Managing Status in a Negotiation, Part III
When a reference benchmark is not determined and agreed upon in advance, there is a high probability of conflict and deadlock. Each side is tempted to compare itself to a standard that favors its position. Frequently, a clear criterion is not apparent. In such situations, it is even more critical to work with the other side to determine the appropriate benchmark or standard to improve chances of a mutually acceptable agreement.
In a service representatives’ contract negotiations, when it came to choosing companies for comparisons, union representatives selected organizations with higher average salaries relative to firms selected by the management. This discrepancy significantly increased the likelihood of a strike. However, the parties were able to reach a negotiated agreement, because pre-determined and mutually agreed upon arbitrators would have otherwise made the final decisions for them. The management and the union were aware of the methodology that the arbitrators were likely to use – namely, comparisons with other service organizations in the same area.
Because they understood the rules the arbitrators would apply in the event of an impasse, the negotiators factored these variables into their strategy rather than choosing comparison groups on their own
Satish Mehta
