Posted: May 18th, 2022

: Reaching Agreement in a Workplace Negotiation

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A‌‍‍‍‌‍‍‌‌‍‍‍‌‍‍‍‍‌‍‍n Exercise: Reaching Agreement in a Workplace Negotiation Introduction The purpose of this exercise is to gain experience in negotiating over issues that might be the subject of an enterprise agreement. The example is based on a dairy products company and specifically on work organisation and marketing issues surrounding the production ice cream and other milk-based products. There is one major union involved that represents all the process workers (of which there about 100 full time employees). The situation is that there have been a number of meetings already. Both parties feel the need to ‘wrap this one up’ and finalise an agreement. You will take the role of either management or worker/union negotiators. For the purposes of this exercise the issues to be negotiated over all revolve around important issues of principle and it should be possible to negotiate and reach agreement without delving too much into the intricacies of ice cream production (which is another way of saying you should not have to ‘make up’ lots of so called facts in order to reach an agreement.) The critical issue in production and marketing ice cream is, as you can easily imagine, one of flexibility (such as responding to an increase in demand in a sudden heat wave) but issues of control and reward are important for the employees. Although the context of this negotiation is the workplace, the skills you will need to reach an agreement are relevant to negotiations in other contexts. The Issues The classification structure and pay rates have been agreed as have many other issues – annual leave, meal breaks etc. There are five issues which remain to be resolved. i) the relativities between the various classifications have been established but it is still necessary to agree upon the basis for a general increase in wages during the life of the agreement ii) the skill requirements for each classification and the related training modules have all been agreed; the workplace arrangements, such as the process by which employees will be identified for or can nominate for training, now have to be agreed iii) the hours worked are currently 38 per week (5 shifts of hours); it has been agreed that the nominal weekly hours of 38 will be retained but worked across a multi-week cycle; it will be necessary to agree upon the length of the cycle and other roster issues iv) the duration of the agreement v) the establishment of a joint workplace committee: most of the practical arrangements (size, facilities etc) have been agreed and only two issues remain – whether the committee should be a negotiating body or a consultative one; and whether any company information can be kept confidential from the committee Basic background information The last agreement was concluded 2 years ago, the main element being a 2% + 2% increase in wage rates. Inflation has been around 3% and is expected to continue at that level. Productivity improvements in the company have been around 2%; there has been continual minor upgrades of equipment. The company is relatively profitable but there is strong competition in the market place. Preparation Within your negotiation team • establish the principles which will be important for you and the questions which will have to be addressed to your satisfaction before agreement can be reached in each of the issues • develop a broad strategy to get the other party to accept your principles as the basis of eventual agreement • develop an opening position • organise your team for the negotiation session Negotiation Your team will be required to negotiate and reach agreement on these issues. You can expect to take some adjournments during the course of the negotiation. If you do not reach an agreement, the current dispute procedure provides for reference to a private arbitrator. There is no provision for mediation so both parties would forgo any direct control over the eventual outcome; therefore it is in neither party’s interests to hand over their issues to an arbitrator. Once the negotiation is complete you will have to report back to either the company senior executive team, or to the union membership. Clearly, if you have not achieved a good agreement then this will be a difficult meeting. However, you can anticipate that it will be even more difficult if you have not reached agreement at all. Suppose that you one of three managers that represent Management and you are going to negotiate with Worker/union. An Exercise: Reaching Agreement in a Workplace Negotiation Management Considerations i) the relativities between the various classifications have been established but it is still necessary to agree upon the basis for a general increase in wages during the life of the agreement • general increases during the life of the agreement can only be made on the basis of proved contribution towards improved productivity, preferably based on the performance of individual workers and paid on an individual basis • productivity benefit to be shared 60%-40% between company and workers (to recognise company investment in plant, training etc) ii) the skill requirements for each classification and the related training modules have all been agreed; the workplace arrangement‌‍‍‍‌‍‍‌‌‍‍‍‌‍‍‍‍‌‍‍s, such as the process by which employees will be identified for or can nominate for training, now have to be agreed • training opportunities to be determined by projected availability of vacancies (as determined by management) • employees to be paid only according to the work they are doing, not for the skills they hold iii) the hours worked are currently 38 per week (5 shifts of hours); it has been agreed that the nominal weekly hours of 38 will be retained but worked across a multi-week cycle; it will be necessary to agree upon the length of the cycle and other roster issues • the ideal arrangement is to establish a working year of 1748 hours each year (the same as 46 normal weeks, ie allowing for holidays) with hours varying each week according to need; this would enable more work to be done (at normal rates, not on overtime) during the busy times in the year, with shorter working weeks rostered during the slack periods • the advantage of going to any new hours or roster arrangement is reduced if employees have their earnings maintained even though they might be working less overtime • because of the way in which demand can change quickly, the amount of notice to be given prior to any changes to the roster or prior to any worker being required to work different hours should be kept to a minimum iv) the duration of the agreement • ideally you want to get a 2 year agreement as this will give you some stability and predictability in labour costs v) the establishment of a joint workplace committee: most of the practical arrangements (size, facilities etc) have been agreed and only two issues remain – whether the committee should be a negotiating body or a consultative one; and whether any company information can be kept confidential from the committee • committees role is to be consultative, it is to provide management with an employee viewpoint before decisions about the workplace are made • release of some information could compromise company competitiveness Suppose negotiations closed with few outcomes: – 18 months agreement – 154 hours in 4 weeks – Over 3% inflation, wages would increase – 30 to 45 hours a week – 3 week notice for the number of hours – There would be a bonus if someone is called in last minute Using the material and concepts discussed in textbook Lewicki, . & Saunders, . and Berry, B. (2019) (8th edition) Negotiation , McGraw Hill) , you are required to evaluate the negotiation actions and tactics of your group. Words limit: 2000 words maximum 1. Thinking about the steps in opening statements, how did your team member(s) apply the steps? (1,000 words) – This question ask you to comment on how your group members commenced the negotiations. – You need to explicitly refer to the concepts related opening statements, as covered in the week 7 lecture (will be uploaded). Some points must be addressed for this question: – Distributive or integrative approach. Explain that in begging distributive tactics was used then changed to integrative tactics to maximise positive outcomes. – High interdepended – “power with” orientation – What would be transparency of information? And what would be the purpose of transparency? – Willingness to work together to reach a series of agreements – Enhance level of participation in decision making (Use 8 sources for this question) 2. Discuss how your team members might be able to improve their use of the steps (600 words) – This question asks you to provide constructive feedback for your group members. – How could your group members improve in opening negotiation? – For example, what types of tactics are mentioned in the negotiation literature that your group members could do better? – Again, the focus here is for you to demonstrate what you know, by highlighting the ‘gaps’ between theory and the way your group members applied negotiation techniques, with particular reference to opening statements. – The more diverse the range of sources you can draw on the better. (Use 6 sources for this question) 3. Were you satisfied with the outcome of the negotiation? Why? What evaluation process or processes did you use? (400 words) – How do you evaluate negotiations? – Consider there what the negotiation literature says about the importance of evaluating your efforts. Identify how you assessed your negotiations and use relevant material to substantiate your answer. – Identify and refer to specific models of evaluation. – How has this process of evolution helped you? What insights has this taught you about your capacity to negotiate? – See the end of the week 3 lecture slides (will be uploaded) for an example of an evaluation model. (Use 4 sources for this question) IMPORTANT NOTES: Owing to word limit (don’t write more than 2000 words, 1900 words is fine), no introduction or conclusion is required. Small headings for each question will be sufficient (. Question 1, Question 2 etc.) Word document, using 12 point, Calibri font, double-justified text, with line spacing. References: 14 to 16 sources APA 7th Edition. *Note* All information provided must base on and related to chapter 2, chapter 3, chapter 4, chapter 6, chapter 7 and chapter 8 of a textbook below: Lewicki, . & Saunders, . and Berry, ‌‍‍‍‌‍‍‌‌‍‍‍‌‍‍‍‍‌‍‍B. (2019) (8th edition) Negotiation , McGraw Hill

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