So far, we have attempted to decode the themes "Contracted or Connected?" and "At Will, So Will" through Short Stories, Role Plays and Visual Episodes. These two themes helped to us to get inputs in the conceptual and knowledge part especially on the process of both "intent of offer" as well as "offer".
While discussing the story of IIT, Mumbai, some participants, like Saurabh Pandey (Section B), raised the issue related to "bargaining power" in the individual - organizational relationship context using the terms like "who is at the receiving end?".
Do you think the individual is always at the receiving end and the "bargaining power" is always shifted in favour of employer? If that is the case, go through the following one time "Non-Negotiable Offer" given by Darrel Hair, one of the high profile umpires, to his employer "International Cricket Council" following the ball tampering controversy in the fourth test between Pakistan and England in August 2006.
Your contribution on this interesting episode with reference to the above issues, but not limited to, is welcome!
With Regards,
Ganesh
From: Darrell Hair
Sent: Tuesday 22nd August 2006
To: Doug Cowie
Subject: The way forward
Doug, just to firm up what we discussed earlier this evening. I appreciate the ICC may be put in an untenable position with regards to future appointments and having taken considerable time and advice, I make this one-off, non-negotiable offer.
I am prepared to retire/stand down/relinquish my position on the elite panel to take effect from 31st August 2006 on the following terms:
1 - A one-off payment to compensate the loss of future earnings and retainer payment over the next four years which I believe would have been the best years I have to offer ICC and world umpiring. This payment is to be the sum of [US dollars] 500,000 - details of which must be kept confidential by both parties. This sum to be paid directly into my account by 31st August 2006.
2 - ICC may announce the retirement in any way they wish, but I would prefer a simple 'lifestyle choice' as this was the very reason I moved from
3 - No public comment to be made by me as to possible reasons for the decision.
4 - This offer in no way precludes me taking legal action and/or instigating libel suits against various sections of the electronic and print media for comments made either previously or in the future.
5 - This in no way precludes me taking civil action (and exercising my rights as a resident of the UK in any court of law and by any other avenue open to me) against any organisation or persons currently part of ICC and in particular, members of the Pakistan cricket team and the Pakistan Cricket Board.
I reiterate this is a once only offer and if I fail to obtain your agreement I shall continue to be available under the terms of my current contract till March 31 2008 to fulfil umpiring appointments as and when ICC sees fit in any country at any time in any series or matches involving any affiliated teams.
I would also insist that my ongoing contracted employment continue in its current form until such time as an ICC performance assessment deems me to be no longer able to perform the duties to the high class expected of an international umpire.
Would you please let me know at your earliest convenience of your acceptance or otherwise of this offer.
Sincerely,
Darrell Hair.
7 comments:
Bargaining Power is one of the many factors which determine the salary of the employees. Though the terms of the employment are determined by the employer, however it can be influenced by the following factors:
Perceived value that the prospective employee will bring to the company based on his capabilities.
Supply and demand of the qualified people in the market.
Though the Employer has a major role to play in the making of the employment contract, employee always has the option to negotiate the terms of the contract and leave or join the job depending on the availability of another offer.
Therefore employer ability to effect the terms of the contract is influenced by availability of requisite personnel for the job while that of employee is influenced by the alternative earning option available to him.
I will be in a position to make a non-negotiable offer in the future. This is because it can be made in case I have better employment opportunities, which I believe I will have at some point in my career.
If I receive such a non negotiable offer from my employee I would accept or reject depending on the situation. If he/she is indispensable in the given situation, I would accept the offer. However I believe such situation cannot last for long. In case I have another employee to fill the position I would try to negotiate or else reject the offer.This is because such non negotiable offer would encourage negative behaviour in the company.
Bargaining power is always with the party with the upper hand. Say it the employer or employee, it’s the one in a better position, who most of the times tries to exploit the maximum possible to fulfill best of its interests. So when it comes to individual - organizational relationship, it has moved far from the old traditional belief of Loyalty driven relationship and the thing that is most valued today is getting a stronger foothold so as to be able to exert a greater bargaining power.
I have always believed that I must have full loyalty to my job, rather than to my employer. For me as long as I am in the job and feel it is worth being there, I have my cent percent commitment to it, but that does not necessarily imply that I will not leave it given a better offer. I think the employers also have similar views, they value employees not individuals. As long as I am an employee and performing as per expectations I am valued in the organization. But if my employer finds me not so good or they have better options they will definitely go for the better one.
So I believe I will be able to make similar non-negotiable offer to my employer, may not be in any point of time in my career, but definitely at times when I feel like losing my commitment from the current job and more importantly in a position to do so and I think it is very much fair.
Also given a similar one time non-negotiable offer from my employee, I would behave rationally by analyzing the feasibility of both accepting or not accepting the offer for my organization and whichever benefits me the most I will go for the same.
In this context I remember one real life experience of mine that I would like to share here to demonstrate how mutual bargaining happens in an organization.
I was working with Satyam Computer Services Ltd before joining XIMB and was operating as a SAP consultant. Last year around March I was planning o quit my job and do my MBA and had also managed to get admission in a recognized B School. So I communicated my intent to my Unit HR. At that time I was working in a project for MARS Inc and was the project was running smooth in the first roll out phase. SAP Solution Manager was a very much an emerging tool that time in Indian IT market and it was used in our project. Generally this one is used heavily during the Roll Outs. Satyam had only 12 people in the entire company who were trained in this and luckily I was one among them. So I was somewhat required to stay in that project because finding new resource for the position or again train someone was difficult and costly as certified SAP trainings are very costly. So I was not welcome to quit my job. I had last 7 months of my 28 months service agreement left and for that I was asked to pay a huge amount if I wanted to quit my job which as good as a non negotiable offer. So I could not leave and decided to wait for one more year to go for MBA. Then one week after this happened, I was upset and was talking to my father regarding this. He then assured me to pay the amount and if I wanted to quit job. So I went back to my PM next day and informed that I am paying the bond amount and quitting. Following this I was again called for negotiation and this time I was in a better position to bargain. So after the discussions I was offered a good hike and promotion in the next appraisal, which I found a good deal and accepted.
Anyways, whatever may be the situation bargaining is a general practice in organizations in different sectors and there in nothing very unethical about it, as it is a part of professional relationship.
In such a case in the context of an individual- organisation scenario , part of the bargaining power lies with the ICC because Mr. Hair has never been a poster boy for the Cricket council. In fact , there have been many cases where he had been accused of racism.Thus, legally the ICC may be in a binding position but technically, they cannot be held ransom by Mr.Hair.Since, his contract expires by March 2008, legally it indicates that the Council cannot show him the door and that he is entitled to a monetary compensation.Though, mostly the employers seem to have the upper hand , but here we see that Mr.Hair is also in a comparatively good bargaining position because his contract has not expired and he is still favored by many countries who might treat his exit in a bad manner.
In my career such a non-negotiable offer can only be made in case I have something substantial which the company stands to lose if I quit. I would like to cite an example from the film "The Devil Wears Prada". In this movie the character played by Meryl Streep named "Miranda Priestly " who is the editor-in-chief of the top most fashion magazine,comes to know that the owner of the fashion magazine is about to show her the way out. She has a meeting with him and just gives him a list of top designers who have agreed to go with her whenever she decides to leave the fashion magazine.This kind of bargaining in the individual-organisation context shows how an employee can hold the owner at ransom.The film ends with she being able to keep her job as the editor-in-chief. Thus, such a kind of negotiation is only possible when we have what the organisation loathes to lose.I could also make such an offer when I am sure that my company will not let me go but I would like to leave the company myself.
In case I face such an issue where an employee working under me sends me such a non-negotiable offer then I need to assess what the company stands to lose with the exit of the employee.First of all I would find out whether there is any legal issue which may crop up when i ask the person to leave.A simple clear cut talk with the employee would be the next step.Then depending upon the situation, I would either accept or reject the offer.In case , the timing is crucial then negotiating would be the best way.But,giving in to the demands may also have a negative effect as other employees might also take such a step in the future.
The crisis in Indian hockey which was resolved yesterday also shows the bargaining power of the employees, in this case the Indian Hockey Players. The 22 players demanded their dues of Rs. 4.5 lakh each apart from a graded contract system; else they threatened to boycott the forthcoming World Cup. This clearly shows the bargaining power held by top Hockey Players of India.
However, Hockey India’s president AK Mattoo said the Players are not paid employees of ‘Hockey India’ and offered them Rs 25,000 each which he said is what they could afford then. So, Hockey India also refused to budge from its position. Hence, in this case, the employer (Hockey India) had an equal bargaining power and hence the stand-off. Here, the employer also has the bargaining power because the Players have nowhere else to go. This is not the case with employees who have option to join other companies.
Hence, the bargaining power of a party increases with the increase in the number of options it has, or with the decrease in the number of options the opposite party has.
The bargaining power is the concept which is decided by the demand and supply of the capabilities and position whether it is of individual or of on organisation.Along with many other factors like the perceived value of individual, employmer reputation with respect to its competitors, the market conditions has a very important role in deciding the bargaining power. We all are well familiar with what happened during the recession last year. Unemployment rate increased drastically and so the bargaining power of individuals decreased. Same is the case with IIT bomaby story, in my opinion the institute was at the receiving end in that case because of the market scenario.
In future if I am in similar position what I will do will depend on the market conditions, my own capabilities, my experience and achievements in that industry. It also depends on what are the other options which I have got. But in my opinion for a healthy relation between an individual and an organisation there should be some power in the hands of both.
The bargaining power is such a necessary evil. It is necessary as in our job it is used everywhere and every time. It may be the appraisal where we bargain for a better ranking for a salary hike. It may be with the HR for visa initiation or role change. May be it is with the client for the billing rates. The bargaining power has become a part and parcel of our day to day job. These things may not get highlighted as the relationship between an individual and the organization still continues. But when it comes to non negotiable offer definitely the employer is at the upper hand. Because individuals come and go but organizations continue to thrive.
If we revisit the Darrel Hair controversy, the non negotiable offer made by him was a result of coercion from ICC. The mail that he wrote to ICC was supposed to be confidential, but it was disclosed. So competing against the organization is never ever possible.
We can take the recent case of Infosys Technologies Ltd. In January 2009 it fired around 700 employees. The offer made by the software bellwether was that you resign and get retrial benefits or you will be terminated on basis of performance without any significant reimbursement. None of the 700 employees had a choice.
Yes definitely I will be able to make a non negotiable offer to my employer depending upon the job market. But again it totally in its hand as it won’t be much affected by one person leaving or joining an organization. If I receive a similar non negotiable offer then there is no point in rejecting this as the employer would have taken all the remedial measures if I suppose I reject it. So in my opinion the best possible way would be to accept the offer.
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