Negotiation between USBU and the companys management Case Study

Negotiation between USBU and the companys management - Case Study Example As an example of a successful negotiated compromise was the agreement reached on superannuation. The management team had set a goal of 3%. The Union had demanded 15%. While this gap seems extremely wide and would appear to be irreconcilable, part of the reason was due to management’s overly aggressive goal. Management wished to leave the superannuation at the existing level of 3%. This was probably unrealistically low when confronted by the Union’s demand of a level 5 times that amount. However, management had had the foresight to set a more realistic acceptance level of 9%. This was the agreement that was eventually reached. Offering 4% and accepting no more than 8% may have better served management. The initial offer of 4% would have been viewed as an increase instead of the maintenance of the old rate, and the Union might have been more willing to negotiate towards that level rather than insisting on negotiating towards their 15%. The issue of wages was another source of contention as the Union asked for an unreasonable 15% plus increases linked to the consumer price index (CPI). This was later reduced, but it became generally accepted that it was a key Union demand. This excessive demand was not helpful when management was only offering 1%. The final agreement was for 1.5%, which was considerably higher than managements offer. However, management had expressed no limit on wages or bonuses. ... However, management had expressed no limit on wages or bonuses. This was further exemplified by the Union's demand of a 12% bonus as contrasted to management's offer of 5%. Management was coerced to reach an agreement of this point and had set no acceptance level. The negotiated bonus was 12%, exactly what the Union had demanded. This level may have been reduced if management had set a ceiling and negotiated some of the other soft points in the contract that did not impact the bottom line. The problem was that the priorities were all set with similar importance, which left this priority ill defined. In other areas management totally acceded to the Union's demands. The issue of hiring and staffing was agreed to on the Union's original terms. The goal of management to retain discretion in the hiring of new employees was given up. Management also gave up their ground on the issue of training. Management's original goal of utilizing an outside third party consultant to reach an agreement on how best to implement the training requirements and program was discarded and the Union was able to get nearly all of its original demands. These were issues that the management team could have been more adamant about holding their ground and using the issue to get a more favourable agreement on the more important issues of wages and bonuses. In retrospect, the management team could have been better prepared by setting acceptance levels that could have been agreed upon on wages and bonuses. Failing to have a goal resulted in giving into the Union's demands. In addition, the management team could have made a more realistic offer in the areas of wages, superannuation, hiring, and training. By only offering the pre-existing policies the Union perceived the process as