Power Tactics - Bargain your Way !!

Bargaining Power and Individual-Organization Relationship

Based on my experience with an IT company for over 3.5 years I sincerely believe that "bargaining power" is never limited to just one party and keeps on shifting between Employer and the Employee. The reason for this tilt of power balance can be multiple like:

1) The situation of the job market - In recessionary times employer has the "power (driven by need)" to go for salary cuts. deferring joining dates, deferring promotions, layoffs etc. In boom time it is the employee who is able to exercise higher demands from its employer based on his/her market standing and other offers employee may hold.

2) Skillset and Dependency level of the individual in his/her current job - Higher the task dependency on an individual or less availability of skills he/she possess for the job inside and outside the organization, more is the ability of employee to demand better incentives and offers in exchange of work. On the other hand, Organizations always prefer to have more than one person to know about the job and through Knowledge transfer, Shadowing and Training sessions they attempt to create sufficient backup for a key resource.

However another important area is that of "External Support and Pressures".

3) A good rapport with the client that an employee serves can also serve as a significant source of "power" that an employee has over his/her employer. Further, media and government pressures can also limit the power of employer in taking measures like ending employment agreement with the employees.

In an individual-organizational relationship the "bargaining power" comes from how the above-mentioned factors work out in favor of either of the parties. It is not wrong for employee to be opportunistic and demand higher incentives or better offers when conditions favor him and that's exactly what happens in the organizations. This corresponds perfectly with a saying that "Make Hay while the Sun Shines"

In my viewpoint, although an employee may be able to make a non-negotiating offer in short run based on favorable conditions for him/her, in the long run it is the organization or the employer who would always be able to neutralize and also command the situation through use of multiple tools like performance management systems, creating backups etc. Not to forget, character certificate and background checks are also a source of power that employer possesses in his power game against the employee. A new employer is very likely to refer to old employer of the candidate for inputs on his performance. In such cases, if the employee leaves the organization by offering a non-negotiating offer which gets rejected by employer, there are chances that employer notes down such activities in employee records maintained at their end and which reflect poorly on his/her attitude.

As from all professional experience that I have and rightly pointed out by Sudip Ghosh in his post, I believe that every offer is negotiable in some way.

Coming to the case of Darrel Hair and ICC (August 22 2006 - Pakistani Vs England - Ball Tampering Issue), Darrel Hair accused Pakistani team of ball tampering. Pakistani team protested against it by not taking to the field post Tea Session in which case the match point was awarded to England. This became a source of constant media debate and pressure on ICC.In the past, there was pressure from other cricketing nations like India as well for not allowing Darrell Hair to officiate in their matches because of his proven umpiring errors against the team. Public comments made by Darrel Hair on Sri Lankan player (Muralitharan) also compounded the matters for Darrel Hair. Now Let's look at three critical factors of the case:

1) Darrel Hair made his on-field decision in ball tampering case as per defined laws of cricket
2) He was recognized as Elite panel umpire by ICC.
3) He had a valid contract with ICC till March 31, 2008.

With his back against the wall due to constant media and ICC pressure, Darrel Hair taking the support of aforementioned factors issued a non-negotiable offer to Doug Cowie of ICC demanding $5,00,000 in case ICC decides to terminate his employment contract with him. In case ICC doesn't agree to paying this amount and other conditions mentioned in non-negotiable offer, Darrel Hair would be available for services to ICC till end of his contract.

Interestingly, the case is about an employee negotiating terms for his exit which is in some way forced upon him through ICC itself. Further, it is not that his skills are not replaceable by other umpires. So in a sense, unless the contract prohibits ICC from terminating the services of Darrel Hair for any reason (which I presume wouldn't be the case) it is Darrel Hair who is in the weak position with this matter. And as the fact stands out, ICC didn't accept non-negotiable offer from Darrel Hair and banned him from officiating in international matches. Hair was reinstated him into Elite Umpiring Panel on 12 March 2008 and resigned in August 2008 to pursue his career in coaching.

Source : http://en.wikipedia.org/wiki/Darrell_Hair

Would you be able to make similar non-negotiable offer to your employer in any point of time in your career?

There are two conditions that should be met before I make a non-negotiable offer to my employer at any point of time in my career:

1) I am a key resource for the organization (perhaps irreplaceable). This means that it's in company's best interest to retain me.
2) I possess backing of an alternative lucrative opportunity / offer (to safeguard myself in case non-negotiable offer is rejected)

Unless these two exist, there will not be any weight in my non-negotiable offer.

Employer's Viewpoint

If I get a similar "non-negotiating" offer from an employee then I would first analyze the following:

1) Resource criticality and substitutability.
2) Job Agreement with the resource
3) Conditions leading to non-negotiating offer from employee.

Based on above mentioned conditions I would be in a better position to take a stand on offer from the resource. A good resource leaving the organization is never desired by the organization and so it's imperative to negotiate with that resource to come to an agreement that is beneficial for both parties.

NOTE: I am deliberately using the term resource instead of employee in the Employer's perspective to indicate what in reality a person is to an organization in eyes of the manager. There is definitely no place for emotions in such negotiations.

Thanks a lot for reading,
Kindly provide me your valuable feedback / highlight any shortcomings in the text above.