Justification Report

In this justification report, negotiations outcomes between Management and Union Representatives of Auto Suppliers UK Ltd (ASUL) will be discussed. The report will mainly focus on the critical evaluation of the preparation and conducting of the negotiation. The negotiation was conducted on the 18th of November 2015 after several attempt to come to an agreement but with no avail and with the Trade union threatening to go on strike. The skilled worker in ASUL demanded a 48 pence pay rise increase per hour and a decrease in working hours from 38 hours to 36 hours. The full time official and the shop steward were representing the skilled workers interest, while we the Human Resources Manager and the General Manager represented the organisation.

During the negotiating preparation, our main objective was to maintain good relationship with employees and avoid strikes. We made clear to the trade union the objectives and agreed that we were aligned with the trade union’s interests. This encouraged a collaborative approach and the certainty of an interest based approach which promoted trust between both sides (Lewicki and Liam 2007).  In Beersma and De Dreu (1999) study, it was found that people who seek good outcomes for themselves and others were able to reach more integrative negotiation agreements.

Also, it was ensured that the dispute in question was understood, which meant not only obtaining the facts surrounding the dispute, but also attempting to find out as much as possible about the trade unions negotiating interests. It was assumed the trade union would have three proposals for working hours which would start from 0.44 pence per hour to 0.36 pence per hour then 0.29 pence per hour. For this reason, three proposals were made which would start from 0.07 pence per hour to 0.14 pence per hour then 0.22 pence per hour with the latter being our Zone of Possible Agreement(ZOPA). Employing ZOPA gave one the possibility of coming into a mutual agreement with the trade union without going beyond ones settlement range. For instance, Burner (1992) found that when ZOPA does not exist the buyer tend to give away more value beyond its reservation. However, it can be argued that trying to develop ZOPA is a difficult task given that the trade union proposal that was developed, was based on assumption.

During the negotiation, we tried to make the negotiation agreement a win-win by providing options for that would benefit the employees. For example, while negotiating the 0.22 pence per hour increase in wages, the provision of training on the technology the company has invested in and an increase of salary in six months was proposed in order to encourage the trade union to accept the offer that was within ones ZOPA. Craver (2007) posited that by offering the implementation of beneficial options, it may help compensate for negotiating a slightly lower salary. By providing the training for employees they are able to build up their skills and gain more confidence in their work which in turns benefits the organisation productivity.