Thawing Salary Freeze | Labor Management Negotiations

Running head: THAWING SALARY FREEZE
THAWING SALARY FREEZE
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1. Introduction
Negotiation is a crucial part of business and is often done when dealing with an issue . It
refers to the process by which people settle the differences by means of reaching an
agreement or compromise while avoiding dispute and arguments. The case study scenario titled
“Thawing Salary Freeze” depicts a clear re-negotiation on labour demands and rights in between the
management and the labour force. The involved negotiators are an upper management executive of
JBL Publishing- Katherine Knudsen and Alisa Jackson, the union organiser and representative. This
report shall elaborate on stimulating a discussion regarding negotiation skills from the point of view
of Organisational Behaviour and Business Management. The main purpose of this report is to
present an overview on the process of labour management negotiations.
2. Discussion
2.1.Description of the case
In the give case, Alisa Jackson, the union organiser and representative, is re-negotiating the
contractual terms for the unionised labour workforce at JBL Publishing with Katherine Knudsen, the
Vice President of Production at the company. It is to mention that the company have a salary freeze
across the board. The renegotiation was concerning three key issues- 7percent increase in labour
wage, improved benefits packages and more flexibility. However, the main objective of the
negotiation is to finalise a 7percent hike in wage for the labours with seniority.
Katherine assured Alisa that she is improving the health package but the 7percent wage
increased has been rejected by the company as there is a salary freeze. The conflict rise when Alisa
addressed that prior to the meeting, she was only aware about the bonuses that were given to
executive board of the company but still the company is not willing to increase the wages. She stood
by her opinion and wanted to increase the wages for the union employees at any cost.
Katherine made it clear that the bonus amount was based on the company’s performance
but still Alisa was determined. Katherine even showed her the pay stub to prove her point. However,
Alisa claimed that the bonus matter is quite relevant to the wage increase that she is asking for and
she suggested that they should relocate the bonus amount so that the labours can receive of the
amount that is currently allocated. Finally, Katherine took a decision where she said that she can
formulate a distribution of bonus and that she can provide bonus to all the employees on the basis
of the company’s yearly revenue. The negotiation ended upon this agreement between the two.
2.2.What strategy should Katherine take?
Katherine should continuously clarify instead of changing the subject. She should clarify why
she is taking such decision. She should not change the subject as the entire negotiation process is
based on the very subject and if she changes it, it would look very unprofessional and Alisa might
think of her as a bad employer who does not care about the well-being of her workers. With the
same, apologizing for things that she have not done would make her look guilty.
2.3.Katherine is accused of lying. She should:
As it is clear that Katherine is lying and Alisa has understood the same, therefore, it is
important for Katherine to apologize immediately. It should be noted that apology has a great

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potential of disarming others of their anger and preventing further misunderstandings. Alisa seems
to be quite aggressive as she barely lets Katherine to give her justification. Katherine should not
refute the accusation as she will ultimately waste her time convincing her.
2.4.What does Katherine offer to show pay stub?
Katherine offered to show pay stub for proving the salary freeze. She have done so to make
it clear in front of Alisa that what she is saying is true and convince her that she is truthful from the
very beginning. With the same, another reason for showing the pay stub is to make it clear to Alisa
that why she could not do anything to increase the labour wage by 7percent.
2.5.What should Alisa argue?
Alisa in this case can ask Katherine to divide the bonus amount equally as there is no other
option available and it can be the best alternative for both the parties and can end up into a win and
win situation. With the same, she can also argue that if Katherine denies doing so, the union will go
into strike and this would not be an advantage for any parties involved. Therefore, the first option is
better.
2.6.Why didn’t Katherine offer this earlier?
Katherine finally offered a proposal in front of Alisa. She said that she can formulate a
distribution of bonus and that she can provide bonus to all the employees on the basis of the
company’s yearly revenue. However, she did not off this earlier as right from the very beginning,
Katherine was stonewalling. She did not want to give up her leverage point too soon and also,
Katherine had nothing else for offering Alisa. Therefore, she kept the point till the end.
2.7.In this negotiation
From the analysis of the negotiation process in between Alisa and Katherine it seems that the in the
negotiation JBL gave too little. For this reason, it is still unclear to Alisa that why there is no chance of
7percent wage increase for the senior workers. The final answer of Katherine was completely based
on the ultimate production and performance of the company in the previous year, which could be
better or worse, which further means that there is no guarantee of getting handsome money every
year. However, there was not anything else that Katherine can over to Alisa.
2.8. Final Thought
From the above analysis, it is clear that the main aim of the whole renegotiation process
between Katherine and Alisa is the betterment of the company and ensuring business profit. If
company gets earns good profit in the upcoming years, all the workers will be given good amount of
money and both the negotiating parties would be satisfied. Also, there would be no need of splitting
the bonuses or increasing in wages. With the same, another issue that was resolved what that there
would avoidance of union strike in the company, which would have been disadvantageous for both
the parties. However, I think that Alisa could have continuously accusing Katherine for being a liar
despite of seeing the pay stub as this would have made Katherine lose her interest in the negotiation
process. Also, Katherine should have avoided telling Alisa that she is more experienced than her and

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that she knows more than her as it would have made her uncomfortable and more determined of
making the decision in her favour in the ending.
3. Conclusion
Hence, it is to conclude that the negotiation process went well and is more in favour of the
company and the business than the workers. The key issues are health benefits, flexible working
schedule and increase in salary. Despite of the fact that executive board has got high bonuses for the
year, the company is not ready to increase wage for the senior workers. This makes the negotiation
process more complicated. However, Katherine, an upper management executive of the company
has proved that the bonus was based on performance and that there is a salary freeze in the
company. Finally, the negotiation process went well and the final decision that was made was a win
and win situation for both the parties.