Case of negotiations

In trying to create win-win negotiation agreements, one of the biggest mistakes made by negotiators is to deal with the issues on an issue by issue basis. This often results in a breakdown in negotiations because invariably, conflicting monetary issues arise that result in a showdown between the two parties. Negotiating on an issue by issue agenda does not present the opportunity to make concessionary trade-offs between the different issues

Management of Bayou Steel enlisted the help of two facilitators from the FMCS (Federal Mediation and Conciliation Services) to guide management through a win-win style negotiation with its workers. The president of Bayou said that the facilitators helped them identify each side’s objectives and concerns, and led him to believe that they had in effect, resolved 90% of the contract issues.

The facilitators set up an issue by issue agenda. They left the economic issues such as incentives, base pay, overtime, and vacation time as the final issues to be discussed. Management believed that they had correctly addressed the employees’ concerns about these pay issues.

However, union members became suspicious about management’s good intentions to take a win-win approach. They began to believe collectively that this negotiation approach by management was a disguised ploy meant to undermine their position, especially on the economic issues.

At first, negotiations went relatively well and as predicted. Yet, as the economic issues were placed on the table for discussion, the situation quickly turned upside down into a hard nosed bargaining negotiation. Management attempted to stay the course with a win-win approach, but this no longer washed with the union. Can you guess what happened? That’s right – union members walked and went out on strike.

By using an agenda to address the format of the contract negotiations, Bayou Steel failed to consider that any single issue could be so divisive. As the economic issues rose to the foreground of the talks, Bayou Steel no longer had leeway in considering trade-offs. They literally painted themselves into a corner because of their structured of agenda items.

We need to be able to compare and contrast all the issues collectively, and by order of relative importance. Package or multiple offers offer a greater latitude in finding creative solutions as it gives us more to work with, as opposed to dealing with issues on a one-on-one basis through a pre-designed agenda. Planning and using a Concession Strategy effectively can give one side a big power advantage over the other. So be careful to plan your agenda wisely.