Getting to Yes, Chapter 5 – Insist on Using Objective Criteria

(Chapters 1-4 are summarized in previous blog posts)

As much as we all want principled negotiations based on interests and issues, and without taking hard-line positions, we will inevitably come to a point where our interests differ and cannot be reconciled through interest-based practices.  This is especially true with economic issues like wage increases. 

In collective bargaining, the company has an interest in cost containment.  The union has an interest in higher wages and better benefits.  It will always be that way, and the interests collide and threaten every collective bargaining session at some point.

It often comes down to a battle of wills – with predictable consequences of anger, frustration, stalemate and damaged relationships.  It becomes who can hold out the longest and has the most leverage.  Compromises are often reached with a new CBA, but often with lasting resentment and distrust.  Occasionally, the process ends in a strike lock-out. 

The authors suggest that we solve this problem by jointly agreeing, in advance of substantive negotiations, on objective standards to rely upon and processes for avoiding stalemates in advance of substantive contract negotiations. 

This requires principled negotiations focusing on principles of fairness and merit, and not upon “zero-sum” wins and losses.

In plain words, it’s not about “I want the highest wage I can get,” versus “I want to pay you as little as I can get away with.”  It’s about, “Let’s get to a fair wage together with agreed-upon criteria and processes.”

The authors write, “Carrying on a principled negotiation involves two questions:  How do you develop objective criteria, and how do you use them in negotiating?”

Objective criteria for wage determination should be jointly developed before negotiations begin.  They will likely include data like current wages, wages in other relevant companies, negotiating history, company performance, company hiring and retention data, projected industry and company performance, and total employee compensation. 

Fair procedures could involve any arrangements that could lead to a fair and efficient agreement.

At a recent client training session, the parties had agreed to a “baseball arbitration” process should they be unable to agree on wage rates.  The authors describe baseball’s process as “last-best-offer arbitration,” where a neutral arbitrator must choose between the last offer made by each side.  “The theory is that this procedure puts pressure on the parties to make their proposals more reasonable,” argue the authors.  Knowing a patently unreasonable offer will be tossed out by the arbitrator, both management and the union must make well-reasoned offers.

The National Labor Relations Act (NLRA) requires that parties to collective bargaining come to the table with open minds and as equals.  Principled negotiation incorporates these requirements of equality and open-mindedness as constant reminders for us to avoid stubbornness and positional behaviors.

There is a huge difference between seeking agreement on appropriate criteria and principles for deciding a matter and instead using your own criteria and principles to argue for your position.  The latter leads us right back to inefficient and harmful positional bargaining, with pressure applied to reach results.

In principled negotiation, the parties never yield to pressure.  Pressure in collective bargaining takes many forms.  It often includes strike or lock-out threats, or stone-walling and stalling to induce fatigue and concessions.  Participants in principled bargaining must remain adherent to their principles only and not to pressure. 

The parties must stay true to their agreed-upon principles, their mutual goals for fairness and efficiency, and the processes they jointly create to reach agreement if their quest for a fair agreement fails.

In my experience, none of this is easy.  Those of us with long experience in labor relations on either the management or union side of the table are accustomed to swapping proposals and duking it out, piling on arguments to persuade the other side that they are wrong.  We advance and retreat, gain and concede, and usually reach agreements that are at least acceptable.

There are better ways to negotiate, and that’s why Getting To Yes and its progeny by Harvard’s professorial authors are well worth reading and applying to our work.

Watch for the Chapter 6 summary at a later date.  Please read the book!  This summary is intended to whet your interest – the meat and potatoes are in the book. 

MARC has resources to fit any of your labor relations needs.  Please reach out to Gary Kleckner MARC Inc Vice President: 216-973-7323 to see how we can be of service!