Negotiation Simulation

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HRM 457 ILR Negotiation Simulation Assignment

Date: May 24, Wednesday

Location: In class

Participation: Participation in the Negotiation Simulation is mandatory. Failure to negotiate will result in a zero mark.

Value: 20% of final mark Number of

pages Individual or Team

Due Dates

By midnight

Marks (100)

% (20%)

Sec. A

Team Proposal & Team Introduction

3 Tables 1 page

Team May 17

40 (Team)

8% Final agreement

1 table per hotel

Team May. 25

Sec. B Pre- Negotiation Planning Book

2-4 pages Individual May 17 40


Sec. C Post- Negotiation Evaluation

1-2 pages Individual May 31 20 4%

Team Planning Book = Team Introduction (1 page) + 4 Individual PBs Team Proposal = 5 individual proposals and costs + total costs Email me your proposal, planning book and evaluation by midnight on the due dates. Late submission of proposal, planning book and evaluation will result in a penalty of 10% per day. Overview: The negotiation simulation is designed to simulate collective agreement negotiations between management and union in the service sector. A collective bargaining simulation in which small teams of union and management teams negotiate the terms of a new collective bargaining agreement using “The Zinnia and Service Workers Local H-56.” This exercise is on the Web at

Zinnia Hotel is located in Los Angeles. (NOT Minneapolis) Before this meeting, each team must construct a negotiation plan. Each negotiation plan should include a bargaining agenda which contains the team’s threat point (i.e., the minimum [maximum] acceptable contract changes the union [company] would accept without a strike) and also what the team reasonably hopes to settle for. Both economic and noneconomic items should be included in the agenda. Blank templates are available on the exercise’s website. Costs should be estimated for the economic items in the packages. These bargaining agendas are not binding during negotiations, but are used to facilitate preparation. To help with costing various proposals, an Excel spreadsheet is available on the website. Final agreements (Page 4 “final agreement” in the “proposal”) must be submitted by email by that time (

Issues to be Negotiated: Each team member must prepare and act as chief negotiator for one issue from the following list: Issues include: 1. Wages – Article 6 and Appendix A: Wage Rates

(Union / Management chief negotiator #1)

2. Vacations and Holidays – Article 13 &14 & Leaves of Absence (e.g., sick leave, maternity leave) – Article 12 (Union / Management chief negotiator #2)

3. Hours of Work, Overtime, and Premium Pay – Article 8

& Retirement – Article 20 (Union / Management chief negotiator #3)

4. Health Insurance – Article 18 &19 and Appendix C: Health and Welfare Schedule of Benefits & Other Benefits (e.g. life Insurance, accident and sickness disability, day care and dental insurance) (Union / Management chief negotiator #4)

5. Team negotiation topics (all negotiators / negotiator #5) 1) Subcontracting 2) Successor Clause 3) Immigrant Workers (protect or report) 4) Term of Agreement (i.e. proposed contract duration in years) – Article 23


Negotiating Teams: Each class will form negotiating teams of four. We need to end up with an even number of teams so some variance in team size may be necessary. Half the teams will represent management and the other half will represent the union. The primary focus of the Management Team is to negotiate a collective agreement that is satisfactory to the firm’s shareholders, to contain overall wage costs, to avoid a strike, and to arrive at an agreement that will contribute to the firm’s ongoing profitability. The primary focus of the Union Team is to negotiate a collective agreement that is satisfactory to the union members. The case in the text indicates the issues that are important to members. A strike or lockout is not an option. Failure to reach agreement on all terms by the end of the day will result in automatic a 10-mark penalty against all members of both teams. Presentation of Demand: Each team must submit their “Demand (Opening Position)” in writing to the professor and to the opposing team in class before negotiations on Mar 8, 2017. Proposals not exchanged on time will be subject to a 3-mark late penalty for the entire team.

Assignment Requirements: A. Proposal and Negotiation Planning Book Please download your 1. HRM 457 ILR Zinnia Negotiation Simulation Assignment 2. HRM 457 ILR Zinnia Corporate / Union Proposal Worksheets (Word template) 3. HRM 457 ILR Zinnia Planning Book (Word template) 4. HRM 457 ILR Zinnia Costing (Excel) Introduction The team will prepare an 1-page introduction together. This introduction will include:

• A statement and discussion of your overall strategic objectives for this negotiation. What are your priorities? What do you hope to achieve and why is this appropriate?

• A statement and discussion of how your will conduct the negotiations. What approach and tactics will you use to persuade your opponents? Why? What are the ground rules for negotiations?


Section A All team members will receive the same mark for the introduction, the proposal, and final agreement (1 page). (40 marks) Section B Each student will prepare individual arguments and demand parameters for his/her article (2-4 pages per person). Each section should include the following (40 marks): 1. A chart outlining the Opening Position, Target Position and Fall Back Position,

Estimation of Your Opponent’s Fall Back Position, and the Estimated Cost of Your Proposal

Summary Estimated Cost Justifications Demands (Opening Position):

Target Position (Desired settlement)

Fall Back Position (Threat Or Walkaway Point)

Opening Position: The initial proposal (Page 3 “demand (opening position)). An opening position can be extreme or more moderate. These are the first proposals you put on the table first and should be sufficiently realistic to avoid a loss of credibility on your part. Target Position – What the Company or Union hopes to achieve. This is what you should be able to attain assuming competent negotiations and the absence of unforeseen circumstances. (May be expressed as either a specific goal or a range). Fall Back Position The absolute maximum / minimum level the Company or Union will accept. Also known as the “threat or walk away” position. This is your bottom-line position beyond which you are unwilling to make further concessions. Having determined this position, you must consider how you will respond if this goal cannot be met. This is the first page of the proposal: “maximum settlement” for the management teams and “minimum settlement” for the union teams.


Estimated Cost Use the excel file “costing” to estimate the costs. A calculation of the costs or savings associated with your proposals must be included. This includes only your target position. In addition, a running total of costs should be kept throughout the negotiations. Note that some articles do not lend them self to costing and other articles may require that certain assumptions are made. 2. Justification for Your Position This is the critical part of your planning report. Why are your proposals fair and appropriate? This section should contain information, statistics, etc. that support your position on this particular issue. This is the ammunition you would use during the negotiations to convince your opponents that your position is justified and they must make concessions. This section also will contain your research, properly cited and referenced. Your Negotiation Planning Book must:

• Have one format • Contained in one book • Save in one document: “Zinnia Planning Book Management or Union

Team A, B or C” Due: At end of negotiations. Final Agreement (one per hotel) is due on May 25, 2017. Section C Post-Negotiation Individual Evaluation (1-2 pages per person) – 20 marks This is an individual report. Each student will prepare a summary of the negotiation, which includes the following: 1. For your clause:

• If you made any errors in your original planning book, this is your opportunity to make corrections

• What you set out to get, and what you actual got (chart format) • What you intended to argue, and what you actually argued • What you would have done differently to prepare for the negotiation of

your clause. •

2. Your observations about the bargaining process: • what you learned about yourself and others at the bargaining table • your strengths as a negotiator • your weaknesses as a negotiator • ideas on how you could improve as a negotiator

Due: Post-Negotiation Evaluation is due on May 31, 2017


Additional Instructions for Zinnia Negotiation Simulation

1. Make reasonable assumptions Please make reasonable assumptions and guesses (i.e. in your opinion, what would be reasonable changes for the hotel or workers), especially issue #3. Read the website information , your relevant articles in the contract, and your confidential union or management information. If you can’t find the information that you need, please make reasonable assumptions and include external references to support your justification. 2. Some proposed changes (e.g. work rules) may not lead to additional costs. For example, for issue #3, if your proposed changes to 8.10 work schedules or 8.15 discontinuance of business, you can report a $0 cost in your planning book. Include such proposed changes may help you in the negotiation.

3. Excel The blue numbers are proposed wages / days of vacation or holiday. For people working on these issues – #1 Wages and #3. Vocations and Holidays – you can simply change the relevant numbers to get your costs. Remember to check Appendix A Wage Rates.

For issue #1, assume the state minimum wage should be changed to $10 in the new contract. Change the wages of the five minimum wage jobs to $10 or $11.85 (310 Bell Captain) to estimate the total cost of changing minimum wage. For issue #2, use the vacation schedule and change (increase or decrease) the number of days or all or some employees. You can also use Additional Holidays / Sick Days for additional proposed changes. For issue #3, for example, you can change “new overtime premium” to 200 and check the additional proposed costs. This is a difficult issue, so please make reasonable assumptions and guesses (i.e. in your opinion, what would be a reasonable change for the hotel or workers).

For issue #4, this is the most difficult issue. Please focus on your confidential information and make reasonable assumptions. Remember to read Appendix C.

For issue #5,negotiator #5 must discuss with all other negotiators to determine the team negotiation priorities (i.e. the relative importance of the issues).

If your team consists of four negotiators, all team members should be prepared to negotiate issue #5 and discuss your position in the introduction. No need to write up issue #5 in the planning book.

4. Planning Book & Team Proposals Use the template- 3 HRM 457 ILR Zinnia Planning Book- for the planning book. This will be your talking points in the negotiation. For your individual section, you can use paragraphs or table (or both).

Summary is your proposed changes in the contract (e.g. 6.1 Pay Rate. … (proposed changes), 6.2 Merit Increase… etc.). Costs can be estimated using the excel cost file or making additional calculations based on the existing data (please explain in the justification). Justification is the most important part. It requires critical thinking. Some of you may choose to conduct external research. Please include a reference list in the end of your section. Your team proposal is the combination of all four individual issues. To calculate the total courses, you can use the excel file or simply add up the four costs. Each negotiator may take approximately 15-20 minutes. You may go back to earlier issues if you have additional time. You should also negotiate the contract duration and discuss the estimated annual costs as a team.


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Location: In class
Value: 20% of final mark
Issues to be Negotiated:
Negotiating Teams:
Assignment Requirements:
A. Proposal and Negotiation Planning Book
1. A chart outlining the Opening Position, Target Position and Fall Back Position, Estimation of Your Opponent’s Fall Back Position, and the Estimated Cost of Your Proposal
Target Position – What the Company or Union hopes to achieve.
Fall Back Position
Estimated Cost