Key Differences Between Collective Bargaining and Negotiation

The points given below are substantial so far as the difference between collective bargaining and negotiation is
concerned:

1. Collective Bargaining is a process through which the group of worker haggle the contract with the
employer to ascertain terms and conditions of employment, such as wages, working hours, health and
safety. Conversely, negotiation is a process, in which people of different interest groups come together
and reach a mutually acceptable outcome of a problem while maximising the benefit to be obtained for
their interest group.
2. Collective Bargaining is competitive in nature, in the sense that either of the parties involved attempts to
make the other party agree to their terms. Conversely, negotiation is cooperative in nature, such that it
seeks to find out the best obtainable outcome for both the parties.
3. In collective bargaining, the relationship between two parties is a win-lose relationship, wherein one
party wins, and the other one loses. Unlike negotiation, there exists a win-win relationship between
parties concerned, wherein both the parties gain something from the discussion.
4. While collective bargaining tries to prove who is right, negotiation is all about proving what is right.

Therefore, the legislative process by which the employer and the employees agree to the terms and conditions
of work is collective bargaining. On the other end, negotiation is a goal-oriented process that aims at
reconciling the differences between the management and labour union, by devising the ways to resolve the
differences.

Factors that Interplay in the CBA Negotiation

i. 5 Attributes of a Successful Negotiator (Attributes of Negotiating Panel)

1. Insight and perspective of the ‘Big Picture’ as well as the ability to pay attention to and prioritize
the details.
Possibly the most essential characteristic of world class negotiators is their ability to understand what it
is that all parties to the negotiation really want. The ability to see past the wish list of your counterparts
and really understanding why it is that they are negotiating with you is an essential element that will
help you to understand what common ground exists between all parties. Equally important is to
understand all the individual elements that will ensure agreement by all parties.
2. The ability to generate creative options.
What many people describe as business negotiation is often no more than one dimensional haggling
about price. Research suggests that more than 50% of negotiators struggle to create or uncover
options outside of this one dimension. The ability to think creatively may not come naturally to all of us
but it is a skill and process that can be practiced and improved upon.
3. Treating others with dignity & respect at all times.
A common misconception is that in order to be a tough negotiator one has to be a rude and ruthless
negotiator. In all actuality it is quite the opposite. Both Mahatma Gandhi & Nelson Mandela are shining
examples of how to “take the high road”. One can be tough on the issues while treating the people
involved with dignity at all times. The rule of reciprocity states that we will return to others the form of
behavior exhibited towards us. It is foolish to think one could rudely disrespect or demean ones
counterpart without increasing the likelihood their resorting to similar approaches. Remember that very
often victims become aggressors.

Notes
 4. Be prepared
The success of your negotiations will depend in large part on the quality of your preparation. We often
make the mistake of thinking that we don’t have enough time to spend on preparing for negotiations. A
primary factor in eliminating misunderstandings & shortening the negotiation cycle – therefore saving
you time – is the quality of your preparation. Try to spend at least as much time preparing for
negotiations as you expect to be involved in actual negotiation – ideally spend as much as 3 times
more time in preparation as you expect to be involved in actual negotiation.
5. Know and understand their strengths & weaknesses.
Continuously develop your skills. Similar to world class performers in professional sport, world class
negotiators spend significant time analyzing the way that they negotiate – particularly under pressure. It
is only once you have built an understanding of your own weaknesses & strengths that you can follow
the most useful path to improve. World class negotiators never stop refining their skills because they
realize that one can never reach perfection. The world within which we negotiate today often seems
more and more complex. Times change and so do the key skills required to be a world class negotiator.
If you are able to do nothing else but devote time to the above 5 key characteristics you will almost
certainly improve the quality of your negotiations and create more win wins.
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ii. 5 Top Labor Negotiation Strategies (Strategies of the Negotiating Panel)

A case could be made that dramatic reforms were needed to improve Chicago schools. But if one of
Emanuel’s goals was to avoid a teacher strike, as suggested by his support of SB7, then his strategy of
dodging and delaying negotiations with the CTU and limiting the number of issues on the table was
counter to a win-win negotiation strategy.

The combative and destructive nature of this strike suggests the following 5 labor negotiation strategies
and win-win negotiation skills for others engaged in potentially contentious labor negotiations:

1. Keep it cordial. Prior to negotiations, avoid provoking the other side with legal manoeuvres, side
deals, and other tactics that could worsen tensions.
2. Start early. When you engage your counterpart as early as possible in the timeline of a negotiation,
you demonstrate your interest in building rapport and exploring options together.
3. Imagine worst-case scenarios. Recognizing that overconfidence could inspire unrealistic
expectations on both sides, thoroughly assess the potential ramifications of a prolonged strike.
4. Make a realistic offer. Prepare an opening offer that is aggressive but not insulting, and back it up
with a compelling argument.
5. Put it all on the table. By refusing to put limits on the number of topics under discussion, you
exponentially improve the chances of discovering trade-offs that will satisfy both parties—and head
off a strike

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iii. (Effective CB Negotiation Preparation Stage)

(a) Negotiations may commence at the instance of either party – the workers or the management
While some management bide their time till trade unions put forward their proposals, others resort to
what is known as positive bargaining by submitting their own proposals for consideration by the workers
representatives. If the parties already have an existing contract, it specifically mentions that either party
proposing changes in the existing agreement should notify the other party. The nature and extent of
such changes must be notifies usually 30 to 90 days prior to the termination of the contract.
Notes
 (b) Union team
Careful selection of a Union bargaining team may make a significant contribution to the successful
outcome of a particular series of negotiations. The negotiators must have sufficient training to
participate and must have an understanding of the total business operation. The most popular and
apparently effective bargaining body consists of the following persons:
(1) Persons with extensive knowledge and experience an industrial relations/personnel management
function;
(2) Representative from the finance area; and
(3) Members with analytical capabilities.
(4) People with good communication and convincing skills.

If the negotiating body consists of such people from various fields, the combined effort yields sufficient
information and expertise. It is not essential for the number of representatives of the employers’ side
and the workers’ side to be equal as decisions is not taken by a process of voting by the majority.
However, it is advisable to keep the team strong and balanced. As far as possible, a committee should
be kept small, for large numbers on both sides become unwieldy. In such cases they may concentrate
on a discussion of individual grievances or problems than on the real agenda/issues. The chief
negotiator evolves a strategy of action and of the tactics to be adopted during the negotiations. It is
necessary that the roles to be played by each member of the team are properly preassigned and each
member knows when to take over the discussions. It is good to have proper meetings amongst the
team members on the agenda and other points which can be anticipated. The process is called as
internal negotiations and it is advisable to have internal negotiations before and during the collective
bargaining process.

(c) The Agenda

There is a need to develop proper and clear agenda so that meaningful discussion can be held. It is
further required that proper framework should get evolved for fruitful discussions. This helps in
adequate preparation for the various items to be discussed. It saves time as issues are identifies at the
outset and preliminary discussions are already done. It helps both management and union to determine
who should be present in the negotiation sessions. Both the employers and the employees should
devote a great deal of Time to the preparation for the negotiation. The necessary data may have to be
collected, from various sources like inside, outside the organization. An area survey of what other
organizations are doing for similar issues can provide us with important benchmarks. This kind of
surveys can be done with the help of experts in the field of industrial relations. As a part of home work,
the demands of the management should be analyzed and classified into three categories: · Demands
which possibly be met; · Demands which may be rejected; · And demands which call for hard
bargaining. An appraisal of the cost of implementing the proposals if they are accepted maybe worked
out. The union team should carefully formulate their charter of demands; thoroughly study the
implications of the unions demands; and think of the arguments and the counter arguments during the
bargaining.
iv. (5 Basic Negotiating Strategies)

1. Win-win negotiation strategy #1: Make multiple offers simultaneously.

When you put only one offer on the table at a time, you will learn very little if the other party turns it down.
By contrast, think about what happens when you simultaneously present multiple offers, each of which is
equally valuable to you, advises Harvard Business School professor Max H. Bazerman. If the other side
refuses all of your offers, ask her which one she likes best. Her preference for a specific offer should give
Notes
 you a strong clue about where you might find value-creating, win-win trades and generate mutual gain. In
addition to identifying potential win-win moves, when you make multiple offers simultaneously, you signal
you’re accommodating and flexible nature, as well as your desire to understand the other party’s
preferences and needs. So, the next time you are about to make an offer, advises Bazerman, consider
making three that you value equally instead.

For more information on MESOs in negotiation, see also: Negotiation Strategies and Negotiation
Techniques – MESO Negotiation

2. Win-win negotiation strategy #2: Include a matching right.

In negotiation, including a matching right in your contract—a guarantee that one side can match any offer
that the other side later receives—can be a classic win-win move, according to Harvard Business School
and Harvard Law School professor Guhan Subramanian. Imagine that you’re a landlord negotiating with a
prospective tenant. You want to keep the ability to sell the apartment to someone else in the future, while
the prospective tenant wants a commitment to rent the apartment for as long as she wants. Offering the
tenant a matching right—the power to match any legitimate third-party offer—would allow you to preserve
your own flexibility while giving the tenant the opportunity to avoid the disruption of a move. In this manner,
matching rights can improve the odds of a win-win agreement.

For more information on matching rights, see also: Business Negotiations – Matching Rights: The
Fundamentals

3. Win-win negotiation strategy #3: Try a contingent agreement.

In negotiation, parties often reach impasse because they have different beliefs about the likelihood of future
events. You might be convinced that your firm will deliver a project on time and under budget, for example,
but the client may view your proposal as unrealistic. In such situations, a contingent agreement—
negotiated “if, then” promises aimed at reducing risk about future uncertainty—offers a way for parties to
agree to disagree while still moving forward, writes Massachusetts Institute of Technology professor
Lawrence Susskind in his book Good for You, Great for Me: Finding the Trading Zone and Winning at Win-
Win Negotiation (PublicAffairs, 2014). Contingent commitments often create incentives for compliance or
penalties for noncompliance, explains Susskind. You might propose paying specified penalties for turning
your project in late or agree to significantly lower your rates if you go over budget, for example. To add a
contingent agreement to your contract, begin by having both sides write out their own scenarios of how
they expect the future to unfold. Then negotiate expectations and requirements that seem appropriate to
each scenario. Finally, include both the scenarios and the negotiated repercussions and rewards in your
contract. A contingent agreement can greatly increase your odds of being satisfied with whatever remedies
are in place—and help generate a win-win deal.

For more information on contingency agreements in negotiation, see also: Contingency Contracts in
Business Negotiations: Agreeing to Disagree

4. Win-win negotiation strategy #4: Negotiate damages upfront.

Because not all future events can be anticipated with contingent agreements, another way to foster a win-
win agreement is to include liquidated damages clauses in your contract that stipulate how much will be
paid if the contract is breached, according to Subramanian. Consider that if one party sues the other side
for breach of contract down the line, the plaintiff (if she wins) will be awarded monetary damages rather
than the specific goods or services that were lost. Therefore, negotiating upfront exactly how much will be
paid for each late or missed delivery, for example, may streamline any alternative dispute-resolution
Notes
 measures or lawsuits that arise. In addition, negotiating damages puts a new issue on the table—and thus
expands the potential for value creation. In this manner, adding new issues to the mix increases the
opportunity for win-win negotiations.

For more on this bargaining tactic, see also: Business Negotiation Skills: Negotiate Before the Damage is
Done

5. Win-win negotiation strategy #5: Search for post-settlement settlements.

Imagine that you’ve just reached an agreement. You are fairly happy with the deal, but suspect you could
have eked more value out of it. According to conventional wisdom, you should quit talking about the
agreement with your counterpart and move on, lest you spoil the deal. By contrast, Bazerman advises
asking the other party whether he would be willing to take another look at the agreement to see if it can be
made better. Explain to your counterpart that you would each be free to reject a revised deal if it doesn’t
improve both of your outcomes. This type of post-settlement settlement can lead to new sources of value to
divide between you. It can also help generate a win-win contract if you didn’t have one before. Your
success in hammering out your initial agreement may have established the trust needed to explore the
possibility of an even stronger deal.

For more information on post-settlement settlements, see also: Business Negotiation Skills Tips – How to
Enhance Your Negotiated Agreement

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Process of CBA Negotiation

Four broad stages in the negotiation process

(1) preparation for negotiation

(2) negotiation stage

(3) signing the agreement

(4) follow up action

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Notes