Page 221 - DMGT519_Conflict Management and Negotiation Skills

Unit 10: Integrative Bargaining

away from the table over the last issue. Why? First, they have reached agreement on several Notes
important issues—a settlement that will be lost if they walk away. Second, the integrative
process has established a positive bargaining climate that is more conducive to resolving the
last issue. And third, both parties have invested time and effort into the negotiation and therefore
are more motivated to reach a final settlement.
Returning to the Chapter Case, “Labor Contract Negotiations,” let’s apply the five steps of
integrative bargaining just presented. In their second meeting, the union and management
negotiators “lay on the table” or openly discuss each issue they would like to negotiate, and
explain their interests or position on each. Management explains that it is seeking a five-year
contract that would enable it to enter into longer-term contracts with buyers, which they have
requested more often over the past several months. Management would also prefer a drug-
testing program in cases involving accidents or injuries to protect the interests of employees,
the owners, and customers.

In exchange for any wage increase, management also wants workers in the bargaining unit to
pay a greater portion of their health insurance, the cost of which has risen sharply since the last
contract negotiation. Finally, management presents a proposal that would allow it to subcontract
work to outside firms under certain conditions. Next the union negotiators present several
economic items that they believe are needed to increase the total value of the contract until it is
closer to other contracts in the region. Those items include a wage increase of 5%, the initiation
of a profit-sharing plan to include 12% of net profits annually, an increase in the pension benefit
formula, three days of paid funeral leave annually, a monthly clothing allowance, and an increase
in the current shift differential provision. In addition, the union leaders present three noneconomic
job security issues of importance to their members: a no-layoff provision, voluntary overtime
assignment based on seniority, and a no-lockout provision. In their next meeting (the third step)
the negotiators review the common list of items developed in the previous meeting and agree
that they have compatible interests on three of the issues. Both sides desire the security of a long-
term contract, and thus agree to a five-year term for the new contract. Both also agree that a new
drug-testing policy is needed, and that testing should be conducted only in cases involving
accidents or injuries. Finally, both agree that disruptions over contract disputes—which can be
settled through the grievance arbitration process provided in the contract—are harmful to all
parties involved, and thus should be prevented through a no-strike/no-lockout provision (see
Table 10.2). With issues left on the table, the two sides begin looking for items they can exchange
(the fourth step). In general, the exchange process involves one side receiving its desired position
on one issue by giving the other party its position on another issue. In the first exchange, both
sides agree to the union’s proposal on job security—a no-layoff clause—in exchange for
management’s proposal on subcontracting, which allows up to 20% of the bargaining unit jobs
to be subcontracted to outside firms for economic reasons. Next, they exchange two economic
issues of approximately equal value—first, the union’s pension increase proposal of 2% for
future retirees in exchange for management’s shift differential proposal (no change); and second,
the union’s new clothing allowance proposal ($50 per month) in exchange for management’s
funeral leave proposal, which combines funeral leave with personal leave and reduces the total
number of days per year by two. Then, after several proposals are exchanged on the remaining
issues, management’s profit-sharing proposal, which changes the current program to 10% of net
profits, is exchanged for the union’s proposal that overtime be voluntary and assigned based on
seniority. After these four trades of issues, only two issues remain on the table—wages and
health care.
The negotiators on both sides at this point are feeling a sense of accomplishment because 11 of
the 13 issues have been resolved. However, they also recognize that the two remaining issues
are critical ones that both sides at the start had listed as top priorities, and which are high-value
items, zero-sum economic issues. Thus they begin a distributive bargaining process on each
item independently. Eventually, by making counterproposals with concessions, a settlement

LOVELY PROFESSIONAL UNIVERSITY 215