Case Study -Pay negotiations

Scenario:

Kay, the finance manager at a large company faces a dilemma. Robert, who is one of the Accounts Directors and a union member, has requested an 8 percent raise for his work unit. His request is based on recent finance reports showing that his department has substantially contributed to a 15 percent profit increase for the organisation. He feels that his team should be compensated for the hard work and long hours they have put in over the last few years to achieve this outcome.

Kay knows the value of Robert’s team and readily acknowledges their achievements. However, she knows that the company has plans to expand and diversify. This new project will use up the majority of the profit increase for at least the next five years. She is willing to sit down with Robert and talk about how his team can get involved in the new project. There could be new job opportunities, some overseas assignments, and possible promotions to various leadership positions within the new project. Kay has flagged this with Robert; however, he is adamant that his team needs to be compensated with a monetary increase. He went as far as threatening to get the union involved if his request is unsuccessful.

Conflict-Handling

One of the types of conflicts that this scenario demonstrates is competing. The competing style is where one party cooperates to maximize its results at the expense of Robert’s needs and style. At the outset Robert was not hesitant to explain or follow another path as to why Kay declines the pay increase. Moreover, with a further threat to get the union involved, he disregarded alternative solutions from Kay and even doubled his terms of currency rewards.

The integrative approach is used by Kay. It is a collective strategy and a competitive distributive approach. This supports a win – win outcome and is used when both sides are very concerned about the outcomes. It shows that although Kay might have just refused to respond to Robert, she wants to discuss the situation with him, as she also accepts Robert’s team’s efforts and is prepared to discuss possible options.

Bargaining approach

There are two negotiations, distributive and Integrative.

Distributive 

It ensures that your goal is to bargain so that you give up less than the other side when you reach an agreement. Your goal is to win as much as possible during the talks, and that typically means that someone else will give up everything.

Integrative

That means that you compromise to incorporate the desires, the expectations, the worries and the interests of the other person into the equation. You are looking for a compromise where both sides must give up something to finalize the deal, to build a win – win scenario, rather than just worrying about losing less than the other side.

Robert uses distributive negotiations in this case. Robert’s argument is supported by claims that his working unit has significantly contributed to growth of the company and therefore their years of hard work should be rewarded. He improves his position and takes the opposite side of the interests of Kay. At the same time it is not imaginative either, because he has only one demand and even when the boss confronted him it doesn’t alter. It is clear that he does not know for his ties with the company as he threatens to imagine the union if his demands are not met.

Interpersonal Communication

The attitude leads to the bad workforce. Robert as he is not positive, is the main reason why the working environment is bad. Robert’s proposal was very specific and never saw any other rewards than himself and his family. The argument that he can accept is also very on the side. In addition, listening and comprehension are the crucial elements which affect teamwork. Robert doesn’t listen to Kay in this situation at all. He insists only on what he needs and does not look at the bigger picture. It leads to poor employment conditions as Robert’s conduct may be carried out with his own team where he may not care and just do it his own way. This can affect his team cohesion and potentially lead a team that does not work well.

Hall’s context model

Robert is considered to be a person with a low context culture in accordance with the Edward Hall context model. The world Kay listed, which was the organization and his Staff, was not Robert’s concern. In a simple and direct verbal way he introduced his target, which is a modell with a low sense. He had no other choice and didn’t care about the company’s social status, and was free to do what he wanted, because he was ready to take part in the union.