Recruitment, Job Offer Negotiations

New Recruit Negotiations People and Organizations Agenda for Today • Review Single Text Agreement • Negotiate New Recruit • Debrief negotiations focusing on : – How to Claim Value – How to Create Value • List further courses on Negotiations Overseas Transfer Considering the Issues SIGNING BONUS 10% 8% 6% 4% 2% RECRUITER CANDIDATE 0 4,000 1,000 3,000 2,000 2,000 3,000 1000 4,000 0 SALARY $60,000 $58,000 $56,000 $54,000 $52,000 • Distributive Issues -6,000 -4,500 -3,000 -1,500 0 0 -1,500 -3,000 -4,500 -6,000 Distributive Bargaining Negotiating a Salary Candidate’s BATNA Recruiter’s BATNA Candidate’s Resistance Point Better for Recruiter Recruiter’s Resistance Point Focal Points [ ] Zone of Possible Agreement (ZOPA) Better for Candidate What Influences How Value is Distributed in Negotiation? • • • • BATNA Aspiration (Target/Resistance Points) Anchoring and Counteroffers Focal Points and Fairness How to “Claim” Value (Distributive Bargaining) • Know your BATNA and improve it. • Consider the other side’s BATNA (as well as their perception of their BATNA) and how it might be influenced. • Use standards of legitimacy • Draw on your sources of power – But be careful not to force to hard/far! – DON’T state a BATNA you are not prepared to use if necessary Overseas Transfer Considering the Issues JOB ASSIGNMENT Division A Division B Division C Division D Division E COMPANY CAR LUX EX2 MOD 250 RAND XTR DE PAS 450 PALO LSR RECRUITER CANDIDATE 0 0 -600 - 600 -1,200 -1,200 -1,800 -1,800 -2,400 -2,400 1200 900 600 300 0 • Compatible-Integrative Issues 1200 900 600 300 0 Overseas Transfer Considering the Issues RECRUITER STARTING DATE 1,600 1-Jun 1,200 15-Jun 800 1-Jul 400 15-Jul 0 1-Aug VACATION DAYS 0 30 days 1,000 25 days 2,000 20 days 3,000 15 days 4,000 10 days MOVING EXPENSES REIMBURSEMENT 0 100% 200 90% 400 80% 600 70% 800 60% INSURANCE COVERAGE 0 Allen Insurance 800 ABC Insurance 1,600 Good Health Insurance 2,400 Best Insurance Co. 3,200 Insure Alba • Integrative Issues CANDIDATE 0 1,000 2,000 3,000 4,000 1,600 1,200 800 400 0 3,200 2,400 1,600 800 0 800 600 400 200 0 Utility to Party B Integrative Bargaining Creating Value Claiming Value Shaded Region Represents All Mutually Acceptable Agreements Utility to Party A Negotiation Outcomes “Pareto Frontier” Total Points = 13,200 Middle Manager Points Integrative Bargaining 10000 8000 6000 Value Claiming 4000 2000 Value Creating 0 -2000 0 2000 4000 6000 Vice President Points 8000 10000 Individual Points Earned 10 16 14 8 12 10 6 8 4 6 4 2 Std. Dev = 2368.50 Mean = 4879.2 N = 48.00 0 -1000.0 1000.0 0.0 VPTOT 3000.0 2000.0 5000.0 4000.0 7000.0 6000.0 9000.0 8000.0 Std. Dev = 2168.40 2 Mean = 5393.5 N = 46.00 0 2000.0 4000.0 3000.0 MMTOT 6000.0 5000.0 8000.0 7000.0 10000.0 9000.0 11000.0 Joint Points Earned 20 10 Std. Dev = 2301.00 Mean = 10330.4 N = 46.00 0 5000.0 7000.0 6000.0 SUMTOT 9000.0 8000.0 11000.0 10000.0 13000.0 12000.0 What Influences How Value is Created in Negotiation? • • • • • The “Fixed Pie” Assumption Communication & information sharing Presence of Similarities Presence of Differences Relationship How to “Create” Value • Beware the “Fixed Pie” Assumption • Create an atmosphere where you can brainstorm or develop options together while refraining from judgment. • Look beyond positions and capitalize on shared interests. • Exploit differences in forecasts, risk aversion, time preference, capabilities, perceptions, judgments, or decreasing marginal utility. • Be soft on the people but hard on the problem. Tips on PREPARING for a Negotiation Over Compensation Alternatives Legitimacy Interests What will you do if you do not close this deal? Can this be improved upon? What is their BATNA?… Do your homework. What is the “going rate” for this job in this region? At this firm? Pay criteria? Identify as many potential issues as you can. Try to predict in advance which ones will be distributive, compatible, and integrative. Tips on EXECUTING a Negotiation Over Compensation Communication Legitimacy Interests Relationship LISTEN hard! Make sure you understand the purpose of the meeting. Try not to have a discussion about compensation until after you have been offered the position. Use standards of legitimacy as a shield and as a sword. To maximize joint gain, discuss issues as a package rather than each one sequentially. You may have to work with these people. Separate the people from the problem. Summing Up • Prepare, Prepare, Prepare – Know your interests – Put yourself in others’ shoes—what are their interests? Emotions? Sources of Power? – What are your sources of power? Remember Five Smooth Stones! – Generate Options – Reframe the issue(s) when bogged down – Know your BATNA—use it very carefully! • Create Value, Claim fair share • Build Relationships and be Ethical