Page 199 - DMGT519_Conflict Management and Negotiation Skills

Unit 9: Distributive Bargaining

often call the “50-50” or “split-the-difference” (which certainly sounds fair since both sides gain Notes
an equal amount, but is really fair only if the initial offers were equally fair to both parties,
which is highly unlikely); (2) the equity norm, or a split based on the proportional input of the
parties; (3) the need norm, which can be a powerful social norm; and (4) the norm of maintaining
the status quo, which keeps all significant issues in their current state. Box 9.2 provides an
example of how the fairness norm works.
To illustrate the first three of these fairness norms, consider three adult children who must
decide how to divide the estate of their parents. Only three items of value remain. The most
valuable of these is a new Mercedes-Benz; the other two items are a set of dining room furniture
and a kitchen table and chairs. One child proposes they sell the items and split the proceeds, thus
utilizing the equality norm. A second child notes that she provided the majority of the care for the
parents over the last several months, and thus she believes she has earned the Mercedes. She is
utilizing the equity norm. The third child explains how her car has more than 200,000 miles and
is constantly in the shop, and therefore she could really use a new car. Therefore she is utilizing
the need norm.

A fourth fairness norm employed by some negotiators and arbitrators is maintaining the status
quo. Many labor contracts, for example, leave most current provisions unchanged, although a
few key ones are negotiated. It’s not always assumed that the status quo is fair, but if things were
accepted and used once, then they may work again. And sometimes it’s easier not to change
something than to try to reach an agreement on a new proposal.
In the employer–employee relationship, what is commonly termed the equity principle is actually
just the fairness norm—in this case, the equity norm variation— at work. The equity norm is
based on the work of J. Stacey Adams, who found that employees compare the ratio of their own
organizational outcomes/inputs to the perceived ratios of other employees’ outcomes/inputs—
where outcomes include pay, recognition, bonuses, and so forth, and inputs include factors such as
work effort, hours, and ideas. If employees perceive the ratios to be roughly equal, then they
experience job satisfaction. However, if they perceive the ratios to be unequal, then they feel
unfairly treated by the employer and will usually attempt to balance the ratios by seeking an
increase in the outcomes received or, more likely, reducing their inputs or work effort, or even
looking for another job. Thus the employee equity norm is quite similar to the fairness norm in
a negotiation situation, except that the other party is the employer. Both are generally based on
one of the cornerstones of Western culture—fair treatment. Religious, political, and labor
organizations have often worked hard to achieve equity or fairness in our society. Issues such as
gay marriage or discrimination based on race, religion, or age are often framed in terms of
fairness or equity. It is important to note that the common use of fairness norms in negotiations
should not be confused with what is the “right,” “best,” or “fairest” solution. A fairness norm or
any other norm is simply an external standard that people employ to guide them in negotiations.
However it may provide a very convincing argument in support of a proposal. Using norms or
standards does not provide negotiators with a means of reaching the “fairest” outcome. Why?
Reasonable people can use different norms and facts to reach different solutions. However
utilizing norms or standards can assist negotiators in their efforts to reach an agreement in at
least three ways:
1. Making decisions based on a norm such as fairness is easier than making decisions on
offers that are randomly tossed out.
2. An offer based on a norm is more persuasive than an arbitrary number, and thus more
likely to receive serious consideration.
3. It is easier to agree to the other party’s offer if it is based on a norm, because you are
agreeing to a principle, not a pressure tactic. For example, would you find it easier to
agree to “That is my final offer—it’s what I want, and I don’t have to explain it!” or “I can’t

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