Internal negotiations can include:

  • Resource allocation discussions
  • Project management and implementation
  • Labor relations
  • Influencing and persuading
  • Recruitment and promotion
  • Etc.

The problem starts with the structure of most corporate firms.  Decisions tend to follow a pyramid like hierarchy, even in flat or modular organizations.  As a result, disputes and conflicts are escalated for resolution.  The two sides submit their conflicting views and recommendations for consideration.  The decision maker chooses.  One side wins, and one side loses.  At the risk of over-simplifying the problem, this process creates win-lose outcomes when clearly win-win is appropriate given the circumstance.  (see Wheel of Negotiation)

Change the Decision Process

In order to avoid a win-lose outcome, the first step is to begin treating the discussion as a negotiation.  Instead of relying on delegated authorities to solve the conflict or issue, agree with the parties involved to reach a consensus as a group.  Leave escalation as a means for resolving deadlock or last resort.  If deadlock occurs, a “last best offer” style for the decision can be very effective at minimizing the lose factor.  In treating the issue as a negotiation a formal process needs to be followed to maximize the potential result. (Details below)

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Salary negotiations are a bit of an enigma.  They have all of the elements of a Hard Bargaining situation:

  1. Limited variables
  2. Price is the main focal point (Salary)
  3. There are usually multiple applicants vying for the same position

Yet a salary negotiation also consists of elements of a High Dependency situation:

  1. Focus is on long-term gain and results
  2. Both parties are dependent upon each other
  3. Trust and relationship play a critical role in the negotiation

There is no ONE way to negotiate a salary; each situation will vary depending upon the circumstance surrounding the negotiation.  I’m going to first look at a situation where the applicant is a new hire from outside the company.   Step one is to determine how much leverage you have in the negotiation.  To assess your leverage you’ll need answers to the following questions:

  1. How many other qualified applicants are in the final stages
  2. What are your alternatives to this position
  3. What is your breakpoint
  4. What is their breakpoint (you’ll have to guess unless you are able to question effectively to unlock this information)

If there aren’t any other applicants and you have multiple options, you have quite a bit of leverage and can effectively set the bar very high.   (more…)