Negotiation Strategy for Employee Retention in a Startup Company

The article discusses the negotiation strategy for employee retention in a startup company. It covers the issue of retaining an expert employee who demands a salary increment and has received an offer from a competitor. The article suggests discussing the terms and strategies privately with the employee and making them believe that they are an asset to the company. The negotiation should be open and frank, and the actual financial condition should be explained to the employee. The article concludes with a suggestion to offer a 10% increment in salary and 2% of profit when the project is completed. The subject, course code, course name, and college/university are not mentioned.

Assignment

Table of Contents
Table of Contents.............................................................................................................................2
Issue.................................................................................................................................................3
Strategy of negotiation among executive and employee.................................................................3
Conclusion.......................................................................................................................................5
References........................................................................................................................................7

Issue
In the present case the issue that comes into view is that there is an expert named jack lee, who
has a great specialization in its work and no one can replace him due to his expertise. As whole
association is dependent on its work and they can’t lose him. On the other hand presently jack lee
desire for an increment, a company is a new startup therefore the company is not in the situation
to exceed the wages of jack. Moreover, he has also received an offer from leading competitor of
the company Worksmart.com who is willing him to pay $300000 per annum which is twice the
amount $150000, he makes at Think fast. Jack has been part of the company since he initiated
his career and has been a loyal and productive scientist. Jack has requested the owner of the
company to match the salary offered to him by the competitor or he should leave the company.
Therefore, the issue is that, if company needs jack prominently and to make him stay with them
they need to enhance its salary. However they are not in the position to fulfill the demand of
jack.
Strategy of negotiation among executive and employee
Company needs to discuss the terms and strategies by which jack in order to influence him to
stay in company. Artinger, Vulkan and Shem-Tov, (2015) asserts that for making an employee to
work within the company as well as for motivating them; good compensation is the most
significant variant to be provided to be assured that company’s best performer will work in the
company. The major issue is negotiation of the salary with employees is actually not easy task,
therefore for fulfilling the needs of employee discussion should be done privately and not in
general meeting. As it has been assessed that discussion relating to salary might be difficult as
the given opportunity to employee could impact positively as well as negatively (Caputo, Ayoko,
Amoo and Menke, 2019). As a result it can both enhance their spirit and can discourage them.
Negotiation is done by the executives on a daily basis and apart from that most of their
discussion done in the informal way with their associates, customers and staff (Towns and
Aggestam, 2018). However, negotiating can be done in appropriate manner only when one
knows the specified art in thorough manner.

It is important for the managers to remember that they are required to negotiate with people but
not with organization, department and companies. Requirements of the people should be met as
they have their personal needs, interest and motivation except the objective for the company
(Forret, Balachandra and Anand, 2018). The chances of acceptance by employee are significant
when associates, workers and others are satisfied and encouraged for their performances
additionally, when both personal as well as professional need get fulfilled. Thus, it is necessary
to know about requirements of employee at individual level before making efforts to convince
them on required offer or conditions.
While negotiation; perception in the mind of people acts more powerful in comparison to real
facts. As perception is a reality on which people wanted to act upon. Fuller and Putnam (2016),
states that for enhancing the negotiating skills of people it is important to build a perceived value
in their minds regarding same. In addition all the aspects should be disclosed to the people about
the doing of the company. Thus in order to negotiate appropriately it is necessary to point of the
value and benefits of doing what you want to be accomplished (McAndrew, 2016).
In the situation where the discussions are made about the compensation, it should be considered
as an opportunity to inform staff and employees regarding their contributions and efforts made
for the growth which has been attained by the company. Noe, Hollenbeck, Gerhart and Wright,
(2017) specified that instead of just managing the incentive thing and leaving other discussions,
it is necessary to make employees believe to the extent employees are important for the company
and how their efforts made the company successful and competitive. Executives require being
truthful in order to represent their employees to know them their worth for the company’s
sustainable growth (Paquette, 2016 ).
In order to negotiate in effective manner, it is necessary that the conversation made with
employee regarding salary should be open and frank with the staff. An efficient attempt should
be made to convince employee through discussing their actual value for the company and the
fact that they are the base of growth which has been attained by company (Rojot, 2016).
Company doesn’t want to lose their expertise workers and team because of compensation, thus
specified efforts will assist the executives in convincing employees.

Conclusion
From the present study the company comes to the conclusion that they can’t afford loosing jack
lee from there company as he is the pillar of the company and also cannot be replaced by anyone.
Further, the fact cannot be denied that even though Jack cannot take microchip to the competitor
but he is capable that he would make something new for Work smart till the time company will
be seeking replacement of Jack Lee. It means that company will have to bear loss in case he
leaves, as presently no other employee can take his place and even the project of microchip will
also be delayed. On the other hand Jack will not have any significant impact on his future in case
he leaves the job. Thus, it is more appropriate for the company to make attempt to convince Jack
to accept the offer.
The owner of the company should organize a meeting with Jack and make him belief that he is
an asset for the company and made efficient efforts in order to gain success which is presently
attained by company. The approach relating to offer should be treated as collaboration and not a
fight (Walch, Mardyks and Schmitz, 2017). The discussion can be initiation by establishing
priorities as what is most important to you and what are you seeking for. Further, the actual
financial condition should also be explained to him so that he realizes the fact that company
knows his actual worth but to financial crisis, presently his request relating to increasing salary
cannot be accepted. He has been with company since he started his career, thus now he cannot
leave the same only due to issues relating to salary. Eventually owner should communicate the
final offer which can be provided to Jack i.e. 10% increment in salary and two percent of profit
when the project relating to microchip is completed. By this way the issue relating to negotiation
with Jack will get solved. The offer will not increase financial burden of the company as well as
small increment even in hard time will provide satisfaction to Jack that he will be provided
equivalent reward for which he is making efficient efforts.
As per the negotiation process company should make the decision that in current situation they
will compensate jack 10% extra from the salary he is receiving now and further the clip, that is
when work in progress comes into existence or launch, the profit that will obtained from chip
launch 2% of that profit will be provided to him. This will motivate the employee to stay within
the organization and as well will encourage them to achieve an extra profit in the future. Further,

the offer will not put additional burden on the company in a situation where it is not ready to take
enhances financial liabilities or expenses.

References
Artinger, S., Vulkan, N. & Shem-Tov, Y., (2015). Entrepreneurs’ negotiation behavior. Small
Business Economics, 44(4), pp.737-757.
Caputo, A., Ayoko, O. B., Amoo, N., & Menke, C. (2019). The relationship between cultural
values, cultural intelligence and negotiation styles. Journal of Business Research, 99, 23-36.
Forret, M., Balachandra, L., & Anand, S. (2018). Labor relations, employee relations and
negotiation. In Teaching Human Resource Management. Edward Elgar Publishing. United
States.
Fuller, R. P., & Putnam, L. L. (2016). Planning for a Negotiation. In Stretching Boundaries:
Cases in Organizational and Managerial Communication (pp. 161-166). Routledge. United
States.
McAndrew, I. (2016). Negotiation. In Encyclopedia of Human Resource Management. Edward
Elgar Publishing Limited.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Paquette, J., 2016. Cultural policy, work and identity: The creation, renewal and negotiation of
professional subjectivities. Routledge. United States.
Rojot, J. (2016). Negotiation: from theory to practice. Springer. United States.
Towns, A.E. & Aggestam, K., (2018). Gendering Diplomacy and International Negotiation.
Palgrave Macmillan. United States.
Walch, K. S., Mardyks, S. M., & Schmitz, J. (2017). Quantum Negotiation: The Art of Getting
what You Need. John Wiley & Sons. United States.