Negotiation

Negotiate effectively

To get the outcomes you want, master two negotiation scenarios

Your approach in the negotiating process depends on which scenario you choose.

A SUCCESSFUL career is often defined by how effective a negotiator you are. In all aspects of your career you are, in fact, constantly engaged in the process of negotiation.

   The job interview - where your career usually begins - essentially involves negotiating with the prospective employer for the job and equitable remuneration. From there, you continue negotiating every day and at every stage of your career with bosses, co-workers, subordinates and customers over a multitude of issues.

   Learning to effectively negotiate is thus important for managing and maintaining a successful career. However, many people often negotiate without a good understanding of the process or without the necessary basic skills to carry it out successfully.

   Being clear about your goals and preparing well are fundamental to negotiation success and to achieving the outcome you seek. This essentially means gaining a good understanding of the approaches needed for the different types of negotiation scenarios, the phases involved in the process and developing the necessary skills for successful negotiating.

   There are basically two major types of negotiation scenarios with each type requiring a different approach.

Integrative negotiation

This type of negotiation involves a problem-solving strategy through sharing of information and giving way on less important issues. In essence, all parties involved are collaborating for mutual gains and emphasising win-win solutions.

   Thus, spending time and effort to build trust and cooperation from the outset is fundamental in integrative negotiation. An example of integrative negotiation is in the allocation of duties and responsibilities in team building situations where everyone involved is ultimately working towards a common goal and team effectiveness.

Distributive negotiation

Here, a competitive negotiation strategy is needed with each party striving to get the biggest slice possible from a fixed pie. The approach is thus to build the strongest bargaining position by attempting to understand the other party's strengths and weaknesses without revealing vital information and knowledge.

   Examples of distributive negotiation can occur in organisational settings when there is aggressive bargaining for bonuses from a fixed budget or stiff competition for promotion when only limited posts are available.

   However, irrespective of the type of negotiation scenario the process itself always involves three phases. Each phase is important if the negotiation is to be concluded successfully:

1. PREPARATION

This is the first phase of any negotiation process and needs to be managed well if subsequent phases are to proceed meaningfully. This phase allows the bargaining positions of the parties involved to be established and, depending on the situation, determines how much and what type of information is gathered and shared.

   Good preparation is essential as it is important to enter this stage with a clarity about the goals to be achieved. Identifying the real issues to be negotiated and putting aside all irrelevant matters that could hinder the negotiation process are important aspects of this phase.

   The more prepared you are at this stage the greater will be your bargaining position and participation in the process. For example, prior to a job interview you will need to prepare yourself with sufficient knowledge of the job and the organisation as well as have clarity of the strengths you will bring to the job to ensure that you have a good bargaining position.

2. BARGAINING

The second phase of actual negotiating only begins after the bargaining positions are clearly established. It is also essential that all parties remain focused only on the issues and goals that were established in the first phase to allow demands to remain manageable and reasonable and prevent breakdown of the negotiation.

   Understanding the way issues are negotiated and developing certain essential skills of effective negotiating are important at this stage.

   Effective speaking, active listening, self-confidence, assertiveness and emotional intelligence are among the key skills necessary for successful negotiating.

3. CLOSURE

The final phase is necessary is to formalise all that was achieved in the previous phases so that there is no need for further negotiations over the same issues.

   It is important at this stage to ensure that all negotiated agreements are clearly understood, finalised and well documented. In addition, the benefits gained by all parties involved should be emphasised.

   It is crucial at this stage to ensure that efforts are made to restore any working relationships that may have been negatively affected in the negotiation process.

I never considered a job interview as something I could negotiate. It's either I get this job and be paid poorly or die homeless on the streets. What is my competitive edge if college is too expensive and I am mentally ill according to my local clergy-man?

Haggling 101: Six ways to get a fab deal

New York - Mr Jeff Yeager likes to haggle. The Washington, DC, author is something of a virtuoso at this lost art, with a deep playlist of tactics that he estimates saves him 10 per cent to 15 per cent a year on his spending.

   "I try to negotiate on all sorts of things every day," he says. "And the vast majority of the time, it's a very positive interaction."

   Mr Yeager, author of the recently published How To Retire The Cheapskate Way, is a bit of renegade.

   So how do negotiation ninjas like him get past this cultural norm - the idea that prices are set in stone - and secure fabulous deals?

   We talked to a few experts and got these pointers:


1. Have an escalation script handy

When negotiating, there's nothing wrong with having a playbook. In his book I Will Teach You To Be Rich, personal finance expert Ramit Sethi supplies scripts for dealing with representatives from banks, telecom providers or credit card companies.

   "If you're asking about an overdraft fee and they won't waive it, just go to the escalation script," says Mr Sethi. "You could say something like, 'Boy, I've been a customer since 2006, and I'd hate to leave because of a US$20 fee.' Right there, you have a 70 per cent chance of getting it waived."


2. Know who has the power

There's no point in trying to negotiate with someone who doesn't have the authority to cut you a deal. That's why a traditional bargaining tactic is to go higher up the corporate food chain, to a supervisor or manager, when seeking a discount.


3. Get the timing right

Take a moment to think about when you're trying to strike a bargain. Is it on a Monday, when people are generally crabby and customer service representatives have no real incentive to wrap things up? Or is it at the end of the week, when they're trying to clear everything off their desks?

   The same principle applies to the time of month. Is it at the beginning, when sales people still have plenty of time to meet their quotas? Or at the end, when they need to make deals to impress the boss?


4. Do your due diligence

Asking for a deal is all well and good. But if you have some ammunition to back you up, even better. That's because "80 per cent of the work is done before you even step in the room", says Mr Sethi. That can come in handy when asking for a raise. Researching average salaries for your position can be done with a few mouse clicks at various websites.


5. Buy seasonally

Mr Yeager once got US$1,100 worth of perennial plants for US$11. That's right, US$11.

   "Fall is a terrific time to get a deal like that because the nurseries are closing up to make room for pumpkins," he says.

   Same goes with other merchandise. New car models starting to arrive on the lot? Dealers don't want last year's leftovers taking up valuable space. Appliance floor model been hanging around the showroom too long? Time to swoop in for a deal.


6. Be ready to walk away

If you absolutely have to buy something, the vendor retains all the negotiating leverage. If you don't, then you have the power.

Reuters