Sunday, January 10, 2010

The Bargaining Power keeps Shifting...

I would be answering each question one by one...
Do you think the individual is always at the receiving end and the "bargaining power" is always shifted in favour of employer?
1) I believe the bargaining power is not always shifted in favour of the employer. The employee gets his power based on many factors, which are his expertise in the field, the demand for him in different organizations, power from a relation with a highly influential personality/country, blackmailing power (in case of non-provable allegations) etc.

In the Darrell Hair case, he being the employee of ICC exercised all these power techniques. His years of experience in the field and his success in umpiring over the years made it easy for him to write such an email. Darrell Hair also went on record saying that he was being targeted over the years by ICC and accepted that his decisions might be wrong in one match but it was not done intentionally. The primary function using his power was acting in his own self interest.

Based on the email, what are your observations on "bargaining power" in the context of individual - organizational relationship?
2) There was always been an inequality of bargaining power in many employment relationships. Employment relations can be undermined by poor communication and if the employee and the employer interests are not in the same direction. Bargaining power determines the position that can be adopted by a party after all talks for convincing one other party have failed.

Would you be able to make similar non-negotiable offer to your employer in any point of time in your career?
3) I might be able to make similar non-negotiable offer to organizations only if i feel the expertise that i have is scarce and very important for the organization and its not been valued as i see it.
For example, at my experience in L&T, there was a huge demand for computational Fluid Dynamics engineers and Defence Automation in Army projects. After the fluid flow diagrams and circuit design of one of the projects was done, two M. Tech wanted to leave the organization due to better offers from other companies. When L&T recognized that the design was mostly known to these two employees, they negotiated and offered them a high compensation because the cost of them leaving would be very high to the organization. This can be referred to as expert power (as pointed out by Ketan).

Another reason i would make such a non-negotiable offer would be if some false allegations are being made by my company on me. If i feel, these cannot be proved by the organization, i would rather go ahead making such a non-negotiable offer. (considering i am able to prove the same and years of experience to back up the same)

If you were to receive a similar one time non-negotiable offer from your employee, how would you handle this issue?
4) If i were to recieve a similar one time non-negotiable offer from an employee, handling this issue would be based on the following:
Its credibility: The credibility of a bargaining powere depends whether i perceive the power to be real and if his power can be used in support of a bargaining commitment. It is not the total bargaining power that is important in the negotiating process but the 'area of imbalance' between the two sides in the bargaining relationship.

If the costs and the future loss to the organization is less even if i have to agree to my employee's negotiation and if my organization's image is at stake which can cause a huge future loss, i would rather go ahead agreeing to employee's negotiation.

It is obvious that there is an unequal bargaining power between employees and employee. This is due to the reason that an employer hires a lot of employees. The loss of a single employee to a big employer is only a slight loss. But for employee, his job is usually his only source of income. Losing his job is the biggest thing that can happen to him.

With more and more competition for getting a job and lesser employment opportunities created, the bargaining power has slightly shifted towards the employers. It is only in case
of some specialized jobs that the power rests with the employees.

I would like to end it with a quote by Ralph Waldo Emerson: "Before we acquire great (bargaining)power, we must acquire wisdom to use it well".

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