Negotiations in Employee Relations

Negotiations are not easy exercises in employee relations. There are very few good negotiators, and even fewer persons enjoy negotiations. Perhaps I should issue a correction: fewer men enjoy negotiations. Women are not only better than men, that is my experience and conclusion, but women also seem to enjoy negotiations!

As a school boy, I had watched a negotiation with interest, and amusement. A man who came to my cousin’s home carried a bundle of sarees. He was carrying sarees procured from Kolkata. Fifty years ago, Bengali sarees were not easily available in Mumbai. The salesman, in his forties, had obviously sold earlier a few sarees to my cousin’s wife [let us call her ‘A’], so they were not strangers to each other.

As he entered the house – in a chawl in Mumbai the doors are always open – ‘A’ gave him a smile but said firmly that she had no intention to buy a saree. The salesman sat down on the floor and requested for a glass of water – a simple trick to evoke sympathy. As he started opening his bundle, ‘A’ repeated her words with greater resolve. The salesman ignored it and said that he understood that she would not be interested in buying, yet urged her to take a dekko at the new stock of Bengali sarees, and that it was okay if she did not buy a saree. Final result? You guessed it right: ‘A’ bought two sarees and got some discount too.

Negotiations in Employee Relations are Different in Character
The parties engaged in the negotiation with extreme positions. We see such negotiations every day. And then we tend to adopt the same style in the employee relations arena. I have watched unions demanding wage increase exceeding Rs. 10000 in the era in which their wages were Rs 4000 pm. And the negotiators in the Management team on the other extreme offered Rs 100 pm as wage increase.

A saree salesman can walk away if he does not get the price or the lady can refuse to buy at the price offered, but the negotiations between management and union are different in character. While negotiating with a union we have to appreciate that the employer and employee are bound by an employment contract – they can’t do without each other. It is more like a ‘negotiation’ between husband and wife, or two relatives, who must place greater value relationship than resolving dispute their way.

Use 5 Ws and H, Develop Answers Jointly
It is precisely for this reason that the two sides will do well to agree on the process of negotiations. My way of thinking about it is to use the five Ws and one H model. Why, When, Where, What, Who and How. How about setting the ground rules developing answers jointly to these 5Ws and one H?

A lot of clarity comes when we think of WHY we are getting in this negotiation – what is the goal, what is it that we wish to achieve through the negotiation. Setting a deadline for concluding the negotiation helps. The most critical, however, is HOW to negotiate. Nowhere this point is more incisively thought and effectively deployed than the ASAL Union. [Automotive Stampings & Assemblies Ltd.] I have blogged about their strategy earlier too. To put it concisely, ASAL union told the management that they would earn their wage increase by suo moto proposing and increasing productivity. It worked! Mind you ASAL had huge accumulated losses and yet they could afford a reasonable wage rise. The union had done its homework on ‘Why’ and ‘How’ so well.

We are presuming here that the union is led by a mature leader or set of representatives. And yes, of course, that the management is led by a mature leader too! In practice however this ideal condition rarely exists. We see political leaders, uneducated, short sighted local men in power leading the union. And a set of managers who think that the only way to reach agreement is through gratifications to the leader of the union.

Nobody can wish away those inept leaders on both the sides of the table, but ask those who have handled tough negotiations, it is possible to change the situation.

Building Relationship Is Not Same as Influencing
The first step is to believe that building relationship is a full time job. Building relationship is different from ‘influencing’ employees. The former is continuous, the latter is occasional. Those who build relationship recognise that it is done 24 by 7, and through role modelling, not through lecturing and training in interpersonal relationship. They also realise that trusting plays a huge role in developing relationship.

Hope or Fear
In a training program I asked employees how long they took to add their wife’s name, after their marriage, as a joint holder to the bank account. There was an uncomfortable silence. Nobody will admit, but it is often seen, that in an arranged marriage, there are many who ‘watch’ wife for a good time before adding her as a joint holder. They effectively keep their wife on ‘probation period.’

When men begin intimate relationship from the position of fear and suspicion, you can guess how they would be acting in developing any relationship. The first lesson is that we must come in any relationship, whether it is with life partner or with union, from the position of hope and trust not from fear and suspicion.

Upward Communication is More Important than Downward Communication
We see that all organisations begin an exercise of communicating business scenario and its dictates to employees when negotiations are on the anvil. It is always accepted with a pinch of salt. In any negotiation the critical factor is not whether you are understood by the other party. The critical factor is whether you have made efforts to understand the other party. That is the fifth habit of Steven Covey’s famous book – ‘Seek first to understand and then to be understood.’

When managers lecture on business imperatives they disregard this rule. Moreover, the simplistic belief is that ‘if I present my case well, and they understand it then the negotiations will be very easy.’ Hidden under this well-meaning approach is the belief in being in ‘control.’ It rarely works that way.

What matters is the upward communication. This is exactly where Covey comes in. Any book on influencing tells the same principle albeit in different words. If I feel that I am understood, my circumstances and context is understood, I lay myself open for being influenced too.

The book ‘The Humble Inquiry’ by Edgar Schein explains this well, and gives us techniques for practising it. There is no substitute for empathetic listening in building relationships and also in negotiating.

The Essence
Recognising that some relationships, like those with employees, are long term relations is the first key point. Such relationships differ in character from the relationship between a salesman and buyer. Second key point is to recognise that employees copy the leadership style of their bosses or leaders in the organisation, so being a role model is a great influencer. Third key point is that we must build relationship with employees and their union from a position of trust and hope, and not from a position of suspicion and fear. And lastly, listening is more important than downward communication.

People think that relationships are built by people so they use birthdays other events to develop a personal bond. There is nothing wrong about this, but placing sole emphasis on such tricks does not work. Employees look for systems and processes which could be established for regular dialogue and upward communication. They find greater worth in it.

And finally….

All this requires a single quality in men which is not found in abundance. Let me quote Osho:

“When everything is going smoothly and beautifully, you can trust. But you are trusting somebody else: God, God’s only begotten son, any messenger of God, a prophet, a tirthankara or a Gautam Buddha. It does not matter. You are trusting somebody else and things can go wrong any moment. The basic trust has not to be in existence, it has to be within you….
You should learn to become more conscious and alert to trust yourself. Do you trust yourself?”

So everything I wrote about can be practised – if you trust yourself.

Vivek S Patwardhan