Group Experiential Exercise 2: Arriving at a Win-Win Negotiation Outcome

Part One – The Story

How My Right Turn Turns to Be Right

n       a successful win-win negotiation story on my position and remuneration package

n       a process approach for solving problems

Hi, I am Mr Amenie Jr.

Look at me, I am now the Director of Sales and Marketing of Modern Tool Manufacturer.

This is my superior, Ms Yip Lau, she is now the Vice President of Modern Tool Holdings Limited.

I am going to uncover the story behind my successful negotiation leading to my current position and remuneration package.

It all happened 18 months ago, when at that time, I was the Marketing Manager heading the Marketing Division, and my superior was the Assistant General Manager of the company...

Scene 1

I jumped abruptly from my seat and moved hurriedly to the office of my superior, Ms Yip Lau.

I determined I had to fight back my “big money” and stopped to be a fool anymore.

I was furious at being kept in the dark.

The immediate issue was that I was not distributed the bonus.

The issue triggered negative emotions inside me: I was irritated, overwhelmed by a feeling of being mistreated and a sense of management injustice and inequity.

Being left out of the loop for management information, I felt indignant and violated.

But just several steps my hand would reach the lock, I stopped there.

My mind drifted back to a scene three years ago, when I asked for a big jump associated with my promotion.  The attempt failed.

Scenes of my succeeding trials to raise salary continued to emerge, they were all same but unsuccessful.

It emphasized and reminded me once again how sophisticated my superior was.  She was such a skilled negotiator that every time she was able to maneuver conversations around and put my requests futile.

I was lucky to make my move on hold.

I turned right and returned back to my seat.

I decided this time I have to extra well prepared for my negotiation.

Scene 2

This was a typical scene in the past of how I jumped into the office of my superior asking for a raise in my salary…

Scene 3

I decided I have to extra well prepared for my new round of negotiation with my superior.  Thinking about the insufficiencies of my previous attempts, I decided to adopt a process approach to solve the problems.

Step 1: Define The Problem

I went through the following thinking before I fixed and defined my problem statement.

What was the problem?

The immediate issue was that I was not distributed the bonus.

That had opened the can of worms: 

n   My pay was already HKD5000 less than the rest of the unit heads;

n   I was promoted to this position without big jump on my salary, even though I “rescued” the unit at a time of company crisis;

n   I had tried several attempts to request for salary raise but the management never seriously looked into my case;

n   I being the unit head of the Marketing Division but I was always out of the loop for important information and decision makings;

n   I doubted if the management recognized and appreciated my capabilities and loyalty: I hold an MBA from a leading school of management and I devoted my profession in this company since my graduation;

n   What was more, I had been dedicating my extra working hours to building up effective networks in the industry and in fact I earned high reputation and representation…

Whose problem was it?

Of course the management owned the problem! My superior, the Administration…

But, should I own part of the problem?

(Yes, of course, and how to appreciate this point in the new round of negotiation?)

Where did it happen?

Physically at the office.

But again, it also happened in my mind (perception of the problems), and from my heart (feeling and emotion generated from the problems)?!

(Yes, I had to deal with my baggage!)

When did the problem occur?

On the day when the company distributed bonus to everyone on the payroll.

No, might be the problem was ingrained the first time when I failed to obtain a big jump on the salary associated with my promotion to Unit Head.

How serious was the problem?

The problem escalated to become a complex issue to me now.  It became mixed questions of my value to the company, my motivation to my profession and my loyalty to the company.  What was more, it challenged myself whether I would let go my baggage and negotiate to win this time; and whether I would consider necessary to repair broken trust with work associates, especially my superior.

So, here I fixed my problem statement:

“A recognition of my present and projection of my future value to the organization and industry.”

The problem statement would help to set the tone and boundary for the negotiation coming.

Step 2: Collect Data

Having fixed my problem statement, I started to collect relevant and supporting data:

n    Current operations of the Marketing Division;

•  Roles and responsibilities
•  Reporting line internally and externally
•  Performance support and review mechanism
•  Information supply

n    Accomplishments of the Marketing Division for the past three years;

n    Performance and training records of the team for the past three years;

n    A review on the current company practice on compensation and benefits;

n    A review on the current industry benchmarks on compensation and benefits, with regards to related industry and job functions;

n    A report on coming two-year economic and industry projections;

n    A proposed two-year development plan for the Marketing Division in relation to the organization.

Step 3: Analyze The Problem

Using the Rich Pictures as the tool, I further thought about the underlying issues of the problem.

 

Step 4: Generate Ideas

Borrowed the idea from Hale (2007) that there were 15 ‘families’ of interventions gathered in six different groups, I attempted to unbundle and re-bundle both parties’ (mine and my superier’s) issues and brainstormed ideas on multiples of them in preparing for the negotiation meetings.

Finally I came up with the following multiples of issue:-

(Measures to response to the unpaid bonus – a perceived breach of employment contract)

n          Immediate release of my bonus;

n          Compensated the unpaid amount as special allowance bundled to my salary;

(Measures to response to the HKD5000 salary gap against other Unit Heads – a perceived management inequity)

n       Immediate increase of my salary by 8.5% to reduce half of the gap to HKD2500.

n       Connected other benefits to my salary of equal gap value: additional paid holidays, travel allowance per year, medical coverage to include dental services, free body check-up per year;

(Measures to response to my future development potentialities at the company)

n       Personal development plan: tailor-made development plan for career development purpose, full payment on selected learning and development activities, overseas plant attachments, study mission, internal and external trainer opportunities;

n       Reconfirmation on the loop of management for information and decision making purposes;

n       A proposed two-year development plan, focused on new business development, and perfection of organizational policy and practices.

n       To lead a task force for the above motive.

(Measures to response to my future development potentialities in the industry)

n       Supported the committee services of the external marketing association by giving a 2 days official leave per month.

n       Supported external training services rendered to the marketing association with trainer fee received at an amount not exceeding an agreeable level per month.

Step 5: Select Solutions

I decided to present all the above identified issue mix to the negotiation meetings.

Scene 4

I called the superior to address the issue and would like to arrange an appointment for the purpose. Several time slots were finally fixed.  Major meetings were arranged during the office hours at her office.  But I also arranged lunch appointments especially on Fridays or Saturdays.

Scene 5

I sent out relevant information by emails, hard copies in sealed file holders. They were further followed with phone calls to ensure proper receipts of them, and as repeated reminders on the subject issue.

Scene 6

This was one of the typical successful negotiation meetings with my superior.

 

The package deal on my negotiation subject finally fixed after the last round of negotiation meeting!  The whole process of this successful attempt lasted for 5 months!

Go to the reflection pages to know more about my preparation and tactics for this attempt!

Step 6: Implement Solutions

With the successful negotiation, agreed measures were announced and acted upon accordingly.

Step 7: Evaluate Effectiveness

The effectiveness of the win-win negotiation was based on the amount of raise and other terms and conditions agreed upon between me and the superior.

Needless to elaborate further, our new titles already explained everything.

Part Two – The Reflections

Reflection 1 – Why Those Attempts in The Past Always Failed?

The past attempts to raise salary were always unsuccessful because:

Emotional instead of rational responses

I dropped into my superior’s office usually at impulse and with emotion.  Almost all of the drop-ins were triggered by the salary increment announcements that often were of nominal.  I focused on the monetary bargaining.  I distrusted my superior.

Lack of preparation

Due to my impulsive moves, I was usually empty-head and empty-hand to the meetings. I did not figure out a plan (like a BANTA) nor consider any applicable tactics to wrestle with my superior.  The meetings were paralyzed when I failed to provide concrete and convincing data as the ground for discussions.  The illusion of transparency occurred when I thought that I was revealing more than necessary information but actually my superior had limited information about me.  And often, my superior could not give me full attention at the meetings.

Tactics mistakes

I was lately to appreciate that win-win was not compromise, nor even split, satisfactions or building relationship. Hence I made the following mental and tactics mistakes.

n       I believed that my interests like the chances for personal development were incompatible with the company, when in fact, they could be compatible. (False Conflict)

n       I surrendered and agreed too early with the ‘nominal nature’ of salary raise when there were actually chances that I could ask for more. (Premature Concessions)

n       I perceived that my superior’s interests were completely opposed to my own. She might be concerned with equality in sharing resources while I concerned more on equity. But actually there might be trade-off. (Fixed Pie Perception)

n       I made the mental mistake to avoid conflict with my superior and urged to compromise. But perhaps my superior already anticipated a second offer when she presented me the first one. (Compromise)

n       Instead of focusing on the right information (e.g. finding common interest), I focused on how to cooperate with my superior. I was too ‘cooperative’ to reveal my BATNA to my superior! (Adopting a cooperative orientation)

n       I assumed to focus on establishing a long –term relationship with my superior would ensure win-win outcome. (Focusing on a long term relationship)

n       I assumed if extended time was given on negotiation, all possible gains would be captured automatically. I did not pay attention to better negotiation strategies. (Delays/taking extra time to negotiate)

n       I focused on fairness and my needs, but was unawared of my value projection to the company. (Incorrect focus)

Overlook the social styles & relation

I was too focused on the subject and neglected the social styles of the two parties.  I did not work out a proper response when communicating with my superior who was typically an “eagle”: driving, strong-willed and determined, looking for efficiency and practicality.  That explained why she swayed almost every meeting.  Mindless to nurture effective relation before gave little or no lubrication to the meetings.

Reflection 2 – Why The Final Attempt Finally Worked?

Preparation!

I had devoted plenty of time to go through the problem solving exercise. I supported myself and provided my superior systematic and relevant information. I gave enough patience for the processing time. But most importantly, I did lots of research and mental preparation plus experiential exercises to wrestle on the workable tactics for the negotiation meetings. And I learnt and capitalized from previous mistakes.

Set the compass right

The problem statement set out the tone and boundary for what I was running for. It acted as my compass along the process.

“A recognition of my present and projection of my future value to the organization and industry.”

Right mindset

Now that I realized in order to run for win-win negotiation I had to capitalize on every resource and to leverage all creative opportunities. The outcomes would focus integrative instead of distributive.

To assess the potential of the negotiation situations, I further asked and confirmed myself the following questions:

n       The negotiation did contain more than one issue;

n       The negotiation could bring in other issues;

n       The negotiation could make side deals;

n       Parties did have different preferences across negotiation issues.

And that concluded me that I had to cultivate on the differences between two parties (me and the superior) in order to make trade-offs and joint gains possible.

Capitalize on the differences

Areas for possible trade-offs and joint gains from differences were exploited and evaluated.

n      Differences in valuation

Both parties stressed personal value to business development. I was more interested to demonstrate via marketing activities. My superior was more concerned to actualize via achievements on organizational goals and perfection on organizational resources. I then proposed an agreement to start up a development project to perfect the Marketing Division and at same time to enhance the business development capacities and capabilities of the organization.

n      Differences in expectation and risk attitudes

My superior (with a loss-frame) would consider the development plan uncertain and risky under the current economic condition. I (with a gain-frame) would expect the project be properly managed under my leadership, and that it was beneficial as it would pave way and secure solid ground for future business when the economic condition returned to robust. I then proposed the company only to maintain nominal budget to kick off the project; but when it turned out to be effective to bring into more revenue, more resources should be solicited and profit sharing should be guaranteed.

n      Differences in capabilities

I considered such differences in capabilities, endowments and skills between me and the superior and among colleagues would foster team collaboration to accomplish the development plan. I proposed to nominate members to project team. I further proposed my trainer role in order to develop myself and to exploit more talents in prepare for the coming organizational development.

Perspective taking

By taking the perspective of my superior, I attempted to see the problem through her eyes. This enhanced my problem solving abilities. I was moved to look at problems at organizational level. Even though a more balanced view on the position of the Marketing Division in relate to other income generating departments was reviewed, I realized I had more resources to claim. That came up my idea on the development project.

Unbundle the issues, make package deals, multiple offers

When my superior perceive herself as having more choices, she might be more likely to comply with my request. The idea of “overcome concession aversion” applied here when I thought of a few proposals and made package deals that might satisfy the differing interests of me and my superior.

So recapped what I had brainstormed during the problem solving process, I decided to present the package deals in the following manner:-

Package A: 1+3+5+6

Package B: 2+3+5+6+7

Package C: 3+5+6+7+8+9

Package D: 3+4+5+6+9+10

Actually I was using tactics to reduce the choices of my superior.
For Package A, she would reject most likely as the package only focused on my self benefits.
For Package D, it challenged the boundary of her and most likely again she would not bear the risk.
There remained the Package B and the Package C. The major difference between them was on the organizational development project. It would be my stake or gamble to be responsible for it because I proposed to lead the task force. My superior would obviously see the potential benefits of the project but definitely she would be reluctant to take the stake.
The packaged deals proposed served to emphasize my strong will to narrow the salary gap with other unit heads and be connected with the management loop. While my aspirations to develop myself in the organization and industry were the utmost valuable to me in the long term.

The successful deal: Package C!

It maximized the projected benefits and value of both parties in the long term.

Using psychology

The data collected and tabled at the meeting showcased my talents and values to the company. While I understood manager was fungible, I highlighted the potential hidden cost of losing a valuable staff or even future business loss.

“Negotiators are more likely to gain support for their proposals if they are stated in terms of what the other side stand to lose if the proposal is rejected than if they are stated in terms of what the other side stands to gain by accepting.”

I also emphasized my effective networks and reputation in the industry but that was for the business and image benefits of the company.

“Negotiators who are perceived to have many alternatives will be considered more attractive negotiation partners.”

Enhance participation

I sought out to engage more on the relation side this time. I appreciated the busy schedules of my superior. For the whole negotiation process, I fixed appointments with intervals between so that she had plenty of time to digest and response on my issues and offers. I even arranged lunch appointments or tea receptions so that discussions sometimes were more informal. Schmoozing and self-disclosure enhanced our understanding and made us feel more connected, and that paved way to rebuild my trust to her. I also asked questions on my superior’s interests and priorities, and at the same time I also revealed my career aspirations. The process was more of participative and constructive now.

Trust

Remembered that when I analyzed the problem, one of the aspect it challenged me was whether I would let go my baggage and negotiate to win this time; and whether I would consider necessary to repair broken trust with my superior.

In achieving this, I emphasized myself that successful negotiation was not just about money or value, other considerations such as trust, security, happiness and peace of mind were also crucial to me and that I cared about.

So first of all, I had to throw away the baggage.  Previous unsuccessful attempts to raise my salary breached the deterrence-based trust between me and my superior and that provoked my reverse psychology.  I perceived that my superior was controlling my behavior or intervening my rewards, and I was reducing my intrinsic motivation.

I repaired the broken trust by taking a new perspective to separate people from the problem; I learned, unlearned and relearned to build trust.

n       transformed potential personal conflict into task conflict;

n       explored creative integrative agreement and put thoughts on those ‘underpaid’ conditions;

n       used active listening and be assertive;

n       found a shared problem or shared a common vision;

n       respect personality and social styles, celebrate the differences;

n       afterall, have faith, have hope and have love!

Conclusion

The effectiveness of the win-win negotiation is based on the amount of raise and other terms and conditions agreed upon between me and the superior.

To me it would be to get as favorable a deal as possible; to my superior, it would be to provide a deal which does not disturb the existing remuneration packages for the staff in the same position given their experience and age.

However, when the problem shifted to “value” instead of “monetary”, or when it included bundles of “tangible” with “intangible”, or considerations on “long term” versus “short term”…the perspectives to think on and formulas to fix with the problem would be so different.

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References

Boss, R. (1977) Trust and managerial problem solving revisited. Group and organizational studies. Harvard Business Review, 3(3), 331-342.

Hopkins, B. (2009). Cultural differences and improving performance: How values and beliefs influence organizational performance. Gower Publishing Company.

Malhotra, D., & Bazerman, M. (2008). Psychological influence in negotiation: An introduction long overdue. Journal of Management, 34(3). doi:10.1177/0149206308316060

Northouse, N. (2010). Leadership: theory and practice. United States of America: SAGE Publications, Inc.

Thompson, L. (2009). Establishing trust and building a relationship. The mind and heart of the negotiator, Pearson Prentice Hall.

Thompson, L. (2009). Win-win negotiation: Expanding the pie. The mind and heart of the negotiator, Pearson Prentice Hall.

Wertheim, E. (2007). Negotiations and resolving conflicts: An overview (pp.33). Ft. Leavenworth, KS: The US Army Command and General Staff College.

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Extension

Responding to classmates’ comments on our Blog

52118626_dewong’s comment on Feb 23, 2012

52159589Feb 27, 2012 08:48 AM

52358806 Kenneth KwongFeb 26, 2012 10:36 AM

52280285 AU-YEUNG PhilipFeb 26, 2012 08:37 PM

50556599 Ho Chun Wai, Matthew @ BeehiveFeb 27, 2012 06:55 AM

52557414 (MAK SM)Feb 24, 2012 11:16 PM

Thank you for those feedbacks rendered to our blog exercises.

Some of the responses highlighted the importance of ‘Trust’ and that we also agreed with it. Trust is sometimes hardly to build but easily to break. It is not only meaningful but also necessary for employers and employees to make trust as an important element along the negotiation process: it indulges the emotional side of both parties and adds chances for mutual beneficial agreements.

Our story showcased some ways to build (or to re-build) trust:-

1.   Flattery – Genuine and sincere flatteries are sometimes powerful. Usual employers will like to receive appreciations and admirations from their employees.  Employees may consider their duties to show respect and gratitude to their superiors and to construct an environment for favorable negotiation process.

2.   More Exposure – Take care of the soft sides of human interactions before formal negotiations. Casual lunches, tea gatherings, phone conversations are little things but when you can capitalize, it will significantly lubricate any negotiation conversations.

3.   Cognitive Route – Be flexible to adjust and to prepare the right way to interact: you may take a cognitive route for task-oriented targets or an affective route for people-oriented targets.

Our story also showcased some strategies to negotiate for what are really demanded:-

4.   Illusions – some false intentions are there to eliminate the choices instead. Ideas that violate laws, rule and regulations, policies, procedures, practices etc. are more often discarded then fought for. Using this tactics, it will help to guide the negotiation to the real intended outcomes.

5.   Employers’ perspectives – win-win really matters, help your employers to help you. The abilities to deliver promises for future value projections usually give powerful base to negotiate. Previous tenacity during crisis further give powerful references to the employers.

6.   Problem solving approach – to collect sufficient information and to perform detailed analysis help to make win-win negotiation more approachable. This is especially helpful when negotiations are paralyzed with previous failures. Learning from failed negotiations help to pave way for successful negotiation and to rebuild one’s self-confidence. When the negotiators are willing to pursue positive approaches instead of digging in the fault finding processes, they may be more available to look into their genuine demands or purposes for the negotiations and that they are more willing or prepared to make trade-offs in order to obtain life happiness and social well-being.