If you’re in HR, you’re negotiating 24—7 says expert Douglas McCabe, PhD. You’re negotiating contracts, negotiating with peers, subordinates, and bosses. You’d better figure out how to do it right.
Negotiators have high status in this country, McCabe says; you don’t put losers on your negotiating team.
McCabe, who is professor of management at the McDonough School of Business, Georgetown University, offered his negotiating tips at the BLR® HR Strategic Summit, held recently in Scottsdale, Arizona.
Benefits of Being a Better Negotiator
- Improved commercial, business, and interpersonal long-term relationships
- Ability to resolve conflicts internal to your organization
- Ability to achieve optimal solutions to difficult problems
- Better profits and productivity
What is Negotiation?
- The process of two or more individuals, parties, or groups coming together for the strategic purpose of reaching a mutually and bilaterally (or trilaterally) beneficial agreement. (HR professionals negotiate over business and commercial contracts, salary, performance evaluations, merit pay increases, and other employment-related issues, McCabe notes.)
- A means of reaching agreement with both sides willing to make concessions. If there is no movement, there is no negotiation.
- The art of compromise.
- A form of internal and external conflict management.
- The process of proposal—counterproposal, proposal—counterproposal.
All of the above are subject to either win-win solutions or win-lose conflict, McCabe says.
The Four Kinds of Negotiations
McCabe says pros use four terms to define the type of negotiation taking place.
Distributive Bargaining
In distributive bargaining:
- One side can gain only if the other side loses.
- Long-term relationships are often sacrificed.
- The objective is to decimate the opponent.
- It’s a zero-sum exercise.
- Trust is virtually nonexistent.
- Greater reliance is placed on raw bargaining power.
- Negotiators view each other as adversaries—it is a gladiatorial contest.
Distributed bargaining is considered an outmoded philosophy. You should only consider this approach when you are sure you will never see the other side again, McCabe says.
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Integrative Bargaining
- A mutually beneficial process involving long-term relationships.
- Features multidimensional aspects.
- Participants seek agreements that work well for individuals and for parties; a win-win negotiation philosophy.
- Tactical efforts are made in an attempt to identify a number of alternatives to solve a problem, and to expand the number and type of mutually beneficial and satisfactory solutions.
- Communication is conducted in a respectful, honest fashion.
- The process values mutual respect.
- Participants trust the other side’s intentions.
- Mutual gain is emphasized.
- Open and honest communication is stressed.
- Long-term rather than short-term business relationships are sought.
Interorganizational Bargaining
This form of negotiation is used when attempting to achieve consensus within your company or firm, says McCabe. It may be used to assuage the conflicts that can occur inside any organization and also within an internal, alternative dispute resolution (ADR) system.
It is particularly important that the chief negotiator achieve a rapprochement among and between the members of his or her own bargaining team before negotiations commence or balkanization may occur.
Attitudinal Structuring
This form of negotiation is an attempt to influence the attitudes and relationship of the negotiating parties. It tries to remove conflict and encourage cooperation (especially in employee relations), McCabe says.
Nonnegotiables
McCabe offers two nonnegotiables, bottom line and BATNA.
Bottom Line/Walk-Away Point
Never enter into a negotiation unless you know your bottom line, says McCabe.
That is the lowest valued outcome that you are willing to accept. It’s sometimes referred to as a reservation price. Before you begin the negotiation, it’s important to ask yourself:
- What is the least I am willing to accept?
- At what point will this be a bad deal?
Don’t mention this bottom line until the end of a negotiation—otherwise, a professional negotiator will “nibble you to death,” McCabe warns.
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Batna
The Batna, or Best Alternative to a Negotiated Agreement, is your backup plan, says McCabe. This is what you will do if negotiations fail. Knowing this can help you determine your walk away point.
Determine your BATNA before negotiations commence, says McCabe. What action will you take if talks break down? What will you do if an agreement or contract cannot be reached?
It is strategically important to research as much as possible or to deduce the other negotiator’s BATNA.
In tomorrow’s Advisor, we will present more of McCabe’s tips, plus an introduction to the new, affordable turn-key training system from BLR’s, TrainingToday.
Great piece–HR’s bargaining skills are often underappreciated by the C-suite. But any position that is as people-oriented as HR requires skilled negotiation skills even if they come across as other skills (e.g., judgment, diplomacy).
These tips are helpful both at work and outside of work. Thanks!
Which type of negotiating is most effective for HR-type issues?
Shouldn’t it be “Intraorganizational Bargaining”? Interorganizational means between organizations, not within a single organization and I don’t see HR being a leader in that role. HR can help top leadership define the bottom line or BATNA in negotiations between organizations, not be the negotiator. Intraorganizationally, however, we are in a good position to facilitate negotiations between various units or departments.
The tips Steve Bruce has shared are not only educative but valuable approach to successful negation and harmonious work environment.