, I also prefer to have a comfortable environment to let all negotiators feel relax and release their pressure, making a soft atmosphere to foster communication. Also, I appreciated that employer had done a research and prepared document to share with Angela to explain the existing situation. It is more objective and persuasive than only talk about what in his mind.
ReplyDeleteRegarding to the package accepted by Angela, I support with below reasons:
From employer point of view, it can easily to retain a valuable employee for a specific period of time, which especially planed for a project launch. With a stable personnel/ leader is important for managing a project.
After accepting this package, employee/r relationship can be sustained, at least last for 3 years. It is because they won’t be due to remuneration to make several negotiations or go worse in arguments.
In addition, this package is also benefit to Angela, as the gratuity is equal to her wanted salary($5,000/mth), even she will only entitle to pay after 3 years, but it still seen as an appreciation and recognition towards her performance.
Besides, after completion of this project, actually she should gain enormous experience and will entitle to assign as Chief Manager to oversee the worldwide operations. It is very attractive for an inexperience manger to climb up to senior management.
To sum up, the package may be more or less seen as a win-lose outcome toward employer, because it involved $5,000/mth increment. However if company is seen the 3-years project is very essential to the company, it is better to retain an experience staff for management of such project.
Congrats Honey Bee on the win-win outcome of the negotiation which are able to address both the “motivator” factors - aspects of the work environment that provide employees with job satisfaction and “hygiene” factors - things that can upset employees in the workplace, in Herzberg’s two factor theory on motivation. (1)
ReplyDeleteI am very much impressed by the preparation of both parties before the negotiation and the trust strengthening throughout the negotiation.
It reminds me of the importance of a manager’s capability in building trust with his/her subordinates in today’s workplace, as echoed by the book First, Break All The Rules by Marcus Buckingham & Curt Coffman. After interviewing 1 million employees, the authors concluded that "People leave managers not companies...in the end, turnover is mostly a manager issue”. (2)
This book also provides a lot of groundbreaking principles on employee motivation and engagement and what great managers do differently.
(1) Read more: http://businesscasestudies.co.uk/siemens/motivation-within-a-creative-environment/satisfiers-and-dissatisfiers.html#ixzz1nfDH2vGW
(2) http://globalhub.org/resources/672/download/First_break_all_the_rules.pdf
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ReplyDeleteLooking at this process negotiation I focus my attention on the Useful tactics used by the boss in order to achive a win win situation.
In particular the perspective-taking approach can gives the possibility to understand employee's needs.
"Perspective-taking, according to the study published in the April 2008 issue of Phsycological Science, involves understanding and anticipating an opponent's interests, thoughts, and likely behaviors,whereas empathy focuses mostly on sympathy and compassion for another" (Hareyan, 2008).
With this kind of approach, the boss understood that the priority of Angela is not only raises her salary and increase her financial position but first she pretend an award for her hard work during this three years and an equal treatment as the other managers.
"Wearing other party's shoes" can help the employer to find a different solution outside of purely monetary exchanges and can identify potential non-monetary solutions, having the possibility to "expand the pie". Here it's evident as the money need represents another human need, as the need of increasing her position and some award that can give her the possibility to increase her knowledge, skills and, consequently her productivity( Cronin-Harris,2009).
That's why, the possibility to join the project and the 3-year structured and rotational plan and also the possibility to be assigned as a Chief Manager based on her performances, can motivate Angela to increase her productivity and loyal with company. According with Vroom’s theory, the employee can be motivated if there is a positive correlation between effort performance and rewards and “the more positive the reward the more likely the employee will be highly motivated. Conversely, the more negative the reward the less likely the employee will be motivated” (Lindner,1998).
James R. Lindner, Understanding Employee Motivation Cathy Cronin-Harris, Negotiation Strategy: Planning Is Critical; CPA journal online (2009) Armen Hareyan, Perspective-Taking Makes Successful Negotiation, Empathy Limits (2008)