st 21

Century HR Consultants
A workshop on

Negotiation Skills

st 21

Century HR Consultants

Dr. Farooq-e-Azam Cheema

MSc in Human Resource Management and Development, University of Manchester, UK.
PhD in Public Administration, University of Karachi. drcheema99@hotmail.com

I. Why Negotiation?

Negotiation is needed to resolve intra-person or interperson conflicts / disagreements / clash of interests. Negotiation is something that we do all the time and is not only used for business purposes. The aim of negotiation is to explore the situation, and to find a solution that is acceptable to both the sides. Only man negotiates; animals do not; when faced with larger predator, they do not ask for negotiation or justice rather just run away.

Negotiation is one of the most difficult jobs a person can do. It requires not only good business judgment but also a keen understanding of human nature.

Negotiation

Intra-person Negotiation Unplanned Negotiation

Inter-person Negotiation Planned Negotiation

Integrative Negotiation Hard Negotiation Soft Negotiation

Distributive Negotiation Principled Negotiation

Hard Negotiation

Hard negotiation involves the negotiation of positions, rather than interests. It is highly competitive, seeing victory as the number one goal. Hard bargainers, see the participants as adversaries. They distrust the other side and play sneaky games to try to gain the negotiating advantage. Hard bargainers refuse to make concessions and demand one-sided gains as the price of an agreement. When confronted with a softer opponent, hard bargainers almost always will win. When confronted with another hard bargainer, however, it can result in no agreement, both losing.

Soft Negotiation

Soft negotiation also involves the negotiation of positions, rather than interests. However, it treats the participants as friends, seeking agreement at almost any cost, and offering concessions easily in the interests of preserving (or creating) a good relationship with the other side. Soft bargainers trust the other side, and are open and honest about their bottom line. This leaves them vulnerable to hard bargainers who act competitivelyoffering few, if any concessions.

Principled Negotiation

1. 2.

3.

Principled negotiation is the interest-based approach to negotiation. Fundamental principles of principled negotiation are: it separates the people from the problem; focuses on interests, not positions; insists on objective criteria of the solution.

II. Negotiation Styles

Assertive
Win / Lose Win / Win (Collaborating)

Compromise Unassertive

Avoidance Uncooperative

Accommodating Cooperative

Win Lose Style

The win-lose is the most common style of distributive negotiation wherein a person pursues his or her own wishes at the expense of other party. Under this style negotiation is viewed as a game to be won. Losing may be taken as failure, weakness, and a loss of status. When engaged in this style, the parties may use different tactics to win like: persuasion, argument, power, or even threat.

Usefulness

A forceful position during negotiation may be appropriate when the stakes are high and costs of indecision and compromise are non-affordable. It is useful when issues of legality and ethics are at hand. Where you do not expect to deal with people ever again, and you do not need their goodwill. When there is only one prize. At management level, this style is helping when unpopular but necessary decisions must be made. Win-lose is also a style to use when the other party has a tendency to take advantage of you.

Avoiding Style

Avoiding the conflict in certain situations need of no negotiation at all is also a negotiation. People may physically withdraw by simply leaving the scene of conflict or they can refuse to get involved by using silence, or changing the topic of conversation. Psychologically, avoiders can also deny the existence of conflict. During formal negotiation, avoiding style is exercised by paying deaf ear and / or blind eye to the conflicting stimulus.

Usefulness

Useful when: your involvement will only result in negative outcomes for you; issue is insignificant; cost of challenge / cost is quite high; there is little chance of success; relationships are more important to be maintained; to buy time and / or get other party cool down.

Accommodating Style

Accommodating style of negotiation entails giving in to the wishes of the opponent party. Like avoidance, accommodating the other party almost in one-sided way, is also a negotiation. Unlike avoiders, the accommodators enter into negotiation and give in a way that strengthens the relationships. During negotiation, giving in totally / partially may be part of strategic maneuvering.

Usefulness

When other issues are more important that need satisfying others and maintaining cooperation. When social credit is to be built for some latter issue. To minimize loss when one is already losing. When relationships are more important than the interests. Though frequent yielding is not a virtue, a yielding to a fellow in ire, a balanced yielding among spouses, or even the frequent yielding obedience of a child to a parent or teacher is a healthy move.

Compromising Style

Compromising, the most common style of conflict resolution, entails splitting the differences and reaching an acceptable middle ground solution through give-and-take whereby each party should gain something and may have to lose something. Parties under this style of negotiation, generally use techniques like trading, bargaining, smoothing over differences, and voting etc. Most of the negotiations though start with lose-win style, do end up at the compromising style.

Usefulness

It is useful: when two parties have relatively equal power and have mutually exclusive goals; when time is not available to solve problems that are complex and require a great deal of effort to sort out all the issues; to allow for a temporary solution until more time could be devoted to unravel and analyze the complexities; and when competition or collaboration fails to lead to a solution.

Collaborating (Win-Win) Style

Collaborating is based on a willingness to accept other partys needs while asserting your own needs as well. It assumes that there is some reasonable chance that a solution can be found to satisfy both parties in conflict without losing much. Such solution, most of the time, is not possible but a collaborator believes that it is worth trying to find that.

Illustrative Story

Two brothers had an orange. Each of them wanted to have it. Ultimately they resolved the conflict through splitting the orange into two halves, one half for the each. Elder brother ate the pulp and threw the peeling. The younger brother who did not have an innate liking for the oranges and just wanted the peeling as a recipe ingredient, used the peeling and discarded the pulp.

Your Comments
What negotiation style(s) the two brothers adopted to resolve the conflict? Offer your comments over degree of usefulness of the style(s) used in this situation.

Case Study 1

III. Preparing for Negotiation

1. Set your negotiation goals

Take care, your negotiation goals should be insightfully prepared. If there is no harbour to seek, every wind is the right wind. Further realize that the more realistic and reasonable are your goals, the more likely you will reach them. When setting the goals, do not forget one of the most fundamental point in negotiation Leave Yourself Room To Negotiate.

2.

Set alternative goals

Always keep in mind some alternative goals to your main goals. Your alternative goals constitute a fallback position--the deal you are willing to settle for if your original suggestion s turned down. The beauty of preparing alternative goals in advance is that by arming yourself with alternatives, you can hear the word no without losing face.

3.

BATNA (Best Alternative to Negotiated Agreement)

Before you negotiate, you should also consider the options you have if you cannot reach an agreement. These options make up your BATNA- your best alternative to a negotiated agreement. Developing a BATNA in advance of the negotiation will keep you from accepting poor terms-- or turning down terms that you ought to accept.

4. Getting on to Secondary Bases

Once youve determined what you want, what youre willing to settle for, and what you can afford to lose, you have to consider any and all forces that will work in your favor. Any factors that bolster your primary base are called your secondary bases. You should keep these forces in mind as you negotiate--they will boost your confidence and prevent you from setting for an unsatisfactory deal.

5. Doing Your Homework

The more hard facts, statistics, and documentation you have, the more difficult it will be for anyone to turn you down. More complex negotiations will require more elaborate files and documentation. You dont want to rely on memory alone during the heat of the discussion, when you may be under a lot of pressure. Having all the information you need on paper will also free up your attention to focus on what the other person or people are saying---which is where your concentration should be.

6. Get Organized
All the files in the world wont help you if theyre spilling out of your briefcase onto the floor. You cannot afford to break a deep discussion while you fumble for a document or search for an important piece of information. If you arent organized, you will appear less effective and less competent and you could lose your negotiating momentum. All documents relating to each major subject under negotiation should be separated into individual folders and each folder with a large, boldly written title thats easy to read.

7.

Who Else Is on Your Side?

In most of the everyday negotiations, you can successfully and confidently represent yourself. But certain negotiations that carry important financial or legal ramifications (such as buying or selling a home or negotiating a labor issued) require professional help.

8. Psyche Yourself Up For Negotiation

Before you can be successful in any negotiation, you must believe that you can be successful. Once youve settled your position, review the issue from all angles until youre fully convinced of the merits of your case. Your conviction and enthusiasm will be obvious when you negotiate.

Case Study 2

IV. At the Table

Negotiation Strategies Communication Skills

Negotiation Strategies

Ahmad and Hassan decided to purchase an office for their newly started business three months ago. Their first choice was an office located in a new development, and priced Rs. 500, 000 (about Rs. 25,000 above their limit). Ahmad thought they could get the price down through negotiation with the salesman Mr. Sheikh around their limit while Hassan was less optimistic in that regard.

Ahmad conducted some research on the development and learned that several of the offices including the one they liked had been on the market almost a year. Though the house they liked was their first choice, other offices were also quality offices and could be accepted as a second choice. Ahmad met the other salesman, Mr. Agha and learned that the prices of those offices were also within their limit. With this homework done, he made an appointment with Mr. Sheikh and decided to meet him alone.

Approach

Strategy
LOWBALL

Ahmad informed the VINEGAR-HONEY salesman he really liked the office and might be He was going for the sincerely interested at a lowest possible price. lower price such as Rs. 450,000.

Approach

Strategy
PINPOINT THE NEED

The salesperson sounded shocked and said, That is impossible, we would not even consider it. Ahmad anticipated that response, and asked, If you would not accept Rs. 450,000, what will you ask?

It had been established that the seller would take less than the asking price but not Rs. 450,000. The task then was to pinpoint how much less than Rs. 450,000?

Approach
The salesperson did some figuring before he said Rs. 490,000. Ahmad was prepared for this response who tried another strategy saying, Mr. Agha has recently sold two office of similar stature for Rs. 470,000, and several others are available with him. Why would not you do the same for me?

Strategy
CHALLENGE

A strategy designed to put the other party on the defensive in an effort to win some concessions. Added to the Pinpoint, the Need strategy assists in determining what the seller will actually take.

Approach
The salesperson said, That house went cheaper, anyway perhaps I could trim the price to Rs. 485,000 but you will have to pay 20% cash down and the rest within one week. Ahmad guessed the salesman has a room to tread downward and said,

Strategy

Approach

Strategy

Down payment is not the FEINTING problem but I cannot pay This strategy gives the the rest before three impression one thing is weeks. It is impossible, desired whereas primary said the salesman, our objective is really company rules do not something else. permit it. Ahmad replied, But I cannot pay at least this much within this period of time.

Approach

Strategy
Politicians use a variation of this strategy to test receptivity by the public to something they plan to do. This planned action is leaked by a reliable resource to test acceptability before final action is taken.

Approach
I do not think I could make further concession, said the salesman. Ok! Let me consult my business partner since final decision will only be after our mutual consensus, said Ahmad and left the salesmans office.

Strategy
LIMITED AUTHORITY Limited authority is an attempt to postpone the decision on a pretext to get approval from a competent authority. Whereas the real aim is to gain time for reconsideration, and / or keeping the opponent under pressure for a possible negotiation breakage.

Approach
Next day, Ahmad appeared in the salesmans office again along with Hassan, his business partner and reiterated his yesterdays position that they could not pay Rs. 485,000 at least within one week. It seems difficult to give any further concession without consulting the builder, said the salesman.

Strategy

Approach

Strategy

I told you not to approach this agency, you could never conclude any deal with them, growled Hassan and stepped out of the office. You are spoiling almost a concluded deal. I offer Rs. 475,000 though I am not sure my partner will agree to it. A slight budge from your position can bring the deal back on track, murmured Ahmed to the salesman in confiding style.

Approach
By the time you bring your partner back, I call to the builder for his opinion. I think it is possible to reach a deal, said the salesman while dialing a telephone number when Ahmad walked out of his office to trace his estranged business partner.

Strategy
GOOD GUY / BAD GUY

The good guy / bad guy is an internationally used strategy. One member of a team takes a hard line approach while other member is friendly and easy to deal with.

Approach

Strategy
When bad guy steps out for a few minutes, the good guy offers the deal that under the circumstances seems too good to refuse. Bad guys usually comprise spouses, lawyers etc.

Approach
After few minutes Ahmad entered the salesmans office along with Hassan. The builder has not been around, but I have availed my own limit and reduced the price to Rs. 482,000 provided you could give us your offer in writing today with the 20% deposit.

Strategy

Approach
Ahmad sensing they were close to their goal replied, We really do like this office, but it is still more than we want to pay. Please excuse us while we discuss ways in which we might increase our offer. Would you please reevaluate your position too?

Strategy
DEFER
Deferring strategy allows the negotiators time to reevaluate their positions. Deferring a decision to make often proves that patience pays.

Approach
Ahmad and Hassan returned in an hour and offered Rs. 478,000. The salesperson told them, I called the builder while you were away. He gave a little, but Rs. 478,000 just wont do.

Strategy

Approach
However, if you would be willing to split the differences, and make it Rs. 480,000, we can make a deal, providing you sign the paper and put down your 20% cash today. Ahmad and Hassan looked towards each other and accepted with pleasure.

Strategy
SPLIT THE DIFFERENCE

Case Study 3

Communication Skills

Oral Communication Non-verbal Communication

Oral Communication

Phrase the words properly; it delivers.

Two priests were so addicted to smoking that they desperately needed to puff on cigarettes even when they prayed. Both decided to ask their superior for permission to smoke. The first asked if it was okay to smoke while praying? Permission was denied. The second priest asked if he was allowed to pray while he was smoking. His superior found his dedication admirable and immediately granted his request.

Use simple language instead of complex terminology. However use frequent jargons when negotiating with your professional counterpart. Be as descriptive as possible. Avoid generalities.

Listening: a strong negotiation tool!

Perhaps the best strategy to adopt while the other side lets off steam is to listen quietly without responding to their attacks. You often get more through listening by finding out what the other person wants than you do by clever arguments supporting what you need. Standard techniques of good listening are to pay close attention to what is said, to ask the other party to spell out carefully and clearly exactly what they mean, and to request that ideas be repeated if there is any ambiguity or uncertainty.

Non-verbal Communication

Feelings and emotions received from others through their body actions

Symbolic

Vibes

Paralanguage
How something is said instead of what is said i.e. volume, rate and rhythm, silent pauses, sighs etc.

Kinesics
Facial expressions, body gestures, dress etc.

Body Language

What it could mean

Avoiding eye contact

Lack of confidence in bargaining position

Making excessive eye contact

Fiddling with objects such as hair, pencils, or papers

Trying to bully or intimidate

Lack of confidence in bargaining position

Crossing and uncrossing the legs Impatient wants to cut a deal quickly Keeping legs and arms crossed Not receptive to your bargaining position

Be careful, actions speak louder than the words. When we do not know others, there body language remains the first source of building image about them. What people say may be reinforced or contradicted by the non-verbal cues. When there is no congruence between the verbal and non-verbal communication, reliance is placed on the non-verbal aspect that creates a credibility gap on part of the speaker labeled as the non-verbal liar.

Negotiation Tips
1.

Do not underestimate your power. Most people tend to have more power than they think. Your base of power rests on a foundation of more than just competition or financial matters. Commitment, knowledge, risk taking, hard work, and negotiation skills are also real sources of power. Making a systematic analysis of these sources, you can understand your strengths.

2.

Do not assume that the other party knows your weaknesses. Rather assume that they do not. You may be better off than you think.

3.

Dont be intimidated by status. We are so accustomed to showing deference to titles and positions that we carry our attitudes to the negotiating table. It is well to remember that some experts are superficial;
that some people with PhDs quit learning years ago; some people in authority are incompetent; a specialist may be excellent in their field but without skill in other areas; learned people, despite high positions of power, sometimes lack the courage to pursue their convictions or have none.

4.

Dont be intimidated by statistics, precedents, principles, or regulations. Its 2007, some decisions are made on the basis of premises and principles long dead or irrelevant. Be skeptical. Challenge them.

5.

Most negotiation will require some concession making. Dont set your initial demand near your final objective. There is sufficient evidence to conclude that it pays to start high. Dont be shy about asking for more. Many times your demands may be too modest, or too easy to achieve.

6.

It is a mistake to assume you know what the other party wants. It is far more prudent to assume you do not know, and then proceed to discover the realities of the situation by patient testing. If you proceed to negotiate a deal on the basis of your own untested estimates, you are making a serious mistake.

7. Never accept the first offermany people do. There are two good reasons not to:

First, the other party probably is willing to make some additional concessions. Second, if you do accept the first offer, there is a chance the other party will have the feeling that their offer was foolish. They may find ways to spoil the agreement later. In either case, the negotiator who takes the first offer too fast makes a mistake.

8.

Never give a concession without obtaining one in return. Dont give concessions away free or without serious discussion. A concession granted too easily does not contribute to the other partys satisfaction nearly as much as one that they struggle to obtain.

9.

Never fear to negotiation, no matter how great the differences are. Fear can create enormous pressure on you and impact your negotiating success. Remember, negotiation is not a contest. Dont shy away from negotiating just because you are afraid of making a mistake or doing poorly.

10.

Never trust your assumptions. They are likely to be as wrong as right. They are neither right nor wrong until proven so. However, they can defeat you before you even start negotiating through lowering your expectations.

11.

How much you are prepared, something unforeseen always seems to come up in most negotiations. When it doesa time-out is called for. It might just be a caucus with yourself (i.e. Please excuse me I need to use the restroom), or a meeting among your own people to discuss the new issue. Diplomatic negotiations are usually 10 percent conference and 90 percent time-out whereas most business deals reverse this time relationship.

12.

The case for high demands but slow and reluctantly given concessions is a strong one. It helps reduce the other persons aspiration level; It gives you a chance to test the strength of the other person and their willingness to stand firm; It also helps you gather valuable information about the other persons position and feelings.

13.

Our emotions get in the way of effective negotiations regularly. Nothing kills creativity quicker than anger, pride, embarrassment, envy, greed, or other strong negative emotion. Anger is often an expression of fear, or lack of confidence in our ability to get what we think we want. If we can improve our ability to manage our emotions and respond without getting defensive, we have gone a long way toward creative negotiation.

Common mistakes to be avoided

1. 2. 3. 4. 5. 6.

7.
8.

Inadequate Preparation Ignoring the give/get principle Use of intimidating behavior. Impatience. Loss of temper. Talking too much, listening too little, and remaining indifferent to body language. Arguing instead of influencing. Ignoring conflict.