Negotiation Simulation

Zinnia Hotel is located in Los Angeles. (NOT Minneapolis) Before this meeting, each team must construct a negotiation plan. Each negotiation plan should include a bargaining agenda which contains the team’s threat point (i.e., the minimum [maximum] acceptable contract changes the union [company] would accept without a strike) and also what the team reasonably hopes to settle for. Both economic and noneconomic items should be included in the agenda. Blank templates are available on the exercise’s website. Costs should be estimated for the economic items in the packages. These bargaining agendas are not binding during negotiations, but are used to facilitate preparation. To help with costing various proposals, an Excel spreadsheet is available on the website. Final agreements (Page 4 “final agreement” in the “proposal”) must be submitted by email by that time ([email protected]).

Issues to be Negotiated: Each team member must prepare and act as chief negotiator for one issue from the following list: Issues include: 1. Wages – Article 6 and Appendix A: Wage Rates

(Union / Management chief negotiator #1)

2. Vacations and Holidays – Article 13 &14 & Leaves of Absence (e.g., sick leave, maternity leave) – Article 12 (Union / Management chief negotiator #2)

3. Hours of Work, Overtime, and Premium Pay – Article 8

& Retirement – Article 20 (Union / Management chief negotiator #3)

4. Health Insurance – Article 18 &19 and Appendix C: Health and Welfare Schedule of Benefits & Other Benefits (e.g. life Insurance, accident and sickness disability, day care and dental insurance) (Union / Management chief negotiator #4)

5. Team negotiation topics (all negotiators / negotiator #5) 1) Subcontracting 2) Successor Clause 3) Immigrant Workers (protect or report) 4) Term of Agreement (i.e. proposed contract duration in years) – Article 23

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Negotiating Teams: Each class will form negotiating teams of four. We need to end up with an even number of teams so some variance in team size may be necessary. Half the teams will represent management and the other half will represent the union. The primary focus of the Management Team is to negotiate a collective agreement that is satisfactory to the firm’s shareholders, to contain overall wage costs, to avoid a strike, and to arrive at an agreement that will contribute to the firm’s ongoing profitability. The primary focus of the Union Team is to negotiate a collective agreement that is satisfactory to the union members. The case in the text indicates the issues that are important to members. A strike or lockout is not an option. Failure to reach agreement on all terms by the end of the day will result in automatic a 10-mark penalty against all members of both teams. Presentation of Demand: Each team must submit their “Demand (Opening Position)” in writing to the professor and to the opposing team in class before negotiations on Mar 8, 2017. Proposals not exchanged on time will be subject to a 3-mark late penalty for the entire team.

Assignment Requirements: A. Proposal and Negotiation Planning Book Please download your 1. HRM 457 ILR Zinnia Negotiation Simulation Assignment 2. HRM 457 ILR Zinnia Corporate / Union Proposal Worksheets (Word template) 3. HRM 457 ILR Zinnia Planning Book (Word template) 4. HRM 457 ILR Zinnia Costing (Excel) Introduction The team will prepare an 1-page introduction together. This introduction will include:

• A statement and discussion of your overall strategic objectives for this negotiation. What are your priorities? What do you hope to achieve and why is this appropriate?

• A statement and discussion of how your will conduct the negotiations. What approach and tactics will you use to persuade your opponents? Why? What are the ground rules for negotiations?

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Section A All team members will receive the same mark for the introduction, the proposal, and final agreement (1 page). (40 marks) Section B Each student will prepare individual arguments and demand parameters for his/her article (2-4 pages per person). Each section should include the following (40 marks): 1. A chart outlining the Opening Position, Target Position and Fall Back Position,

Estimation of Your Opponent’s Fall Back Position, and the Estimated Cost of Your Proposal

Summary Estimated Cost Justifications Demands (Opening Position):

Target Position (Desired settlement)

Fall Back Position (Threat Or Walkaway Point)

Opening Position: The initial proposal (Page 3 “demand (opening position)). An opening position can be extreme or more moderate. These are the first proposals you put on the table first and should be sufficiently realistic to avoid a loss of credibility on your part. Target Position – What the Company or Union hopes to achieve. This is what you should be able to attain assuming competent negotiations and the absence of unforeseen circumstances. (May be expressed as either a specific goal or a range). Fall Back Position The absolute maximum / minimum level the Company or Union will accept. Also known as the “threat or walk away” position. This is your bottom-line position beyond which you are unwilling to make further concessions. Having determined this position, you must consider how you will respond if this goal cannot be met. This is the first page of the proposal: “maximum settlement” for the management teams and “minimum settlement” for the union teams.