31 October 2016
Joydeep Hor, Founder and Managing Principal and Sam Cahill, Associate
The workplace presents a broad range of situations where parties are required to negotiate. These can range from everyday tasks (such as rostering, allocating work and setting deadlines) to more challenging situations (such as industrial disputes or litigation). In any context, the negotiator’s task is to work towards a solution that meets some of the needs of each of the parties to enable the parties to reach agreement and resolve their dispute. This article sets out seven tips for becoming a more effective negotiator.
Tip 1: Focus on interests, not positions
A negotiator should look for ways to address the needs and interests of the parties, rather than simply defending their own position, or attacking the position that has been adopted by the other party.
While parties will often have conflicting positions, they may have some interests that do not necessarily conflict. This is illustrated by the classic example of the two sisters who each wanted a whole orange. As only one orange was available, they were each given one half. The first sister used her half to make orange juice (discarding the peel) while the second sister used her half to grate the peel to make an orange cake (discarding the flesh). In this scenario neither party was satisfied with the outcome.
If the sisters had taken an interest-based approach to resolving their dispute, and explored why they each wanted the whole orange, they would have realised that their underlying interests were not necessarily in conflict, and could have constructed a solution that met both of their interests.
In the lead up to an annual salary review, John tells his manager, Katie, that he is seeking an increase of $10,000 per annum.
Katie values John and wants to retain him as an employee, but only has the capacity for a salary increase of $5,000. She considers that John’s interests go beyond simply maximising his salary. Indeed, John has a broad set of interests, which includes:
- recognition of his contributions to the team;
- confirmation of his seniority and status;
- having a clear path for career progression; and
- having greater flexibility in working hours and locations.
Having considered these interests, Katie is able to develop a range of options that John may find satisfactory in addition to a modest salary increase. This might include, for example, a new job title, a larger office, confirmation that he is on track for a promotion and/or the ability to work from home on some days. Moreover, the prospect of a larger salary increase could be framed in terms of reaching specific targets in the future, with a clear time period for achieving these targets.
Tip 2: Be prepared
Step 1: Know your own interests
Your interests will provide you with a guide to what you are looking to achieve from the negotiation. You should ask yourself:
- What outcomes would be acceptable to me?
- What is negotiable and what is non-negotiable?
- How can I justify these outcomes to my stakeholders?
However, you should be careful not to focus only on your own side of the equation. The key to effective preparation is also to pay attention to what the other party is seeking and to understand from where they are coming. This will enable you to approach the dispute with a view to achieving a constructive resolution.
Step 2: Consider the interests of the other party
The best way to consider the interests of the other party is to ask the “why” question. Why do they find the current situation unsatisfactory? Why is the party seeking what they have requested? Why do they feel the way they do? This will allow you to go beyond the initial position that a party is advocating, and work towards a resolution that has the capacity to satisfy some of the needs of both parties.
Step 3: Consider any emotional, historical or relationship factors
A full understanding of any emotional, historical, and relationship factors also provides useful insights into the motivations of the parties.
It can help you to adjust your negotiation strategy to the particular circumstances.
Hence, you should consider:
- What do you know about the other party, including their personality and track record? What does this tell you about the nature of their request?
- What do you see as the emotional or historical factors that motivate them?
- What sort of outcome would they be able to justify to their stakeholders?
- In light of these factors, what outcomes are likely to be acceptable or unacceptable to them?
Step 4: Identify options for resolution
The earlier stages of preparation should enable you to develop a set of options to put to the other party that are realistic ways of resolving the dispute and are likely to have some appeal to them. These should be based on your careful consideration of the interests of the parties as well as any emotional, historical or relationship factors. Having a range of options available enables the options to be packaged together in varying ways, and also gives each party the capacity to have a say in the ultimate outcome.
Tip 3: Identify areas of agreement
A negotiator should seek to identify areas of agreement from the outset of the negotiation process. It does not matter that the subject matter of the agreement may be minor or procedural. The fact that the parties can reach an agreement on something signals that each party is willing to act in a reasonable manner and is capable of resolving the more difficult issues. It also sets up the negotiation as a joint problem-solving exercise, rather than a conflict management situation.
An employer has received a log of claims from a union representing the employees at the workplace. Amanda is appointed as the bargaining representative for the employer. At the first meeting with the union, Amanda begins by proposing an agenda for the meeting, as well as a clear timeframe for further meetings. The union agrees to Amanda’s proposal and the parties begin to negotiate on the substantive issues. Not only has Amanda demonstrated that the parties are capable of reaching an agreement, she has also sent an important message that she is committed to a process for achieving an outcome.
Tip 4: Demonstrate your willingness to make a deal
A negotiator should demonstrate to the other party that their primary goal is to resolve
the matter. This helps to set the tone of the negotiation process, and can encourage the other party to commit to working towards a solution.
Blake has made an anti-bullying application to the Fair Work Commission. Susan attends the conciliation conference as the employer’s representative. At the conciliation conference Susan starts by telling Blake that she is interested in resolving the matter. She explains her preferred options for achieving a resolution. She then tells Blake that she is open to considering any options that he may wish to put on the table for consideration.
Tip 5: “Help me understand…”
A negotiator should always try to understand what is motivating the other party. One of the most effective ways to do this is to ask them for help.
For example, you could ask:
- “Help me understand why you want this outcome.”
- “Help me understand why you are reluctant to agree.”
- “Help me understand what might change your point of view.”
The simple phrase “help me understand” can have a significant impact on the tone of the negotiation and the mindset of the parties. Firstly, it can help to make the negotiation feel more open and collaborative. Framed as a request for “help”, it has the potential to prompt a positive emotional response from the other party. It also puts the onus on the other party to justify or explain their position.
“Why do they find the current situation unsatisfactory? Why is the party seeking what they have requested? Why do they feel the way they do?”
Tip 6: Ignore ultimatums
A negotiator should avoid engaging with any ultimata issued by the other side. The best response to an ultimatum is to turn the discussion back towards seeking a resolution. It is often better to walk around a demand rather than walk into it, or try and walk through it.
John and Sally are involved in a heated argument at work. The next day, John tells his manager, Mary, that he is going to resign unless Sally is dismissed for her role in the incident. Mary does not try to convince John not to resign. Instead, she says: “This is obviously an important issue… Let’s talk about how we might address this situation. Are there things about how the workplace is functioning that you would like to bring to my attention? Are you concerned about any broader issues in the workplace? How do you think these issues could be resolved?”
Tip 7: Remember that “no” doesn’t always mean “no”, it can mean “not now”
A negotiator should not be discouraged if an agreement cannot be reached immediately. There will usually be the opportunity for further discussions and the prospect of an eventual resolution. If there hasn’t been agreement, the negotiation is still a success if it has narrowed the issues between the parties or provided greater clarity about motivations and needs, thereby building a foundation for a resolution at some time in the future.