Workforce Contract Negotiation Essay

Introduction

• Contract negotiation involves two or more parties.
• The parties deliberate on a contract to reach an agreement.
• The agreement is legally binding.
• Both parties must be satisfied and have their rights protected.
• The agreement must be mutually beneficial.

Contract negotiation is the process of deliberating over a significant issue to reach an agreement that benefits the parties involved. During the negotiation process, the parties evaluate their interests to agree on the what is in their best interest. A contract agreement is subject to the law such that the terms of the agreement must be observed by the involved parties and there are legal consequences to the parties that breach the contract (Simone et al., 2020). The party negotiating must conform to the requirements of the law including being of legal age to sign a contract, being mentally capable to understand the content of the contract and not being under the influence of any intoxicated substance at the time of signing the contract.

Employment contracts govern most of the business agreements between companies and their employees. The contract involves reaching an agreement between the employer and the employee on various factors that will define their employment relationship (Clipa et al., 2019). Some of the significant factors addressed in the employment contract include the duration of the contract, the environment of work, the hours of work, the payment rate, salary, the duties assigned to the employee, and other benefits. The employment contract is governed by the labor laws and therefore its terms and conditions must conform to the labor laws. There are various labor laws in the United States that define the structure of the workplace. These laws include child labor, gender equality, racial equality and the working conditions.

Employment Contract

• The contract is an agreement between the employer and the employee.
• The contract is legally binding.
• The agreement is subject to labor laws.
• The contract is precise on the rights and responsibilities of the employers and the employees.
• The agreement is subject to the offer the employer makes to the employee.

Employment contracts govern most of the business agreements between companies and their employees. The contract involves reaching an agreement between the employer and the employee on various factors that will define their employment relationship (Clipa et al., 2019). Some of the significant factors addressed in the employment contract include the duration of the contract, the environment of work, the hours of work, the payment rate, salary, the duties assigned to the employee, and other benefits. The employment contract is governed by the labor laws and therefore its terms and conditions must conform to the labor laws. There are various labor laws in the United States that define the structure of the workplace. These laws include child labor, gender equality, racial equality and the working conditions

There are three major forms of employment contracts:

• Permanent employment contract.
• Fixed-term employment contract.
• Causal employment contract.

There are two employment categories defined by these contracts:

• For-Cause Employment.
• At-Will Employment.

Employment contracts are determined by the employment status of the party that the employer is negotiating the contract with where it can be an ordinary employee or a contractor. Depending on the status of the employee, the contract can either be permanent, fixed term or causal. Permanent employment contract involves an agreement between an employer and an employee who works on regular hours and is paid a salary. The fixed-term contract involves is an agreement that covers a specific period of time after which it expires. Causal contract does not define the duration for the agreement. It can be terminated any time when either of the party decides.

These contracts determine the type of employment relationship that the employers form with their employees. There are two main categories of employment including for-cause employment and at-will employment (Simone et al., 2020). For-cause employment contract can only be terminated for a specific reason and the decision must be reviewed by other authorities. On the other hand, At-will employment contract can be terminated whenever the employer deems fit and is not subject to any authority. However, the US, employer ae required to submit specific reasons for the termination of contracts.

The party proposing for contract modification must specify the following:

• The changes involved.
• The parties affected by the changes.
• The reasons for the changes.
• The time required to implement the proposed changes.
• The options that can be explored.

Making proposals for modification of the workforce contract is necessary to ensure that the parties involved in the contract agree to the proposals before implementing the changes. When communicating the changes all the affected must be given enough time to consider the proposals and understand their implications. This will enable them find the best way to respond. The proposing party must explain the other options that it had explored before making conclusions on the changes and why they are not appropriate. The other parties must be given the opportunity to make their proposals on alternative options. Lastly, both parties must negotiate to solve any disagreements brought by the proposed changes

Motivation

Workforce contract modification is motivated by various factors including:

• The need to embrace economic conditions.
• The need to incorporate government policies.
• The need to correct mistakes on the existing contract.
• The need to change working schedule.
• The need to improve the working environment.

Businesses are effected by several factors that motivate the employers and employees to propose changes on the employment contract. Some of the major motivators include unfavorable economic conditions which may force the employer to propose reducing the salary and rates of the employees to protect the company from suffering huge losses (Joubert, 2020). Government policies such as introduction of new labor laws may force the employer to reorganize the workforce which may require modifications on the contracts of the employees. Furthermore, the employer my propose changes on the existing contracts after realizing a mistake on the contract and therefore the need for corrections. For the employees, they may propose changes on their contracts to adopt more flexible working schedule. Additionally, employees may propose changes on their contracts to demand in their working conditions especially if the current working environment is not conducive. Other factors such as low wages, long working hours and the need to change from working part-time to full time or vice vasa may trigger proposals for contract modification.

Importance of Consulting both Parties

• It prevents parties from breaching the contract.
• It enables the other parities to make alternative suggestions.
• It solves the confusion that may arise as result of the changes.
• It enables the parties adopt the changes swiftly.

Consultation is necessary before making any modifications on the existing contract. Since a contract is a legally binding agreement, any changes must involve the consent of both parties. Additionally, it is significant to involve the other parties to allow them give alternative solutions to the problem triggering the contract modifications (Joubert, 2020). Furthermore, modifications may cause a lot of confusion to the affected parties if they are implemented without their consultation. It is therefore significant to consult them to enable them understand and respond to their concerns effectively. besides, by consulting them, the parties create an opportunity to negotiate for an agreement on any disagreements that may arise. lastly, consultations give the affected parties enough time to familiarizes with the proposed changes and adopt swiftly thus making the implementation process efficient.

Negotiation Strategies

Negotiation strategies involve four major stages:

• Preparing.
• Opening and exchanging information.
• Bargaining.
• Closing and implementation.

Negotiation strategies employ these four stages to enable the parties involved to express their interest and deliberate on their differences to reach an agreement. At the preparation stage, the parties collect the information necessary for explaining their objectives and expectations of the contract being negotiated (Strykowski, 2018). The next stage is opening and exchanging of information where the concerned parties define and justify their positions. At the bargaining stage, the each party employs different negotiation strategy to propagate their interest. Lastly, at the closing and implementation stage, the parties reach an agreement and review the terms of the consensus to solve any form of misunderstanding.

Types of Negotiation Strategies

• Competition (Win-Lose).
• Collaboration (Win-Win).
• Compromise.
• Accommodation (Lose-Win).
• Avoidance (Lose-Lose).

The type of negotiation strategy that the negotiating parties employ tend to have three outcomes including all the parties to win the contract by successfully propagating their interests, either of the party to win while the other loses, or both parties to lose. The relationship between the parties tend to depend on the outcome of the negotiation process.

Negotiation Strategies

Competition

• Adopts the win-lose model.
• Prioritizes the interests of each party.
• Favors the outcome of the negotiation than the relationship of the parties.
• Achieves the short-term benefits of the agreement.

The competition negotiation style is largely based on an aggressive approach that both parties take. The benefits of winning the negotiation are the main motivation for the negotiators to continue propagating their interests (Jang et al., 2018). It is often employed to win short-term benefits rather than reaching a mutual agreement. This negotiation style can ruin the reputation of the parties if it becomes exceedingly competitive. The parties tend to use their position of leverage to outdo each other.

Collaboration

• Adopts the win-win model.
• Favors the interests of both parties.
• Exploits the creativity of the concerned parties
• Strengthens the relationship of between the parties involved.
• Embraces the long-term benefits of the agreement

The collaborative strategy aims to achieve both positive outcome and a good relationship between the parties involved. This strategy requires the parties to think creatively to develop solutions that are satisfying to those involved (Strykowski, 2018). Therefore, it consumes time and resources as the parties try to develop effective solutions. In most cases, it is usually successful when the parties’ interests are compatible.

Compromise

• Embraces the bargaining model
• Requires the parties to forgo some of their interests in favor of the other.
• Requires the parties to take significant time to reach an agreement.
• Requires the parties to be familiar with each other.

This negotiation style requires that parties give up some of their interests for the other party to gain. It is usually effective when the parties involved have a long-term relationship such that the winning party is likely to give up its interest in favor of the other party in the future agreements (Strykowski, 2018). However, this model hinders creativity and because it does not give the parties opportunity to explore other options that can lead to a mutual agreement. In most cases, those who use compromising approach are concerned of the relationship of the parties rather than th benefits of the outcome. In most scenarios, at least the interest of each party is satisfied but one party tend to benefit more than the other.

Accommodation

• Employs the lose-win model.
• Favors the interests of one party at the expense of the other party.
• Prioritizes the relationship of the parties over the outcome.
• Amends the relationships that had been broken and gain trust of the winning party.

The accommodative negotiation strategy is the opposite of the competitive strategy. In this type of strategy, the party that is less persistent gives up its interest in favor of the more persistent party (Jang et al., 2018). This strategy involves a lot of personal interests rather than business interests. Therefore, emotions and personal feelings may be involved. The outcome is usually aimed at building trust, respect and long-term relationship between the parties involved.

Avoidance

• It involves adopting the lose-lose model.
• It involves disregarding the significance of the outcome and the relationship of the parties.
• It involves withdrawing from the negotiations.
• It involves dismissing the interests of the parties.

The avoidance strategy is only effective when an agreement threatens the existing peace between the conflicting parties. One party may withdraw from the negotiations if the outcome is likely to make the other party stronger and more threatening.

Conclusion

• Contract negotiation requires both parties to reach an agreement that is mutually beneficial.
• Employment contract is one of the most common contract negotiations that is legally binding and requires law.
• Contract modification requires consultations with the concerned parties.
• The major contract negotiation strategies include competition, collaboration, compromise, accommodation and avoidance.

References

Simone, A. M., Simone, M., Block, L., & LaVine, N. (2020). Contract Negotiation Skills: A Workshop for Women in Medicine.MedEdPORTAL, 16, 10910.

Clipa, A. M., Clipa, C. I., Danileț, M., & Andrei, A. G. (2019). Enhancing sustainable employment relationships: An empirical investigation of the influence of trust in employer and subjective value in employment contract negotiations. Sustainability, 11(18), 4995.

Joubert, K. L. (2020). An elaboration and modification of the May, Gilson, and Harter (2004) employee engagement structural model (Doctoral dissertation, Stellenbosch University).

Jang, D., Elfenbein, H. A., & Bottom, W. P. (2018). More than a phase: Form and features of a general theory of negotiation.Academy of Management Annals, 12(1), 318-356.