Navigating Wage Negotiations with a Strong Union: How Do You Balance Demands and Profitability?

ranjitsinghparadip
I want to know in detail about wage settlement with the Union.

1. How to initiate effective wage negotiation.
2. What are the factors that should be kept in mind while wage negotiation?
3. How much should an employer give to the employees?
4. What are the criteria to meet their demands?
5. How to convince senior management about their demands.
6. If an organization is not making much profit, can it be justified for a wage increase for which the Union is pressurizing?
pramoddas
Dear friend,

To negotiate, you must first establish your BATNA, which is how much you are willing to pay. Be prepared to negotiate and inquire about the other party's demands. Consider if you can offer less and try to determine their desired amount. Then, proceed to negotiate, but remember not to forget your BATNA.

Regards,
Pramod
Madhu.T.K
Wage negotiation with workmen and union members is a matter to be viewed very seriously. The negotiation pattern and style depend to a great extent on the industry, firm, wages/benefits to workers prevailing, and the attitude of the employer and employee. Above all, negotiation should take into account the particular situation prevailing in the company. There cannot be a simple practical solution or formula to solve this issue. Certainly, you have to study the matter carefully before it is presented before the union. Most often, union activists will not accept your statements. Therefore, it should be drafted in such a manner that the union could be convinced. Sometimes, a negotiation will take days and weeks to complete; don't worry, let it take its own time, and we shall wait for the result.

Always try to act as a conciliator by bridging the two ends - the employer and employees. It may be with the silent permission of your employer, if you negotiate from the side of employees, the matter will be easier.

Remember that trade union representatives will not accept your balance sheet as it is. Therefore, do not try to compel them to accept it. Instead, you can level the figures in real terms and relate them to the performance/productivity of workers. It may take a decreasing turn or increasing turn, the former in favor of the employer and the latter against the employer. If you could show the decreasing trend in labor productivity, you can have a smooth negotiation.

As said, outside the negotiation table, you should convince the employer of the genuineness of the demands and the consequences of non-acceptance of demands. For this, use the salary and terms in other firms in the same industry.

In brief, the negotiation of one company will be different from another, and it differs from situation to situation. Therefore, act accordingly.

Remember that privileges become rights and once given, privilege cannot be taken back.

Regards and all the best.

Madhu.T.K
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