Lack of preparation in a negotiation almost always sets a person up for failure. First and foremost, each party must clearly define their own goals and objectives. Secondly, each party must anticipate the goals of the opposition. This may require doing some background research. Finally, each party must come up with various alternatives to their main objectives.
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 50 cent/hour 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 Landscape Labourers 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 lunch-hour. 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 labourers who will do the work for less money.
- Both of these arguments are probably true. Landscape Labourers 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 landscaper 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 landscaping businesses 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 a foreman.
- My bottom-line is to receive an extra dollar an hour 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 negotiation strategies and tactics.
In business, the goal of negotiating parties should always be for mutual gain. This type of win-win negotiation is often called collaborative negotiating. The opposite of collaborative negotiating is called competitive negotiating. The goal of competitive negotiating is for one party to win and the other to lose. Dishonest practices, such as lying, manipulation, intimidation, and bribery are often used in this type of negotiation.
Main Principles of Collaborative Negotiating:
- Resolve previous conflicts ahead of time
- Deal with issues, not personalities
- Commit to listening more than speaking: The more you know about your counterpart, the more likely you will achieve your goals. You cannot convince someone of something when you do not know anything about them, or what their own needs are. A common mistake is to prepare one's next question or point while the opponent is speaking.
- Establish trust in the onset
- Develop a common goal
- Discuss a common enemy
- Take opponent's views/needs into careful consideration: Not only do you want to win this negotiation, you want your opponent to win as well, so that he or she will negotiate with you again in the future.
Markus Applies the Principles for Collaborative Negotiating
- I will not discuss the fact that I was only offered a 50 cent 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 landscape companies in the region, and ensure him that my goal is to have a lifelong career at Landscape Labourers.
- I will say that I hope I will never have to work for a company that does a poor job, such as Powell Designs.
- I will acknowledge that last year's weather was a problem and note that it is not anyone's fault that the company lost money.
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:
- Promotion Opportunies
- Insurance (medical, dental, accident, life)
- Vacation time
- Retirement/pension plans
- Stock options