Introduction to Negotiation Concepts

Richard A. Posthuma, J.D., Ph.D., GPHR, SPHR 2010

 Negotiation

• Goals
> Two parties can voluntary reach an agreement to
resolve a dispute.
• Issues
> The things that they are talking about (e.g., wages,
benefits, lawsuits)

© SHRM 2010
For more on Indian HR industry, click here 2
 Positions

• Initial offer/demand. This is where you start the

negotiation.
• Target point. This is where you reasonably would like to
end up in negotiation.
• Resistance point. This is as far as you are willing to go
to reach an agreement.
• BATNA. This is your Best Alternative To a Negotiated
Agreement.
> It often influences your resistance point.

© SHRM 2010
For more on Indian HR industry, click here 3
 Employer-Employee Wage Negotiation Example
Employee’s BATNAs
(Another Job: $55,000;
Get MBA)

Employee’s Employee’s Employee’s Initial

Resistance Point Target Point Request

$50,000 $55,000 $60,000

$65,000

Employer’s Employer’s Employer’s

Initial Offer Target Point Resistance Point

Employer’s BATNAs
(Another Candidate, Outsourcing)

© SHRM 2010
For more on Indian HR industry, click here 4
 Dual Concerns and Conflict Styles:
Employer vs. Employee
• Negotiations can also be thought of as a set of concerns from
two parties.

• For example:

• Employer’s concerns:
• Lower costs
• Higher output or productivity from employee

• Employee’s concerns:
• Higher wages and benefits
• Job security

© SHRM 2010
For more on Indian HR industry, click here 5
 Negotiation and Conflict Styles
Example: Employer and Employee

e
ativ
egr
t
In

Di
str
ibu
tiv
e

Employee outcomes:
Higher wages and benefits; job security

© SHRM 2010
For more on Indian HR industry, click here 6
 Negotiation and Conflict Styles
Example: Employer and Employee

Compete Collaborate

Compromise

Avoid Accommodate

Employee Concerns:
Higher Wages and Benefits; Job Security

© SHRM 2010
For more on Indian HR industry, click here 7
 Negotiation and Conflict Styles
Example: Employer and Employee

Compete Collaborate
(Wage cuts) (Skill training:
productivity or sales
incentive compensation)

Compromise
(50 / 50 split)

Avoid Accommodate
(Outsource) (Big wage increases)

Employee Concerns:
Higher Wages and Benefits

© SHRM 2010
For more on Indian HR industry, click here 8
 Negotiation Summary

• Negotiation is about resolving disputes on divergent

interests.

• Sometimes negotiations are distributive (win-lose).

• Negotiations can be collaborative, integrative win-win

situations.

© SHRM 2010
For more on Indian HR industry, click here 9
 Thank you! !

For more on Indian HR industry, click here