Negotiating Planning Exercise - Essay Example

NEGOTIATING PLANNING EXERCISE By Location Negotiating Planning Exercise Introduction The human resource department in any organization must play a critical role in establishing functioning employment relations. Employment relations highlight the salary packages, rewards schemes, expected working hours, the number of holidays allowed, and all the terms and conditions regarding the employment. However, the employment relations are becoming more dynamic as employees have the right to demand a pay rise as well as terms that are more favourable. Many employees have joined trade unions that serve to negotiate employment terms with employers. Trade unions are regarded highly because they have a better negotiating position and their negotiation process is likely to yield positive results. In many cases, the negotiation process between trade unions and employers is expected to result in a win/win situation. However, both parties should compromise if they are to reach a favourable agreement. This paper will discuss the negotiation process between a manufacturing and engineering company and a trade union, which is legally recognized. Steps Involved in the Negotiation Process 1. Preparation Stage Experts of the negotiation process have highlighted that there are four main stages. The first stage involved a proper preparation for the negotiation process by both parties. Both the management team and the trade union team need to prepare adequately for the negotiation process. Usually, negotiation with trade unions is regarded as collective bargaining. Preparation for the negotiation process allows both teams to consult widely, especially with all the members of the organization in an effort to acquire adequate information and design the most effective bargaining approach. Proper consultation before the negotiation process allows both parties to have the required morale in the bargaining process (Alonso & Lucio 2006, p. 65). During the preparation stage, both parties should rely on the assistance of both legal and public relations experts. Worth noting is the fact that employee relations of any organization must conform to the existing employment laws. Therefore, it is necessary to bring in legal expertise during the preparation stage. The preparation stage also allows the parties to decide on the most effective venue, establish the ground rules that will define each session, as well as discuss other issues that may be of importance during the sessions. The preparation Stage for the Management Team The management team should ensure that it carries out effective planning of the bargaining process during the preparation stage. The stage is necessary as it allows the management team to collect a diverse range of data from both within and without the organization. At such times, the management team should consult with other organizations in the region and evaluate their salary and compensation schemes. It is important for the management team to consult with both legal and public relations experts in order to have a clear understanding of the required industrial relations. The management team of the company should also determine the specific size of the economic package that it can offer during the negotiations. For example, the company has suggested that it can offer a 3% increase in basic pay as well as a 1% increase in the performance related pay (Beardwell, Holden, & Claydon 2005, p. 78). It is of critical significance for the management team to be very specific about its limits in terms of the economic package prior to the negotiations. In addition, the management team should prepare the relevant statistical displays as well as supporting data that it will use to back up its arguments. Most importantly, the management team should draft a bargaining book that the company can use for the negotiation process. A bargaining book contains the relevant information about all the issues that need to be discussed during the negotiation as well as their causes and effects to the company. The management team should develop a clear agenda for the negotiation and select the representatives who will make presentations during the different sessions (Blyton & Turnbull 2004, p. 30). Preparation Stage for Trade the Union The trade union team also requires to undertake rigorous preparations for the negotiation process. The union team should collect adequate information that can serve as convincing ideas during the negotiation. Worth noting is the fact that members of the trade union rely on the collective bargaining capacity of the trade union. Therefore, the union should acquire information concerning the company’s financial situation and see whether it has the potential to offer the stated salary increase (Danford 2005, p. 55). The union should also consider the attitudes exhibited by the management team towards the issues at hand. Specifically, the union team should consider previous negotiations in order to determine the attitude of the management team. It is important for the union team to understand the desires of the employees as well as their attitudes. With information on these three aspects, the union team is in a better position to indulge in collective bargaining. The trade union team should also define a clear agenda and select individual with exemplary communication skills. 2. The Negotiation Stage In order for both parties to succeed in the negotiation stage, they need to identify the most effective methodology for bargaining. In this case, negotiation by objectives seems to be the best approach for both the management team and the union teams. Relying on the negotiation by objectives methodology, both teams need to create a list of the bargaining items. The bargaining items should be categorized according to priority and on whether they are financial or non-financial. Both teams should settle for realistic and optimistic objectives that can be achieved through the negotiation process (Gennard & Judge 2005, p. 31). Adopting this approach gives the negotiation process a sense of direction and enables both teams to assess the progress of the negotiation process. During the first session of the negotiation process, the trade union team should present its position, giving supporting evidence to all its demands. At this point, the union team should highlight that there is a need for a 8% increase in basic pay, reduction of working hours to 37, and a review of the holiday allowance. The management team plays the role of chairperson of proceedings and should give the trade union team adequate time to make its presentation (Hollinshead, Nicholls, & Tailby 2003, p. 48). During the second session, the management team may now present its views and bargaining items. During this session, the management team should highlight that it can offer a 3% increase in basic pay, 1% to be distributed in performance related pay, and 38 working hours per week. Worth noting is the fact that the management team should take precautions when handling the bargaining items of the trade union since the company has a continuing relationship with the trade union (McBride & Greenwood 2009, p. 60). After the opening session comes the middle period of the negotiation process characterized by shorter speeches, and subject to adjournments when necessary. At this point, either the management team or the trade union team can request for an adjournment. The adjournment allows both teams to have more time to evaluate new information or critically the offers made. During this period, both teams can settle down and avoid fatigue. Adjournments are effective breaks that allow for a wider consultation. After the adjournment period, both teams should seek to conclude the negotiations (Noon & Blyton 2007, p. 59). Notably, the expertise of the negotiators depends on how they utilize the adjournment period. Collective bargaining should focus on integrative bargaining and not compromise. Therefore, the management team should clearly state its limits and only choose to concede when there is a solid reason for that. During the conclusion of negotiations, both parties experience a decision-making crisis. Usually, both teams depending on the realities of power and conflict defining the negotiation process may experience anxiety. Both parties should make sure that the outcome is clearly stated. In this case, the outcome of the negotiation is that employees should work for 37.5 hours per week. The number of hours represents a halfway agreement between the suggestions of the management team and those of the trade union. Both parties should agree on a 5% increase in basic pay without performance related pay increment. The 5% increase will not cost an economic burden to the company since it does not have to give the 1% increase in performance related pay (Rose 2008, p. 89). Other outcomes include the introduction of maternity and paternity pay, while sick pay remains the same. 3. Signing the Agreement In this case, both the management team and trade union team should sign a substantive agreement that gives details of the agreed basic pay increase and other outcomes of the negotiation process (Salamon 2000, p. 120). 4. Follow-up Action The fourth stage ensures that the company implements all the agreements signed after the negotiation process. The trade union has a responsibility of ensuring that the management team implements all the negotiation outcomes within the stated periods (Williams & Adam-Smith 2010, p. 111). Conclusion Evidently, the negotiation process requires a measure of expertise and proper consultation. Therefore, both the management and trade union teams should prepare adequately for the collective bargaining and acquire the relevant supportive data for their claims. The management team should be willing to listen to the claims made by the trade union representatives and present the company’s claims without any form of aggression. Even in cases where the trade union team is aggressive and emotional, the management team should not lose composure. As discussed above, collective bargaining can adopt an integrative approach that promotes the interests of both parties as in the case of the negotiation outcomes presented above. Bibliography Alonso, L. E. & Martinez Lucio,M 2006, Employment Relations in a Changing Society, Baring House: Palgrave Macmillan. Beardwell, I., Holden, L. & Claydon, T 2005, Human Resource Management: A Contemporary Approach, London: FT Prentice Hall. Blyton, P. & Turnbull, P 2004, The Dynamics of Employee Relations, Basingstoke: Palgrave. Danford, A 2005, Partnership and the High Performance Workplace, Baring House: Palgrave Macmillan. Gennard, J. & Judge, G 2005, Employee Relations, London: CIPD. Hollinshead, G., Nicholls, P. & Tailby, S 2003, Employee Relations, Harlow: FT Prentice Hall. McBride, J. & Greenwood, J 2009, Community Unionism, Basingstoke: Palgrave Macmillan. Noon, M. & Blyton, P 2007, The Realities of Work, Basingstoke: Palgrave Macmillan. Rose, E 2008, Employment Relations, Harlow: Pearson Education. Salamon, M 2000, Industrial Relations Theory and Practice, London FT Prentice Hall. Williams, S. & Adam-Smith, D 2010, Contemporary Employment Relations, Edition, Oxford: Oxford University Press. Read More