For the purpose of this activity, we will follow the negotiations taking place at a fictional company called Simpson, Goodman and Associates. Markus, a top executive who has been with this company for five years, believes he is underpaid. He also thinks he deserves more seniority over his crew members. Markus’s manager, Louis is also the owner of the enterprise. Though Louis values Markus more than any of his other employees, he isn’t sure that he can afford to pay him more, especially at this time of year when work is unsteady.
Read through the lesson and find out how Markus prepares his case and presents it to management, and how the two parties negotiate and achieve their goals.
Markus Prepares to Negotiate with Louis
Markus approaches Louis after his shift on Friday afternoon and asks if he can arrange a meeting to discuss a potential promotion. Louis sighs and reminds Markus that they already had this discussion last year. Markus agrees, but reminds Louis of his loyalty to the company and insists that they speak again on the subject next week. Eventually Louis, who is afraid that Markus might quit on the spot, agrees to meet on Monday during the crew’s lunch hour.
Over the weekend, Markus thinks about Monday’s meeting. Last year, he was unprepared to negotiate and ended up only getting a 10% pay raise. This did not satisfy him, and he has continued to feel undervalued ever since. Many times, after a hard day at work, Markus has considered quitting. However, it is difficult to find work in the middle of winter. Markus has a family to support and he can’t afford to lose his job.
Markus decides to do some research on negotiating. He learns the principles behind collaborative negotiating, and decides that this is the approach he will take this time. After he has understood the concept he can ask himself the preparatory questions above. Finally, he can apply the rules of collaborative negotiating to his own case. |
Here are some preparatory questions to ask yourself before beginning talks with the other party:
- What is my main objective?
- What are all of the alternatives I can think of?
- Why do I deserve to have my goals met?
- What will my opponent’s counter proposal likely consist of?
- How can I respond to this counter proposal?
- When would I like to have this issue resolved?
- What is my bottom-line?
- What market research/homework do I need to do to back up my cause?
- What is my bargaining power compared to my opponent’s?
- What do I know about the principles of negotiating?
Markus Answers the Preparatory Questions
- My main objective is to be named crew foreman and to earn a salary that is competitive with other foremen in the area.
- Alternatives include looking for work elsewhere, asking for a dollar more an hour, suggesting that Louis hire someone else to take on extra duties.
- I deserve this promotion because I have worked with Simpson, Goodman and Associates for five consecutive years, and have received many compliments from satisfied clients. I am the team member who reports early every morning and leaves last. If we are under a deadline, I work through my lunchhour. All of the other team members come to me with their questions.
- Louis will likely say that he can’t afford to pay me more because business is slow in the winter. He will say that there are plenty of qualified emplyees who will do the work for less money.
- Both of these arguments are probably true. Simpson, Goodman and Associates lost a lot of money last year due to poor weather. There were a few weeks that we couldn’t work, but Louis had to pay us anyway because of our contracts. And, unemployment is at an all time high in our region. However, Louis just signed a contract with a new company that will mean regular work for at least the next two years. Also, the other team members rely on me, and none of them have the experience to take over my position if I quit. It will cost Louis a lot of money to train a new executive to do everything that I do.
- I understand that winter is tough on this business, so I would like to have this issue resolved by spring.
- I will look into three other local enterprises and inquire about the salary and benefits of its employees. I will also review the classified ads to see if any other companies are hiring or looking for an executive.
- My bottom-line is to receive a 50% pay raise and to be named team manager.
- I think Louis and I have equal bargaining power right now. None of the other current members of our team are as committed to the job as I am. However, unemployment is high and there are other people he could hire.
I have never been a strong negotiator. I need to learn more about negotiationg strategies and tactics. Markus Applies the Principles for Collaborative Negotiating
- I will not discuss the fact that I was only offered a 10% pay raise last year. It was my fault for not being prepared to negotiate.
- Even though I think Louis is lazy, and takes too many days off when we are busy, I will not point out his shortcomings. This is about my promotion, not his work ethic.
- I will first thank Louis for employing me for five consecutive years. I will tell him that the stable work has meant a lot to me and my family, and I appreciate the security, especially with so many people out of work.
- I will tell Louis that I think his company is one of the most respected companies in the region, and ensure him that my goal is to have a lifelong career at Simpson,Goodman and Associates.I will say that I hope I will never have to work for a company that does a poor job.
Preparing to Negotiate a Job Offer
Negotiating a job offer should mean more than just saying, yes. Though being offered a job is an exciting time, it is also an important time to use your negotiating skills. Here are some issues you may want to raise before you accept:
- Salary
- Promotion Opportunies
- Insurance (medical, dental, accident, life)
- Holidays
- Vacation time
- Retirement/pension plans
- Stock options
- Overtime
- Expenses
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