Most negotiation outcomes will fall into one of two categories: Win-Win or Win-Lose. By understanding the different types of negotiations you may encounter, you can determine the most relevant skills for your role and work to improve them.
Here are forms of negotiation:
Distributive negotiations: Also called distributive bargaining, this form of negotiation occurs when there is a limited amount of resources and each party assumes if they lose something, the other party will gain something. Instead of each party attempting to come to an agreement based on their interests and needs, each party is working to get more than the other party. For example, a client may feel if a provider does not lower the price for a service, they will be paying too much, and the service provider may feel if they decrease their price, they will losing money.
Integrative negotiations: Often referred to as a “win-win,” an integrative negotiation occurs when everyone benefits from the agreement. In order to come to an integrative agreement, each party receives some value. The integrative negotiation process may take longer because both parties have to feel fully satisfied before coming to an agreement. For example, if a client believes a provider should reduce the cost of their service to $800, and the provider believes they maintain the cost of their service at $1000, the two parties may negotiate to a $900 service. In this case, both parties “win” $100.
Management negotiations: Negotiating with management can be stressful. In some cases, employees may feel uncomfortable sharing their wants and needs with someone in a more senior position. However, you’ll often encounter this sort of negotiation during the job seeking and hiring process. You may have to negotiate your salary, benefits and job duties. Each of these elements can directly impact your job satisfaction, so it’s essential to address them. Additionally, negotiating these factors gives you an opportunity to demonstrate your communication skills to your employer. You might also have to negotiate with management in your current position when re-evaluating your employment contract or requesting a raise.
Coworker negotiations: Depending on your job, you may have to negotiate with your coworkers. Many positions require close teamwork and without strong negotiation skills, you may face imbalances in work distribution. Negotiation skills allow coworkers to develop a plan that benefits the whole team. You may also have to negotiate when solving conflict in the workplace.
Vendor negotiations: Some employees manage external vendors, and their performance rating may be affected by how they negotiate. Also, the ability to reach an agreement with service providers can affect your professional relationships and general business success.