Reprinted with permission of The Association
for Quality and Participation from
the September/October 1998 issue of The Journal for
Quality and Participation,
Cincinnati, Ohio, © 1998. All rights reserved.
For more information contact AQP at 513-381-1959 or
Interest-based negotiation demonstrates
its capacity to enhance bargaining outcomes without
impairing the parties’ relationships.
An Engine-Driving Change
John R. Stepp
Kevin M. Sweeney
Robert L. Johnson
Every year, 25,000
to 30,000 managers and union representatives negotiate
collective bargaining agreements. These events are the
most strategic opportunities they have to produce change,
yet they often remain the last bastion of the status
quo and old-style labor relations. Most negotiators
still engage in old rituals that often result in leaving
problems unsolved and potential solutions “on
The inadequacies of
traditional negotiations first surface in the preparation
phase, which resembles a mobilization for war. Differences
are accentuated, villains identified, weapons honed,
war paint generously applied. The parties then arrive
at the bargaining table in full battle dress. The focus
tends to be on separate, or what are assumed to be,
competing interests. The negotiations process resembles
a strategic retreat from exaggerated positions. Collective
bargaining, arguably the parties’ most valuable
tool, is reduced to an instrument of conflict.
In fairness to traditional
bargaining, it works well when the parties control their
markets, when they face little competition, when change
is proceeding at a digestible pace, and when bargaining
structures are centralized, thereby permitting coordinated
or pattern bargaining to remove labor costs from the
A new bargaining tool
Interest-based negotiation, on the other hand, has demonstrated
its capacity to enhance bargaining outcomes without
impairing the parties’ relationship. Its essence
is information-sharing, creative exploration, and working
toward mutually beneficial solutions. There are six
basic steps to the process.
1) The bargainers
describe and define the issue, such as the topic to
be discussed and/or the problem to be resolved.
2) An opportunity
for each party is provided to identify its interests
in regard to the issue—and to explore the interests
of the other party. An interest is a reason why the
issue is important to one or both of the parties.
3) With a shared understanding
of all the interests, the parties engage in step three:
the creation of options or potential solutions to satisfy
as many of the interests as possible.
4) The parties agree
on the criteria they will use to evaluate the options.
Criteria are the characteristics of an acceptable solution.
5) The parties select
the options that best meet the agreed-upon criteria.
6) The parties integrate
or craft these options into a comprehensive solution,
concluding the process.
A decade of experience
in assisting managers and union representatives in conducting
interest-based negotiations has convinced us that applying
certain approaches and techniques to both the preparation
and execution phases of the negotiation can make all
the difference between success and failure.
Preparation, an essential
key, should begin four to six months in advance of bargaining.
An early start allows the bargaining committees sufficient
time to be trained in the interest-based negotiation
process. Interest-based negotiation training is comprised
of three key parts:
1) an introduction
to the interest-based negotiation model
2) skill(s) building
3) practice through
the theoretical constructs of interest - based negotiation
is the starting point.
Just as traditional
bargaining requires a discernible set of skills, so
does interest-based negotiation. Active listening, brainstorming,
and consensus decision-making lead the list. After initial
skill-building practice, participants deepen their understanding,
and hone their skills during a series of increasingly
complex and challenging simulations, accompanied by
critical feedback from a skilled practitioner. Following
the training, both parties can make an informed decision
whether or not to utilize the interest-based negotiation
process. If yes, their preparatory work must begin immediately
with the constituents of each party. All constituents
should be given an explanation of the process to include
how it works, why the bargaining, committees have elected
to utilize it, and how both the preparation and conduct
of bargaining will differ from the old rituals witnessed
in previous negotiations.
In our experience,
the traditional approach thrives on the perception of
fervent advocacy. The only means of counteracting this
perception is to inform one’s constituents of
the shortcomings of the traditional bargaining process
in today’s environment and to explain how interest-based
negotiation is less likely to leave problems and potential
solutions on the table.
In the end, it is
results that matter. Interest-based negotiation yields
superior outcomes and undamaged relationships.
How to start
Before formal negotiations
begin, the parties should identify the key issues and
determine data needs. For complex issues, brainstorming
during bargaining may not be an adequate tool. Imagine
brainstorming wages, pensions, or a new work system.
For these kinds of issues, joint task forces or subcommittees
should be specifically chartered—well in advance
of bargaining—to gather data, explore options,
and/or benchmark best practices.
One large pharmaceutical
firm and its union jointly studied a variety of pay-for-performance
systems well before bargaining. Their recommendations
were then presented to the bargaining committees for
consideration and ultimately adopted. Likewise, a Great
Lakes utility and one of its largest unions met jointly
for nearly a year before bargaining, in an effort to
gather information, benchmark best practices, and select
the best pension plan for their particular age-mix of
employees. Their efforts paid off with a newly negotiated,
defined contribution pension plan that better met their
If having the right
data is important to expedite negotiations, having the
right people present is equally important. The decision
to utilize interest-based negotiation requires that
careful attention be paid to the composition of the
bargaining committees. This is particularly true for
management participants in large organizations. In traditional
bargaining—utilizing the procedure of proposal,
caucus, counterproposal, caucus, and so on—all
proposals can be carefully reviewed up and down the
organizational hierarchy. In contrast, interest based
negotiation is a more free-flowing, dynamic, and spontaneous
process. Where traditional bargaining emphasizes control,
interest-based negotiation accents creativity. Through
the synergy resulting from the problem solving-process,
unimaginable options are often generated. If every fledgling
idea has to be first run up and down the hierarchical
flagpole to see who salutes, this synergy and creativity
would be stymied.
There are at least
three solutions to this dilemma:
1) Make certain that
the key players or decision-makers are on the bargaining
committee. In one large (50,000 person) organization,
the chief spokesperson for management was five layers
down in the organization.
fully” those at the table to make most, if not
all, of the decisions that must be made to reach an
agreement. While most senior managers are not personally
inclined to devote the time and attention required to
be direct participants in the negotiations, neither
are they prepared to delegate such critical issues to
3) Establish wide,
but clearly defined, parameters or boundaries around
each issue. So long as the bargainers remain within
this predetermined “field of play,” they
are licensed to do whatever they deem appropriate. Whenever
negotiations take them near or perhaps beyond these
boundaries, they must be permitted to pursue further
guidance from their constituents.
A new set of norms
is required for the successful utilization of interest-
based negotiation. Reverting to traditional norms and
behaviors is commonplace when interest-based negotiation
is being attempted for the first time. Only by utilizing
an experienced facilitator can this be avoided.
Both procedural and
behavioral ground rules are critically important to
the successful conduct of interest-based negotiation.
A mutual understanding should develop around the timetable
for bargaining. This timetable would include commencement
of bargaining, frequency of meetings, dovetailing local
negotiations with master negotiations, discussing any
parameters around the field of play, and reviewing the
A ground rule on information-sharing
is needed to encourage free disclosure of information.
Ground rules defining the role of spokespersons should
be discussed. Participation should not be limited to
or funneled through spokespersons. Another key to a
successful negotiation is a clear understanding or a
ground rule defining consensus decision making. What
are individual’s obligations when he or she provides
In addition parties
should adopt a ground rule that holds the solution to
in the genesis of interest-based negotiations was the
publication of Getting to Yes: Negotiation Agreement
Without Giving In by Roger Fisher and William Ury, both
from Harvard. By the late 1980s, Harvard, Cornell, MIT,
and the U.S. Department of Labor introduced early applications
of the getting-to-yes model to union-management contract
negotiations. By 1990, the Federal Mediation and Conciliation
Service introduced the Department of Labor model into
their tool kit, and many private consulting firms created
their own refinements to the model. Although it is hard
to estimate how many companies and unions have engaged
in interest- based negotiations, it is safe to say that
the vast majority still cling to the traditional win-lose
Any one issue to be
a tentative agreement pending the solution of all issues.
Solutions reached on issues important to one party have
no permanent standing unless all issues are resolved
to the satisfaction of both parties.
Ground rules addressing
the issue of notes and official records are necessary.
Bargaining in the interest-based negotiation format
requires engaged participants, not passive stenographers.
Flip charts and summary minutes should suffice as a
“history” between meetings. There should
be a clear understanding (ground rule), that nothing
said or done during the interest-based negotiation process
can or will be used later, by either party, in an adversarial
The parties should
also agree on how communications will be handled. At
a minimum, there should be a ground rule prohibiting
any revelation of the internal discussions, play-by-play
attributions, and options developed during the interest-based
negotiation process. It is vital that all participants
be confident that they can speak freely and exchange
creative, “out-of-the-box” ideas, without
political or personal risk. Caucuses should not be discouraged.
A ground rule should permit either side to caucus whenever
either side feels a need or experiences discomfort.
Finally, a day of
negotiations should not exceed eight hours. Interest-based
negotiation is very demanding; therefore, marathon sessions
should never be attempted.
We recommend that
the first session begin with statements of commitment
to the values supporting the interest-based negotiation
process. The parties should next examine the issues
and determine the relative importance of each to establish
a “time budget” for the negotiations. Knowing
which issue to tackle first can have a strong bearing
on the success of the negotiations and set the tone.
Parties do well to pick an easy, yet meaningful, issue
first. It is important that the parties see that the
time and energy they have applied to their first issue
resulted in a satisfactory solution, one that has brought
about meaningful gains for both parties.
Both parties should
be encouraged to take risks and to let go of the desire
to control the outcome. Exhibiting behaviors aimed at
helping the other benefit goes a long way toward creating
the positive climate that encourages both parties to
find creative solutions.
between each party’s issues may minimize the perception
that all of the focus and attention (and possibly the
gain) is being given to one party.
The negotiators must
take each issue and work through the six-step interest-based
1) Describe and define
the issue. Properly framing the issue is critically
important. Issues can be defined too narrowly or too
broadly. If defined too narrowly, the issue may allow
little opportunity to develop an adequate option pool.
Defined too broadly—ballooning an issue, or making
a mountain out of a molehill—invariably leads
to frustration or exasperation. The rule of thumb is
to be as specific as possible in defining the issue,
without becoming so specific that only part of the described
problem can be resolved.
2) Identifying and
exploring interests. This step must be done well. Interest-based
negotiation, as the name implies, is an interest-driven
process, and well-developed and clearly articulated
interests are essential.
The parties must exhibit
a genuine desire to understand the other’s point
of view. Interests, by their very nature, must be accepted
as legitimate and not-to-be-debated. To ask clarifying
questions and confirm understanding of the interests
Next, it is useful
to determine which of the interests are mutual. This
is not a “matching” process requiring each
interest to appear on both lists. It is simply a means
of quickly surfacing common or shared interests, which
in turn, reveals fertile opportunities for developing
viable options. Interests not shared by both parties
are referred to as separate interests and remain because
they may be required to be satisfied in the final solution.
3) Creating options.
The key to success in this step is to go for quantity.
A technique to encourage brainstorming is to focus on
the list of interests. Multiple options should be generated
to cover every interest.
4) Agreeing on criteria.
This is a difficult step. Criteria are the guages by
which we measure, compare, and judge options. There
are few “objective criteria.” One of the
best gauges for evaluating options is the respective
interests of the parties. Generally, there are a few
interests that must be satisfied for the solution to
be viable or acceptable. In effect, these are criteria
and should be treated as such. Coming to agreement on
these and any other appropriate criteria determines
the outcome of step four.
5) Testing the options
against the criteria. Evaluating each option in light
of the agreed-upon criteria can inhibit dialogue and
become overly mechanical and cumbersome, especially
when there is a long list of options and a number of
criteria. We have discovered several techniques that
enable the parties to avoid getting bogged down.
- Review the
list of options and focus on those that present broad
approaches to solving the problem. Each broad approach
is thoroughly discussed and evaluated for its ability
to satisfy the interests of the parties.
- Give each
participant a marker and ask him or her to place a
checkmark next to the five or six options that he
or she believes best meet the criteria. One must make
clear that this is not a voting process, but a way
of testing for initial preferences. The heavily favored
options then become the primary focal points. The
remaining options are examined to see if they meet
the criteria and can be incorporated into the favored
options to enhance their utility. Frequently, many
ideas are woven together in ways that meet as many
interests as possible.
- In the case
of large committees, utilize a “fishbowl.”
The fishbowl is a table placed within the larger U-shaped
table. Chief spokespersons are each asked to designate
two or three people who are particularly knowledgeable
about the issue being bargained. The designees are
seated at the small table (fishbowl) and are tasked
with weaving together the promising options identified
by the full committees. Two empty chairs are placed
at the small table. At any time, other participants
observing the deliberations may occupy an empty chair
to offer suggestions or make comments. Once made,
they must return to the outer table thus making the
seat available for others to do likewise.
are not the only obstacles that can arise at this stage.
Substantive concerns can also surface. Groups frequently
discover that the ultimate solution to the issue being
worked is dependent upon what is being done on some
closely related issue. When this situation is encountered,
“parking” the unfinished solution and working
on the related issues is the best course of action.
Once the solutions to these related issues are more
clearly focused, the parties can resume work on the
however, does not utilize a “tit-fort- tat”
procedure. No one must give up something on one issue
to realize a gain on another. “Horse trading”
is discouraged. Each issue must be viewed as a joint
problem to be solved.
6) Writing the contract
language. The final step can be done by a drafting committee,
union-management pair, or an individual. In drafting,
confusion or gaps mav appear requiring clarification
from the full committee. The final written solution
comes back to the group to ensure the group’s
One concern we have
experienced regarding interest-based negotiation is
the amount of time required. Arriving at the table with
problems clearly identified, interests articulated,
and a timeline developed expedites the flow of negotiations.
As the parties become more experienced with interest-based
negotiation, process efficiencies are realized. Some
complex issues may be broken into several separate sub-issues
to expedite resolution. An abbreviated process may also
be used to resolve an issue where little is in dispute.
Jointly developed data will focus the discussion.
Finally, by using
subcommittees to explore complex issues well in advance
of the beginning of negotiations, it is possible to
have agreements in principle or jointly supported recommendations
for the bargaining committee’s consideration.
In dozens of interest- based negotiations—and
many more traditional negotiations—the time required
for each is essentially the same.
Another concern frequently
expressed by traditional negotiators is whether they
should reveal their bottom line. Interest-based negotiation
neither requires nor encourages disclosing one’s
bottom line. The process is designed to yield the most
elegant or comprehensive solution possible.
There is, on the other
hand, a requirement to reveal one’s interests.
The articulation of interests on a particular issue
is an expression of the issue’s importance. Interests
must be articulated and data shared, but neither party
should be expected to reveal the minimum level for satisfying
its interests on an issue.
A third and closely
related concern is the applicability of interest-based
negotiations to economic issues, particularly wages.
Applying interest-based negotiations to these issues
may be difficult, but helpful. With an agreement on
appropriate data, the parties can frequently create
a salary or benefit range. Interest-based negotiations
is helpful in focusing the parties away from extreme
staked-out positions toward substantive discussion on
the value associated with job elements, the interests
of employees, the needs of the employer in attracting
and retaining talent, and competitive requirements or
is the best policy
On many an occasion,
the fledgling efforts of union and management representatives
working together have been thwarted by the dynamics
of traditional bargaining. Interest-based negotiations,
on the other hand, employs the same behavior, norms,
and problem- solving methodologies that are utilized
when parties cooperate during the terms of agreement.
Jekyll and Hyde personas are no longer required.
subtlety encourages the parties to expand the scope
of bargaining. In one automotive-parts plant, the negotiators
devoted half of their bargaining time to the issue of
how to improve throughput in the operations. Interest-based
negotiation fosters problem solving and encourages frank
discussions of complex issues. Since strategic issues
frequently are not mandatory subjects for bargaining
under current labor law, management’s willingness
to negotiate policy issues is very limited when traditional
bargaining prevails. In arriving at the decision to
adopt an interest-based approach to negotiations, the
parties need to recognize that interest-based negotiation
is an art, not a science, and that flexibility is a
must. Many issues lend themselves to an interest-based
approach, but in particular circumstances, the use of
a rigid step-by-step interest-based negotiation may
not be appropriate. Openness, sharing of information,
working to meet each other’s interests, exploring
new or creative ideas, and employing mutually agreed-upon
criteria, rather than power, will be the ingredients
of successful negotiations. Interest-based negotiation
is not a magic potion, nor a religion or panacea. It
is a tool that can help negotiators be more effective
in achieving their aims.
negotiation need not be relegated to contract negotiations.
Its methods are equally appropriate in resolving day-to-day
conflicts in the workplace. Its reliance on a clinical
analysis of the underlying interests is more likely
to yield lasting solutions than the symptoms-focused,
rights-based, litigious techniques employed in traditional
grievance handling. The values embedded in interest
based negotiations are consistent with those needed
for a high- performance workplace.
John R. Stepp, Ph.D.
is with Restructuring Associates Inc. and has attained
recognition as an advocate of improved labor-management
relations and high-performance work systems in unionized
environments. Stepp has authored some two dozen articles
addressing the future of labor-management relations.
Stepp may be reached at 202-775-8213.
Kevin M. Sweeney,
Ph.D. is a partner in Potomac Consulting, LLC and has
attained recognition as an advocate of employee involvement
and a practitioner in the design of new work systems.
Sweeney may be reached at 703-404-9104.
Robert L. Johnson
is with Restructuring Associates Inc. and provides consultation
services to a large number of companies and unions across
North America. Johnson may be reached at 202-775-8213.
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QUALITY & PARTICIPATION | Cincinnati, Ohio September/October
1998 | THE JOURNAL FOR QUALITY & PARTICIPATION |