Negotiation is simply a process of two negotiating parties coming to a consensus on an issue. The possible outcome of a negotiation could be any of these four:
- Win- Win
- Win- Lose
Effectiveness of any negotiation could be validated on these four outcomes. Patently, Win – Win outcome makes a negotiation highly effective. Employee Relations, Gennard & Judge (2010) presents us with 5 stages in the process of Negotiation . Now using a real life illustration which could even be haggling over the price of vegetables from a local vendor in the market , we could peruse these 5 stages.
For instance, while an employer has salary negotiation with a “going to be” employee in an organisation:
Stage 1: Preparation and Analysis
When two parties sit for negotiation, their attitude should not just be cantankerous and revolve around vague arguments because each want to win over the other. Data and facts are more important in the phase of preparation and analysis are extremely imperative .
- Inflation rates
- Company’s performance and affordability
- Competitor pay structures
- Current employee relations environment in the geography
- Pay award history of the company etc…
Stage 2: Presentation
Each of the parties need to present their proposals that are coherent and based on evidence for bringing in authenticity to the discussion. Negotiation is all about perspectives . In the previous stage we have seen perspective of the employer in negotiation . Now let us consider the “going to be” employee’s perspective of proposal to negotiate salary
- Percentage pay rise expected as per the market value
- Years of experience
- Position offered
- Competitors pay structure for the position and experience etc…
Presenting both their proposals provides an opportunity to clarify each of their questions.
Stage 3: Searching for and identifying common ground:
Two things could be considered here as vital:
- If, then – (Employer Perspective) If I offer “position X” what would your salary requirements be? If I offer 5% more salary for the same position as your pervious , would you accept the offer? (Employee perspective) What if my salary requirements are higher for their set compensation limits for the role? If I ask more then will competition affect this offer as there are many candidates with similar qualifications and experience?
- Link Issues – Tallying the above questions and seeing what is more important. Below mentioned are some more which could be used in other general negotiations
- Summarising : In order not to lose track , summarising at the end of each similar set of points would help the negotiation stay intact. This could also help the parties to add on to the points that they may have missed.
- Questioning : It is necessary to seek clarification through questions posed to each other during negotiation.
- Listening : This helps when there could be a misunderstanding. A negotiation is discussion not argument. One has to listen patiently with an open mind and talk without having the notions and assumptions about what the other party could say.
- Body Language: Ideally, this plays a major role when both parties negotiate with an intention to win-win. How people portray their body language shows how interested or uninterested they are in getting to a deal.
- Concluding the agreement : This is the essence of negotiation .At a point , each of the parties have to disclose their final offer for the settlement. Statements have to be made for closure agreements. Employer could put forth his final offer for the position and employee could sign a note of acceptance.
- Written Agreement: Key to the negotiation so as not to breach the terms agreed upon, is a written agreement which could be an offer letter stating the salary in the above instance.
Negotiation is not as easy as it is penned down. Not that the above steps make you best at it but certainly these act as guidelines in effective negotiation. I opine all the above points hold good even for a group discussions. These guidelines can be incorporated in any corporate negotiations( may not hold good for commercial negotiations) for better outcome. It all boils down to having a Win-Win at the end.