Interest Based Bargaining

Interest-based bargaining, also called preventive mediation, is an attempt to move labor and management from traditional confrontational and positional bargaining to problem-solving bargaining. The interest-based bargaining approach is centered on jointly identifying issues and exploring the different possible solutions. The parties are encouraged to work together to find solutions to each other's problems. They do not come to the bargaining table with proposals as in traditional bargaining. Instead, they present problems to be solved and work together to seek solutions.

Characteristics of Interest-Based Bargaining

Interest-based bargaining is somewhat like playing poker with your hand totally exposed. Techniques, such as bluffing, posturing, withholding information and packaging proposals are not used. Instead of each side submitting initial proposals as in traditional bargaining, the parties develop and submit clearly defined problems that they will solve together.

In traditional bargaining the parties submit proposals based on their solutions to problems that they identified and 'solved' independently of the other. This preparation of initial proposals is done before the parties have even met with each other.

In interest based bargaining the parties identify problems that need to be resolved. Together, they offer and consider many possible solutions. From those options, they select a mutually acceptable solution to each problem. The acceptable solution will give both parties something. Instead of advocating for the acceptance of their own proposed solutions, they are working together to solve their problems. In this way, both parties are winners.

Key Concepts

Issues. The fundamental focus of interest-based bargaining is on the issues, that is, the problems to be solved by the parties. The issues are presented as questions rather than answers. The questions are refined to represent the root cause of the problem.

  • Example- Chronically ill senior employees who exceed their accumulated sick leave lose pay.
  • Correct issue: "Should we protect the income of chronically ill employees who exceed accumulated sick leave? If the answer is yes, how?"
  • Wrong issue: "How do we provide additional sick leave to employees?"

The first question tells us that the root cause of the problem relates to a specific group of employees, and asks if something should be done. If the parties agree to solve the problem, the second part of the question seeks many possible solutions.

The second question, however, neither defines the issue nor specifies the group. Instead, the question assumes that additional sick leave should be provided to all employees, regardless of need.

Interests. The interests of interest-based bargaining are the reasons why each party wants to solve a problem. Both parties may want to solve the problem for different reasons, but the need to solve it is the motivation for them to act.

Example: The union's interest in providing the additional sick leave is to protect the income of employees, a basic union purpose. The employer's interest may be to retain loyal and long-term employees.

Options. Options are the possible solutions to each problem.

Examples: Employees may donate some of their personal accumulated sick leave to the chronically ill employees. The employer may provide short term disability insurance. They may set up a sick leave bank. Employees may borrow sick leave in advance of earning it. Employees may receive half pay while on leave beyond accumulated sick leave.

Standards. Standards are the rules for measuring the acceptability of each option. The option that satisfies most of the standards is accepted. In labor relations, objective standards are difficult to develop. The usual standards of fairness, equity, etc., cannot be measured objectively. It is important, therefore, that the participants share what each standard means to them, individually.

Examples:

  • Improves labor/management relations.
  • Increases productivity.
  • Is affordable.
  • Will be accepted by the parties' memberships.
  • Is equitable.
  • Is fair.

For more detailed information on interest-based bargaining, see these additional pages: