Case Background:
Organization Profile:
Carrier Hong Kong Limited (CHK) which is a well-known air conditioning company in Hong Kong. In CHK, there are many chartered engineers and qualified technicians with license required by Hong Kong Government. CHK consists of many branches to ensure the daily operation including: Service Department, Equipment Sales Department, Financial and Credit Control and Marketing department. Each department has its own role in order to maintain the daily operation of the services. Service Department and Equipment Sales Department plays an important role in generating profit by selling products and services. Also, Financial and Credit Control Department takes a role to monitor income and expenses as well as risk management on financial aspect. Marketing Department takes a role in promotion and advertisement. In other words, to simplify the organization structure, it can be known that Marketing Department is a spending department whilst other departments are departments for generating income for the hold company.
Role and Perspective:
Employer, top management
Focus on Inhibitors - Inhibitors can be defined as any factors that prevent win-win situation. It may be kind of things that lack of trust, transparency and information.
Situation:
As an employer, one of the employee, who has acquired MBA and is working as the Manager of Marketing Department, is now negotiating with me about the increase of salary.
How to arrive a Win Win Negotiation Outcome?
Reason for negotiation tactics that did not work well resulting inhibit from arriving at a win-win outcome:
1. False conflict
False conflict can be known as illusory conflict. It occurs when people believe that their interests are incompatible with the other party’s interest. False Conflict is the result of inadequate group information. As an employer, keep silent is the best negotiation tactic for increasing salary to my staff. However, this also result the problem of lack of information for negotiation. With no communication, I will never know what my employee wants. Under this situation, what I can do is to make assumption. However, as an employer, I will just assume his interests are incompatible. Besides, the lack of information or low transparency will also lead to lose-lose effect that both parties want the same outcome. In one side, employee is requesting the increasing of salary where in my side I just want to save the salary increase. With such the desire of same outcome, I won’t wear myself down. This false conflict resulting inhibit from arriving at a win-win outcome.
2. Fixed-pie perception
Negotiators often fail to reach integrative ("win-win") agreements because they think that their own and other's preferences are diametrically opposed, i.e. fixed-pie perception. As an employer as well as the negotiator, the lack of information about employee’s preference and priorities which resulting me to assume employee wants the same and values the same things in the same way as he does. The size of the pie thus is perceived to be fixed and own and other's preferences are perceived as diametrically opposed. Fixed-pie perceptions lead to engage in distributive bargaining and to forego possibilities for integrative agreement, typically resulting in suboptimal agreements that resulting inhibit from arriving at a win-win outcome.
3. Illusion of transparency
The illusion of transparency is a tendency for people to overestimate the degree to which their personal mental state is known by others. It occurs when negotiators believe they are revealing more than they actually are. As an employer, what I want is to boost the sales figures in order to generate more profit. However, this employee comes from marketing department, which is a spending department that doesn't commit the same objectives of mine; even he had pursued and achieved his role of marketing. Besides, although he has acquired MBA qualifications, what I want is a professional qualification instead to generate profit for my company. What he has and did, is not the things I actually want. It can be seen as the employee overestimate himself and resulting inhibit from arriving at a win-win outcome.
Reason for negotiation tactics that did work well resulting inhibit from arriving at a win-win outcome:
1. Perspective-Taking
Perspective taking means that by taking the perspective of the other party, negotiators attempt to see the world through the counter party’s eyes. By understanding the content of how situation a look from other point of view and conveying empathy toward conflict partner, I am not only get “into the shoes” of the other person, but more accurately, get “into the heart and soul” of the other person. As an employer, due to inhibitors that lack of information and low transparency, what I can do is to attempt to see what the employee thinks, I can get the best answer why he is asking for salary raise. As other unit heads with same responsibilities had got the better offer already, why doesn't the employee can get the same things? With this perspective taking, it’s more likely for me to make a concession and so as facilitate arriving at a win-win outcome.
2. Inquiry about others’ interests and priorities
A negotiator could ask the other party in a negotiation any number of questions, especially the questions about underlying interests and questions about priorities in order to expand the pie. Since there is the present of inhibitor that I have limited information about my employee’s interest, I have to ask the questions about interests and priorities in order to get know what the employee’s wants and preferences. Actually, through this inquiry, I can generate information of employee wants a $5000 salary raise instead of getting more with the purpose of having equally payment with other unit heads. Also, if I offer alternatives to this $5000, I can know his priorities that I can take it as information or for judgment.
3. Offering information and priorities
It is a fallacy to believe that negotiators should never provide information to the counter party. But in the reality, if you do not provide information, neither will the other party. As I am now suffering from lack of information, the best solution is to provide some information from my side. By signaling my willingness to share information about my interests, I capitalize on the power principle of reciprocity: “if I share information, employee will often share as well.” So, I should try to let the employee knows what I cannot be offered to him and at the same time I can generate basic information on what he wants as well. I can let him know offering of $5000 salary raise is incompatible, try to generate any other offers he can accept in order to achieve win-win negotiation outcome.
4. Multiple equivalent simultaneous package deals
The strategy of making multiple offers of equivalent value simultaneously can be effective even with the most uncooperative of negotiators. The strategy involves presenting the other party with at least two proposals of equal value to oneself. As I am now having insufficient information about my employee’s expectation and interest, I can offer varieties of different packages with same value for example value of $3000 like travelling allowance, family insurance and education scholarship to deal with. It can be seen as kind of concession in the view of employee in order to achieve win-win negotiation outcome.
5. Avoidance of single-issue offers
This means that do not negotiate each issue one by one as it does not allow negotiators to make trade-off between issues. As the information about employee’s interest is uncertain, what I can do is to try to liaise the issue as a package like travelling allowance, family insurance and education scholarship instead of just a salary raise. This allows widening the bargaining zone of my side with many offers to be chosen. As mentioned, although the value may be the same, the total expenditure is relatively less in long run. But it seems kind of concession in the view of employee in order to achieve win-win negotiation outcome.
1. Differences in valuation
Different negotiators have different strengths of preference for each issue, i.e. valuation. As the employer, my pure objective is the generate more profit as I can as well as my subordinates do. The salary increase of my employee should be based on how many profit he can generate for me rather than his overall performance. Since the employee is the manager of Marketing Department, a spending department as mentioned. It should be grateful for me to offer him with offer with small amount of salary increase together with other allowance instead of increasing a high salary rate it order to achieve win-win negotiation outcome.
2. Differences in expectation
Negotiator involves uncertainty, negotiators differ in their forecasts or beliefs about what will happen in the future. As an employer in the top level management of company, what I expect or want my subordinates have is expertise together with professional qualification or licenses, especially employee in managerial level with the purpose of increasing the reputation or image of my company. In my mind, I will consider offering a package with higher increase in salary for those employees who are professional qualified / certified. Also, I believed my employees are also concerned on the work-life balance as well as family care instead of just salary increase. Hence, I can provide the offer not only the focus on the salary, but also the allowances in other areas with the purpose of achieving win-win negotiation outcome.
3. Differences in risk attitude
Negotiators agree on the probability of future events but feel differently about risk taking. For current situation, we both sides agree that being professional and knowledgeable of the employees are beneficial to both employer and employee. I am now willing to take a risk of losing an employee now because of no “big money” being offered, or losing the employee after he being qualified. But I have a gain-frame which the employee will continue to work for the company after being qualified which can benefit the company. It is also to achieve win-win negotiation outcome.
4. Differences in time preferences
Different people value the same event quite differently depending on when it occurs. As an employer, as mentioned, I prefer offer a salary increase to employees who have professional qualification. Hence, I will offer the “big money” salary increase to him after he got professional qualification. And hence I can only offer him with different allowances as reward for satisfying the good performance, which is also to achieve win-win negotiation outcome.
References:
1. http://www.peakpd.com/Articles_pdf_format/False_Conflict.pdf
2. http://dare.uva.nl/document/123511
3. http://www.mediate.com/articles/rundeC3.cfm
4. Bazerman,M.H,& Neale, M.A. (1992). Negotiating rationally. New York: Free Pres.
5. Leigh L. Thompson (2009), The Mind and Heart of the Negotiation
6. James K. Sebenius, The Hidden Challenge of Cross-Border Negotiations
No comments:
Post a Comment