2013_6209_Up to We

Agree to disagree:

the art of win-win negotiation

In our life, we normally regard difference and divergence as not so good a thing，because mostly they will create contradiction and conflicts between the two sides or even among more people who are involved in related issues. However, the differences and divergence are the essential factors that make the world work, for without which, the acting way of communication will not create much value as it so does, because it eliminates the contradiction and creates value, and on that score, negotiation emerges as the times require to turn hostility into friendship, that is what we call the win-win situation when both parties get what they want.

Different situations needs different ways of negotiation to reach a win-win situation, like in bargaining price, we usually make a deal at a middle price, but how is it like when in a salary negotiation which is much more complicated and there’s a lot more need to be taken into consideration.

To

For we are mostly employees at work, therefore our team simulated a salary negotiation scenario and we analyzed the process of the negotiation and dig out what directions it went right or wrong that decides the success of a win-win situation, from the employees perspective.

After the process analysis, our team carried out the ideal win-win situation in our mind and come to a conclusion that where to go and what to do to reach a win-win situation.

Scenario Analysis

Background:

A MBA graduate worked in the manufacturing company for 5 years and got promoted once and the employee wants a big salary jump in order to be in the same financial bracket as the older staffs in line with the current unit head position. But the employer is a skilled negotiator who is good at beating around the bush and making the employee very thankful for any small raise. The employee can’t stand the current situation anymore and will be tough in the negotiation about the salary jump this time.

Negotiation Process:

Negative Tactics

In the first round negotiation, the situation seemed not that good, the negotiation not only didn’t reach any outcome, but also sparked the contradiction between the employee and employer, not even to mention a win-win situation. So, what went wrong?

First, sending unconscious messages.

As we know, whatever is in our head will come out across our face sooner or later. Research shows that people quickly read “micro-expressions” — involuntary facial expressions that flash as fast as 1/25th of a second, especially when you have something at stake. If using it correctly, there is no doubt that it is a good tactic that we can use to express our interests and expectation. However, in this salary negotiation, Q (Q was the employee, hereinafter) unfortunately expressed an unpleasant message through body languages, face expressions and eye contacts. Because of anger, anxiousness and inequity, Q felt about the low salary, so the its body unconsciously leaned forward to the boss and gesticulated wildly during negotiation. The bad behavior would make the boss feel annoyed and disgusted, which would worsen the situation and make the employee lose the position. In addition, Q was a little nervous when talking to the boss, the nervous feeling appeared on its face, and the boss would perceive it as a judgment that Q didn’t have the confidence and power to win this negotiation, which the boss could make use of.

Second, talking too much.

In order to explain the inequitable situation and emphasize the seriousness of this issue, Q always kept talking and repeating during negotiation. This immature behavior made the boss impatient and didn’t want to continue the negotiation. Talking too much, which intended to make things clearer contrarily made the situation a mess. Sometimes, learning to pause and wait, and being comfortable with a silence may give a hand to the negotiation. Just like an Chinese proverb says, ‘Nothing forcibly done is going to be agreeable’.

Third, fixed-pie perception, which is the belief that the other party’s interests are directly and completely opposed to one’s own interests(Thompson). Before Q went to see the boss to negotiate for the” big money”, there was a thought in Q’s mind that getting an increase of salary meant losing some profits of the boss, on the contrary, if the boss retained the profits, then Q would lose what I should have owned. This win-lose perception made Q less likely to support a deal that had significant supports of the boss. So it was not so easy to reach a win-win negotiation if this perception was still in Q’s mind. And even if Q’s side was set to benefit heaps, and the boss not, this might not be the best option, because the boss could exploit Q’s benefits by other subtle tricks. After all, boss was the boss. It’s like a zero-sum game-a situation in which a participant's gain (or loss) of utility is exactly balanced by the losses (or gains) of the utility of the other participant(s), if the total gains of the participants are added up, and the total losses are subtracted, they will sum to zero. (John von Neumann, 1944)

(What is a zero-sum game?)

Forth, focusing on single-issue.

During the negotiation, Q only bargained on its salary with the boss. Fixing the attention on this single issue would create imbalance in negotiation and make Q unrealized about other potential factors which could benefit both of the two parties.

Fifth, false conflict, which is known as illusory conflict, it occurs when people believe that their interests are incompatible with the other party’s interests, and in fact, they are not(Thompson). During this negotiation, I didn’t realize that Q could reach a mutual interest with the boss. What was always in Q’s mind was that it was an enduring conflict that stands. This perception made Q view this salary issue in a hostile perspective, which didn’t have any help to reach a win-win negotiation. In fact, giving Q a reasonable increase of salary didn’t mean that the boss lost this negotiation. To the contrary, Q would work harder and more conscientious after receiving this increasing salary as a promotion, which would result to the company’s improvement and profits. And the same to Q, a not so high increase in salary didn’t mean that Q must have something lost. A not fully satisfactory increase would give Q hope to work harder to reach a better promotion. If Q took this positive perspective to view this negotiation, it is not so hard to reach mutual benefit, rather than disagree to disagree.

Positive tactics

In the process of negotiation mentioned above, we concluded several strategies the employee used which didn’t work well in the negotiation. Then which is the right direction to a win-win situation. At first, we must know what the contentious issues in this negotiation are and what point the employee want to carry is. To get a win-win result in this case, the employee need to make efforts to enlarge the pie but not divide it.

In the second negotiation round, we changed the tactics which dramatically turn the direction of the negotiation and had a obvious positive effects. Now we would like to analyze the process and then give a statement about how Q’s actions facilitate to a win-win situation.

Actually the things Q did best can correspond a principal called CREEK(Barbara A. Budjac Corvette, 2009). We can analyze this one by one.

C (Common Interests)

If you want to accomplish your aim, to make other people listen to you, you must find the mutual benefit between you two. Now circumstance is Q want to get a rise of salary which the manager promised three years ago while the promise was very ambiguous. Hence the win-win result here is Q get a higher salary and the company can get more profits from Q. Q described how the promise puzzled him in last three years and even affected his work. Q mentioned that raising the salary is also a way to prove its capability and make him more engaged in job. In other words, the employee sent a message to the manager that the company can get an employee with higher engagement if the employee can get a higher salary. This message also helps Q potentially express his wish of staying this company in long term. Therefore, we can find the mutual benefit in this situation, which both the employee and the manager can get what they want to get. While all the things mentioned in this chapter will happen in a premise, the manager really need this employee and want him to stay for a long time. Thereby, there is something about the differences of risk attitude here, both the employee and the manager need to consider the contingency in the future.

R (Reinforcing)

The employee showed his points and expressed his views, but another question is what can support his points and views? We all know that emotional strength plays an important role in communications, but as what William Ewart Gladstone said, ‘People usually and improperly mistake emotional strength for the strength can be used in argument.’ Q stated his performance in last three years and reminded what the manager promised to him to prove that he was worth a higher salary. The employee tried to make his manager to believe one thing rising the salary is not just for personal profits but also good for the company.

E (Emotional Connection)

When we negotiate with people, we should try to connect what we consider with what others consider. The employee make the manager remember what happened when the manager was still an employee because the similar experience can arouse people’s sympathy which can help facilitate the negotiation. Hence, when we negotiate with people or persuade people, we need to totally involve ourselves in it. Emotional connection is a way to somewhat eliminate the difference of valuation of negotiation issues(Thompson). Like when Q told the boss that with the inflation and goods price rising, the current salary can’t insure a good living standard as before, even he got a position, and then the boss will understand more of your ideas and he may be gradually persuaded.

（High effective communication）

E (Exchange)

This is just a method for us to control or make adjustments when we face obstacles or bottle neck in the process of negotiation. In the circumstance of this case, the employee find that the manager is not willing to fulfill his promise, hence the employee needs to know what the reasons are. Thus, we should assume that if we are the manager, what are our worries? Somewhat, the problems unfold at this moment. Maybe the manager thinks that the employee needs more experience or something other. If the employee knows what the manager think, he can make a strategy to talk the manager’s worries away. As what Chinese said, ‘Know the enemy and know yourself and you can fight a hundred battles with no danger of defeat.

K (Keep your credibility)

Even though the employee urged to get a higher salary, fortunately he persisted in providing grounds of argument which are real and convincing. Keeping your credibility is the premise of getting a win-win result in a negotiation. No matter we negotiate with people or persuade people, what we should do is providing what really happened by a proper means of expression and then leaving things to opposite side to consider.

Capitalize on identifying differences

To get to the final win-win situation goal, our objective is to agree to disagree. Therefore, in order to agree to disagree, it is very essential for us to be clear what are the disagrees and differences are. In accordance with Thompsons 5Ds negotiation analysis, hereby, we’ll apply it to the scenario and then we can seek out the way of reaching a win-win situation in it.

Valuation

Valuation differences says various negotiators differ in preference for issues or items, in simples words, they have different perspectives. In the case, in viewing the relation between the employees’ position and salary, from the employees’ point of view, he held an idea that the salary must match the current position, or he’ll feel unbalanced, because the employee thinks the salary he gets can really show the value that he’s creating. Whereas from the manager’s view, he considered that on one hand it was his duty to save employee cost for the company and on the other hand he thought the newly promoted unit head position didn’t deserve the big salary jump in the long term view, because the employee still has a long way to go. Hence, the different understandings of the salary and position relation causes divergence between the two negotiation parties. Hereby, they can’t agree to this disagree.

Expectations

In the scenarios, all the strategy and tactics both parties are using is to reach their initial expectations. The employee expected to get a big salary jump after the negotiation, so all the balls he shoot was right at the point. But the manager’s expectations was to not to make a big change and wanted things remained as the previous situation after the negotiation, so he tried to avoid the coming shoot and find other reference points.

Risk attitude

The temporary situation indicated that both the manager and the employee were risk-averse in some way. They were both in a moderate lose-lose situation avoidance degree. The employee were tough this time, but he still risked to fiercely argue with his manager for a jump raise, or he may lose more, for he was just promoted to be a unit head and had worked in the company for years, if he lost the job, that meant a lot. While what the manager concerned was the company may suffer from losing an important unit head, which will also have negative influence on other employees engagement and retain. In this case, the existence of risk-averse attitude brings possibility to reach a win-win negotiation.

Time preference

Just like the old saying goes, ‘a watched pot never boils’. The employee is much more impatient than the manager. Being impatient will bring very passive effects to the negotiation, the above analysis has already elaborated it. The employee’s impatience may result in a lose-lose situation or even a losing of current job, even though the manager was risk-averse in some way.

Capabilities

The capabilities of employee and the employer in this case differ a lot from each other, but they are of high mutual reliance. The employee has an particular sufficient skill, but he lacks a macro-view sense and conceptual management ability which are held by the employer. This difference also creates positive elements to approach to win-win situation.

（How to negotiate?）

Ideal win-win situation

There’s always a ‘lose-lose’ situation behind every successful win-win situation, the crucial point is how we can make negotiating parties dig value from the ‘lose-lose’ situation. The ideal win-win situation of this scenario may as follows:

Employee win: 1.Some salary raise but not as expected; 2. Other invisible benefits and welfare. (This will satisfy most of the employee’s expectation and calm him down so as to get him back to work with high efficient status.)

Employer win: 1.Business expansion and projects executing continues. 2. Employee engagement enhanced.(This will partly promote company’s business and partly stimulate other employee to work harder to get promoted.)

Employee ‘lose’: More responsibility and work assigned. (If the manager makes the employee think that this is one of the future leaders development plan, it will play an positive role rather than negative.)

Employer ‘lose’: More employee cost. (If the outcome from spending more employee cost, then the negotiation agreement is a good business.)

Conclusion

We can never say a negotiation is successful until it reaches the win-win situation. From simulating and analyzing the above scenario, we end up with the conclusion that the macro-view strategy to a win-win outcome is ‘Agree to disagree’. Only in that case, the both negotiating parties can get what they expected respectively and even the so called ‘lose-lose’ situation can be transferred to a future win-win situation if we use the right tactics and play the right cards. There’s no absolute theory or method that fits every negotiation, but what we can master is the right direction and the right tool on the way to win-win, and the outcome is up to where we go and how we use the tools.