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The Pay Negotiation Activity
The Pay Negotiation Activity
The Task
This simulation is about pay negotiation.
You and another person must divide $2 between you today; what you get, the other
person loses. There may not be any side deals, or "paybacks tomorrow," or
circumventions of any other kind; this is straight, distributive (win/lose) bargaining.
Please follow the instructions, just for today, even if they are distasteful to you. Many
people like this kind of bargaining. Other people hate it. If you hate it, play it out
anyway and please tell me in the discussion how you feel about it. Remember,
please, no circumventions; please try very hard to follow your Secret Instructions in
each iteration of this simulation.
You will have specific, personal instructions with each new partner; they will be
different each time. You may not tell anyone else about these instructions until the
bargaining is over. Again, please follow the instructions as precisely as possible.
You will have a few minutes to consider strategy and tactics; please make notes as
to your plans and ideas about how you will bargain. Here are your questions:
What do you want here? What is your most optimistic hope? Your realistic
expectation? What will you settle for?
What does the other person probably want? How will you find out?
It is not possible to ask questions for more instructions; just do as well as you can.
Discussion 1
Remember from this weeks lecture we have been challenging the idea that pay can
be used to motivate performance:
1. How fair did you feel the negotiation activity was to decide who got the 2?
2. How satisfied were you with the amount of the 2 you were able to win?
3. How does the negotiation activity relate to performance related pay systems
in organisations?
In his seminal work, Six dangerous myths about pay, Pfeffer (1998: 117) reminds us
that:
in the typical individual-based merit pay system, the boss works with a raise budget thats
some percentage of the total salary budget for the unit. Its inherently a zero-sum process:
the more I get in my raise, the less is left for my colleagues.
Discussion 2
1. How do you feel about forced distribution schemes?
2. How does this approach to pay setting relate to the negotiation activity?
(Scullen et al 2005:1)
Summary Discussion
Further reading: