The Bargaining Duel

1. Do you think the individual is always at the receiving end and the "bargaining power" is always shifted in favor of employer?

Not always. Individuals in an organization often use various means to achieve what they desire and can have the stronger hand in bargaining with the organization they work for.

2. Based on the email, what are your observations on "bargaining power" in the context of individual - organizational relationship? Would you be able to make similar non-negotiable offer to your employer in any point of time in your career?

Darrell Hair could make use of the bargaining power because he felt he was indispensable to the game of cricket because of his superior umpiring skills (though with fair share of controversies) and it was in ICC's best interests to retain him (might not be only because of his skills on the field but also the audience he might be managing to gather because of his association with endless controversies, a unique attribute not to be seen with other umpires in world cricket). Also the backing of a few countries in Darrell Hair's favor might have given him the courage to come out with this non negotiable offer. However, there could have very well been a mismatch in what Darrell Hair perceived his value was for ICC and what ICC perceived his value was. In the latter case we get into the legal side of affairs (employee retrenchment before the end of contract) which I am refraining from touching upon now.

The amount of bargaining power is directly related to the value an (individual) employee has for the organization making use of his services. If the skill set possessed by an employee is very rare to find in the market, the value of the employee goes up. Same is the case if an employee does a phenomenal job at his position and does it in a manner which might not be done by others even after having the same technical skill set, for e.g team leadership skills, communication skills. Greater this value, greater is the bargaining power. Having worked in the IT industry for sometime, I was able to witness first hand this bargaining power put to use by employees who weighed heavier in this value scale. Most common tactic is to offer the resignation letter if the demands of the employee are not met, using offers from other companies (same or different sector) to showcase the individual's demand in the market. This more or less always pays dividend in cases where the demands are not completely out of scope of the organization. Demands like a pay hike, on site opportunities, change of project fall under this category. Other is to offer resignation immediately after receiving a very highly valued and expensive domain knowledge, technical or processes related training from the organization. Employees also try to make use of information asymmetry to their advantage. Not sharing valuable information with others keeps the organization's dependency over the employee intact.

From a personal perspective, my employer was at the receiving end when I announced I had gotten through XIMB and had decided to join it. My line manager immediately gave me an incentive of expediting my on-site job opportunities if I was willing to let go of my decision. Even though i decided to go in with my decision, I certainly had the upper hand in this bargaining duel .

3. If you were to receive a similar one time non-negotiable offer from your employee, how would you handle this issue?

It all depends on how reasonable and deserving the demands of the employee are. If its unrealistic and undeserved, I would reject the offer. If I have enough reasons to substantiate my move, I will be able to hold my ground even if the employee seeks a legal action. If the employee is deserving enough and there is no loss to the organization, I would accept the offer. If the employee is deserving but makes an unrealistic demand, I would try to see that the employee does not get his demands fulfilled easily, for e.g, laying down conditions that the onsite opportunity would be available post the successful completion of a training and then increasing the level of training. Doing it in a way which would not make the employee feel tricked or cheated is the key.

Power can change the behaviour

Bargaining power could not be always in the hands of the employer. Depending on the situation and other external factors bargaining power may shift from employer to employee and vice versa. “The way forward” sent by Darrel Hair exemplifies the same.

As we can observe in the letter, Darrel Hair is offering “One time non negotiable offer” to its employer ICC. Darrel Hair is offering to step down from the elite panelist of umpires.

In case of Darrel hair it is worth noticing the fact that there was immense pressure from Asian cricketing countries to ban Mr. Hair. While countries like England, Australia and New Zealand were in favor of Mr. Hair.

What if ICC fires Mr. Hair without accepting his offer:
Umpiring is prone to human errors. It would be tough for ICC to prove that Darrel Hair was actually involved in such a malpractice. As he could argue that it was one bad day for him. Also much depends on the initial contract that was signed between the employee and the employer.

Mr. Hair would have filed litigation against the employer. Also the unrest caused among the cricketing countries would have tarnished ICC’s image and infuriated countries like Australia, England and New Zealand. Other umpires would also lose their confidence which could be detrimental for ICC.

Offering a non negotiable offer to employer:
In general, bargaining power may shift in to either the employer or the employee. This is pretty evident during the boom and the recessionary times. Also if a person has a rare skill or business knowledge which employer can’t do without then employee will always enjoy the bargaining power. If the perceived loss to the employer is more than what employee is asking than employer has no other option but to accept the offer.

Marketability of an employee banking on his rare skill could be affected if he/she was trying to be opportunistic. In such a case it could go against them. Contracts relating to employment may not be renewed. Top profile employees would find it difficult to get a new job if he was trying to be opportunistic.

Handling non negotiable offer from employee:
After thoroughly analyzing the situation, employer should judge the concerns raised by the employee. If the concerns are genuine then employer may consider accepting the offer.

How such a situation could be handled depends on multiple factors like:
1)Contract with the employees
2)Dependability on the employees and their knowledge
3)Ability to prove the charges in the court
4)Impact of the actions taken to meet such a situation

From Darrel Hair’s example, employers should learn the importance of the initial contract signed with the employees. The terms and condition in the contract should be made keeping this in mind. This should be done to retain the bargaining power.

Employer should also evaluate the dependability of such employee and aftermath of all the possible actions. Depending on such a situation, employer can select an option that best suits the employer. Different options available to employer are:

1) Accept the offer:
a.If the cause is genuine then the employer may accept the offer. To improve the goodwill among the employees.
2) Remove the employee without accepting the offer/ Do not accept the offer:
a.This should be done when the losses incurred in terms of money, reputation, confidence among other employees are less severe than the terms and condition of the offer.
3) Prove the charges against the employee:
a.If employer can prove the charges against the employee than same should be done to pacify the employee and reduce the chances of employee approaching the court.

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".

The fictitious reality

Sir, Whatever u told, I agree with only but only to an extent, not everything. If we look the actual scene/ circumstances and also the previous episode (test match before Oval one), then perhaps we can better arbiter. Judging by the past history of both Billy Doctrove and Darell Hair, inarguably, they have shown biased decision all against Asian nations. History testifies that. Throughout his umpiring career, Hair has been a controversial figure. The majority of the prominent incidents have involved Asian nations, leading to accusations of bias. In the previous test match number of faulty decisions like 1) Andrew staruss scored 116runs... was given not out twice by the racist umpire, at the time his score was less than 35runs,.Peterson nipps back the ball to keeper, Kamran Akmal by good length ball by Shahid Nazir when he was on score 32, but given not out by umpire. Peterson scored 135 runs, although he was out when he was on score 0 by a beautiful delivery by Mohammad Sami. Danish kaneria lbw collingwood twice, decison against Pakistan favour. Likewise there were 7-8 wrong decisions gone against Pakistan, before this disrepute Oval Test match. http://www.youtube.com/watch?v=hibiCasJP68&feature=related And as expected, the same streak had to continue in the Oval match as well, and that is what happened. Whatever Inzy had done, by going out of field, was correct thing................ before tea time umpire asked for replacement of ball. Inzamam questioned the decision of the umpire, to which umpire told that Inzy can look over the tampered ball in the referee’s room only and not on the field, that moment. After tea time was over, Pakistan team refused to come on field after seing that the ball was not tampered and refused to uphold the decision of the umpire. Also, spoke explicitly to media of the biased of umpire’s decision.. Although, coz of bringing the game to disrepute, and not because of tampering with the ball, Inzy was fined for 4 ODI matches. Equal punishment should be meted to umpire as well. But the adamant umpire, who had the back up from MCC, wrote letter to ICC, thinking that the decision will come to his favour. Although it did come finally to his favour on 1 February 2009 when the ICC reversed their earlier decision, and changed the match result back to a win for England ,all because of complying certain rules under which (MCC) released the statement "The ICC has no power under the laws of cricket to decide that results should be altered, whether it feels it's ‘inappropriate’ or otherwise”. ICC retort back to his letter,"He shall not be allowed to officiate in any future international games until the end of this contract [which ends in March 2008]", Percy Sonn, ICC President. http://www.youtube.com/watch?v=tElRT_RlrNU http://www.youtube.com/watch?v=UqWYSXz7Yfw&feature=related Hair had stated that the sum of US$500,000 was to be compensation for the four or more years he would have umpired for had this controversy not happened, which he claimed would be "the best years he had to offer international umpiring". Hair had previously suggested, however, in an April 2006 interview that he might give up umpiring at the end of the World Cup saying "I'm not so sure that after another 12 months I'll have the passion to keep enjoying it."
An important Law of cricket says that An Umpire shall be in breach of Clause 1.3 of the Code if he is found to have engaged in any of the following conduct and the penalties to be considered are the same as those set out in Clause C4 of the Code of Conduct for Players and Team Officials : One of them was as follows:
· Was a party to contriving or attempting to contrive the result of any Match or the occurrence of any Event;
Few other worth noting points regarding this:
· It shall be an implied condition in any contract, agreement, understanding or arrangement involving a Cricket Authority or a Home Board and an Umpire that the provisions of the Code shall be binding on such an Umpire and that his acceptance of an appointment to stand as an Umpire in any Test Match or ODI or to be a member of the international panel of Umpires established by ICC shall constitute his acceptance of his obligation to be bound by and his undertaking, directly with ICC as well as with the Home Board, to observe at all times the provisions of the Code.
· If there shall be any conflict between the provisions of the Code and the provisions of any code of conduct or similar regulation issued by any Cricket Authority, the provisions of the Code shall prevail and shall override any such code of conduct.
Thus, in any case, ICC carry authoritative rights to terminate the services of the Umpire on the reason as it may feel appropriate, and the umpire is binding on that decision.
Umpire's decisionAn umpire may alter his decision provided that such alteration is made promptly. This apart, an umpire's decision, once made, is final.
On enquiry from Inzy of the state of tampered ball, if the umpire had shown the condition of the ball then and there, probably umpire can alter his decision of granting 5runs to England. But the racist umpire asked Inzy to see the tampered ball in referee’s room.
Umpires awarding a match(a) A match shall be lost by a side whicheither (i) concedes defeator (ii) in the opinion of the umpires refuses to playand the umpires shall award the match to the other side.
(b) If an umpire considers that an action by any player or players might constitute a refusal by either side to play then the umpires together shall ascertain the cause of the action. If they then decide together that this action does constitute a refusal to play by one side, they shall so inform the captain of that side. If the captain persists in the action the umpires shall award the match in accordance with (a)(ii) above.
Even despite the above rules, flexibility of such rules has been seen time and again in the history of cricket. So, when Inzy returned to field 25 minutes later, 55 minutes after the umpires first took to the field for a resumption of play, but by then it was Hair and Doctrove themselves who refused to continue the game stating that the game had already ended with a Pakistani forfeiture the moment the bails were removed, even though both teams were willing to continue the match i.e. 55 min. after the tea time, umpire could have resumed the play.

Power as a bargaining tool...

The ability to bargain can be linked with the different kinds of powers that either the employee or the employer can exercise over the other. I am discussing a few of them below:-

· Expert power: When one perceives the other to possess some kind of expertise.

· Reward power: When one has the ability to control or grant rewards to the other.

· Legitimate power: When one has the lawful authority to influence the other.

· Coercive power: Power which one exercises over the other by the virtue of possessing the ability to punish.

· Referent power: Influence that one has over the other which is obtained from being well liked.

As has already been stated by Varun, the law of demand and supply governs the ability to bargain. However there are other aspects which can influence the ability to bargain.

One can pressurise the other by using tactics such as threats or forming coalitions in order to persuade. Also one can make promises to the other in order to make him comply. The negotiator can use rational persuasion and factual data to prove his point. Psychological tactics like improving the other persons mood by generating a favourable image or making an emotional appeal can also be used.

In this case Darell Hair has used Legitimate power as a bargaining tool. Even though the decision was a unique decision which had never been executed in over 1000 tests; there were different takes on the initial decision of granting England 5 runs for ball tampering. Nasser Hussain, Wasim Akram, Steve Waugh and many others severely criticised the decision. However, all 3 boards (PCB,ECB and ICC) later confirmed that the decision was in line with the laws of cricket.

Priyanka has explained how to deal with non negotiable offers and I believe that if the clauses of my contract permit me to, the opportunities available to me are better, my importance to the company is very high or my motivation of staying in the company is very low then I will be in a position to make such non negotiable offers.

Non-Negotiable Offer

Dear Participants,

So far, we have attempted to decode the themes "Contracted or Connected?" and "At Will, So Will" through Short Stories, Role Plays and Visual Episodes. These two themes helped to us to get inputs in the conceptual and knowledge part especially on the process of both "intent of offer" as well as "offer".

While discussing the story of IIT, Mumbai, some participants, like Saurabh Pandey (Section B), raised the issue related to "bargaining power" in the individual - organizational relationship context using the terms like "who is at the receiving end?".

Do you think the individual is always at the receiving end and the "bargaining power" is always shifted in favour of employer? If that is the case, go through the following one time "Non-Negotiable Offer" given by Darrel Hair, one of the high profile umpires, to his employer "International Cricket Council" following the ball tampering controversy in the fourth test between Pakistan and England in August 2006.

Based on the email, what are your observations on "bargaining power" in the context of individual - organizational relationship? Would you be able to make similar non-negotiable offer to your employer in any point of time in your career? Also, if you were to receive a similar one time non-negotiable offer from your employee, how would you handle this issue?
Your contribution on this interesting episode with reference to the above issues, but not limited to, is welcome!

With Regards,

Ganesh



From: Darrell Hair
Sent: Tuesday 22nd August 2006
To: Doug Cowie
Subject: The way forward

Doug, just to firm up what we discussed earlier this evening. I appreciate the ICC may be put in an untenable position with regards to future appointments and having taken considerable time and advice, I make this one-off, non-negotiable offer.

I am prepared to retire/stand down/relinquish my position on the elite panel to take effect from 31st August 2006 on the following terms:

1 - A one-off payment to compensate the loss of future earnings and retainer payment over the next four years which I believe would have been the best years I have to offer ICC and world umpiring. This payment is to be the sum of [US dollars] 500,000 - details of which must be kept confidential by both parties. This sum to be paid directly into my account by 31st August 2006.

2 - ICC may announce the retirement in any way they wish, but I would prefer a simple 'lifestyle choice' as this was the very reason I moved from Australia to settle in the UK three years ago.

3 - No public comment to be made by me as to possible reasons for the decision.

4 - This offer in no way precludes me taking legal action and/or instigating libel suits against various sections of the electronic and print media for comments made either previously or in the future.

5 - This in no way precludes me taking civil action (and exercising my rights as a resident of the UK in any court of law and by any other avenue open to me) against any organisation or persons currently part of ICC and in particular, members of the Pakistan cricket team and the Pakistan Cricket Board.

I reiterate this is a once only offer and if I fail to obtain your agreement I shall continue to be available under the terms of my current contract till March 31 2008 to fulfil umpiring appointments as and when ICC sees fit in any country at any time in any series or matches involving any affiliated teams.

I would also insist that my ongoing contracted employment continue in its current form until such time as an ICC performance assessment deems me to be no longer able to perform the duties to the high class expected of an international umpire.

Would you please let me know at your earliest convenience of your acceptance or otherwise of this offer.

Sincerely,

Darrell Hair.