This is the penultimate instalment in our look into employment mediations by http://www.cedr.com/about_us/people/?p=Caroline-Sheridan.

As a mediator I am often asked, sometimes in the mediation itself, what negotiating stance a party should adopt in order to get the best deal out of the process.

This is dangerous territory for a mediator.  It goes without saying that I cannot disclose anything of the other side’s negotiating position, e.g. that although they have said they will do a deal at £x, they would really go for £y.  Similarly, I cannot advise either party as to the offer they should make themselves, with the possible exception of some gentle shot across the bows of any offers which I fear will fall into the Insult Zone (see Part 7 of this series) and so jeopardise the whole process.

The reality is that there are as many negotiating styles as there are disputes, and their effectiveness or otherwise is entirely a function of their opponent.  Some parties will crumble quickly if an employer makes a low offer and steadfastly refuses to increase it.  On the other hand, others will regard that (as, secretly, would I) as a sign that it is not taking the mediation seriously and they consequently abandon ship early on.   It is consequently totally impossible to provide a definitive guide to negotiation tactics which will work every time.  However, here are some thoughts which might be helpful for employers:-

  1. do not be tempted to say your offer is “final” unless it is, meaning that you will reject even the tiniest increment over that position.  While this sometimes works, if it does not then to move your offer materially after playing the “final offer” card will cost you dearly in credibility terms for the rest of the mediation;
  2. your negotiation movements should ideally decrease in size (or percentage) each time.  To change your position in same-size steps does not give the other party any reason to sense the narrowing of the opportunity to settle.  CEDR adopts the rule of thumb that you should aim to be somewhere close to settlement in no more than three offers and counter-offers each;
  3. focus initially on things you can agree on – a reference if the person is leaving, a low-cost but cosmetically important accommodation of some sort if he is not.  Sometimes leaving the money until later allows the parties to recognise that there is less between them than they thought;
  4. adopting too hard a line too soon will risk alienating the other party.  Later in the day this will probably be much more effective;
  5. keep positive – the mediation day can be long and hard and the great majority of breakthroughs come only at its end when the parties are otherwise facing the prospect of a day’s time and costs wasted.  A positive and reasonable approach conveyed to the other side also denies him to some extent the ability to blame you if the mediation fails.  Instead he must face the unattractive possibility that the failure was down to him.  This is a powerful spur to make that extra small concession which will put the thing back on track;
  6. try to de-personalise the issue – CEDR describes this as “working hard on the problem and soft on the people”.  Emotions can block negotiation progress but instead of dismissing them (easy for the employer but wildly provocative to the employee), try to recognise them up front and to make it clear that you do understand the other’s position.  This overt awareness of what the other party is feeling will also help you understand how any given offer is likely to be received.  An early attempt to put yourself in the employee’s shoes may well assist movement towards settlement;
  7. remember that your objective is not to come out with a deal you are happy with, but one you can live with.  The mark of a good settlement, I have heard it said, is that it makes both parties equally unhappy.  Be prepared to abandon points you would have preferred to maintain, in the knowledge that your opponent is doing the same.  If you are too wedded to your position then you should just get on and litigate it instead.  On the other hand, if you want the dispute resolved now without that cost, delay and uncertainty, then you will have to be willing (in some form or other) to pay for the privilege.

Next and last, reaching a binding settlement.