Based on the information given, please answer the question in bold.
To negotiate whether an employee should be retained or not, the CHRO can design the following line of judgement: Who: Attributes of the person being evaluated, whether they fit in with the core values of the organization or not. What: Skills of the person, i.e., specialized skills that can make a difference to the organization’s revenues should be considered.
Where; The geographical region in which they work and whether they are required there or not need to be evaluated. Why: Major cause for retention should be value-addition or potential for continued value addition to the organization.
How: Instead of using standard Key Performance Indicators (KPI), customized packages for valuable employees based on their unique contributions to the organization are a good place to start. “KPIs are intrinsically linked to a firm's strategic goals and are used to help managers assess whether they're on target as they work towards those goals (John, 2017)”. Since Netflix aims only at retaining A employees, managers at all levels should dedicate time to developing more A employees to keep adding value to the company.
As we see, the types of power the CHRO has for instance, with the positional power she can direct the company as per her own methods due to her designation. this power is very crucial as there are no HR policies in place, there must be a central figure who functions as the model figure to direct the HR functions of the company which usually work as per the model HR policies. Then the information power is where the employees coming in can expect to learn and look up to her as she has an in-depth understanding of the processes and clear about the path she wishes to take Netflix towards (Patty, 2014).
The Reward power adds to coercive power as Sharon has the power to retain a well performing employee as what is been envisaged by the company and with her power to take disciplinary action against anyone who isn't performing to the expectations, Sharon can strike the right balance of maintaining the best of talent. Sharon's people centric approach with her social power helps her exercise the above powers in the negotiation very smoothly as she can identify and select the best employees through negotiation and the incoming employee doesn't feel out of place.
Aiding to all these powers is her charismatic power which makes the employees listen to her, follow her advice or fear her for what she is rather than just her designation and hugely helps during negotiations as her exercising of any power doesn't come across as being impersonal or arrogant but a necessary action.
If an agreement is not reached, the CHRO should look outside for eligible candidates. BATNA stands for Best Alternative to a Negotiated Agreement. “BATNA, Best Alternative to a Negotiated Agreement term was introduced by Roger Fischer and William Ury in 1981. They proposed that, when negotiating a business agreement, we should work out, in the meantime, an alternative solution to the one currently discussed or agreed with the second party to the contract. This approach should secure us against signing an extremely adverse agreement or when the negotiation is unable to reach an acceptable goal by realizing an alternative approach (Seweryn, 2007)”. For this case the employees may choose to move to another organization where their specific skills will be valued more than at Netflix. ZOPA Zone of Possible Agreement for the CHRO is a probably an increase in perks or incentives that a valuable employee demands to stay back.
Netflix still seems to be working in a startup mode where the organizational culture is quite dynamic. Here every individual is expected to take ownership of his/her task and work independently for the best of the company and contribute constantly. This of course is how every company wishes of their employees but Netflix when it says it wants only the best of talent they are expecting them to start functioning and contributing from day one with not much emphasis on training or orientation which are usually part of the HR policies.
They even seem to be very indifferent of the employees leaving their company. When they say they don't want to put additional efforts in working with the remaining 3% and giving a chance for them to adjust to the new company and culture and that they would simply remove the people who they feel are not a right fit after hiring, shows their apathy towards humans as employees but just considering them as mere machines to do a task.
From what I have gathered so far about this case and the materials involved I have found behind all the organization's policy decisions lies with Sharon who happens to be the Chief Human Resources Officer. her decision is very important and the company wants to recruit only talented individuals in each department and expect A grade performance from each department they don’t believe that much in HR policies but they prefer to retain employees by negotiation (The Woman Behind the Netflix Culture, 2015).
The Company Chief Human Resources Officer Sharon is very talented and good at identifying top performers and talented employees. She does her best to retain talented employees by engaging in a severance negotiation. As discussed in the case, if an employee wants to leave the company, they retain that employee by negotiation. for example, Alice is an asset for the company as she has great knowledge of Excel, Sharon can reward Alice to stay back with Netflix to take advantage of her knowledge. Through negotiation, the company can retain good employees for organizational growth instead of investing in new recruitment and their training.
Five suggested recommendations for Sharon who will be re-evaluating Alice Jones are as follow;
At the end of the three-month PIP time frame given to Alice, if her performance is still not where they want to see it be, give Alice an additional sixty-day extension since she has been a loyal employee to Netflix. I believe that a ninety-day PIP plan is intense and reasonable for Smith to give to Alice, but Alice has also been a loyal employee and deserves an opportunity to reach those goals, hence the sixty days extension.
Follow up or monitor Alice’s performance during that sixty-day extension period on a weekly basis to see how things are going, and if they seem to be either improving or declining.
Based on what happens in the second recommendation, if Alice’s PIP is positive, continue to monitor her on a weekly basis, but if her PIP is negative and she still isn’t improving during that extension period, pair Alice up with another employee who has a better performance plan or request that Alice be given further training.
At this point, give Alive a verbal warning by letting her know that if things don’t improve after her extension period, they will have no other choice but to let her go and hire someone who can reach the goals that have been currently set for her.
Sharon Slade at this stage has already valued the time that Alice has been with them, and has given her an opportunity to improve her performance, but things didn’t work out, so it is time to now let Alice go and find someone who can produce the “A” results that Netflix wants.
ZOPA And BATNA For Alice
A brief definition of a ZOPA is “The zone of possible agreement is considered an area where two or more negotiating parties may find common ground. It is this area where parties will often compromise and strike a deal (Zone of Possible Agreement, n.d)”. ZOPA for Alice could be as follow; four months’ salary and incentives in lieu of notice, Exhaustive performance improvement plan with benchmarking against KPIs for 3 months, and Explore an alternative position at Netflix where her skills can be best utilized.
If Alice were to get fired, the following options would be unacceptable for her in a severance agreement: Agreement to refrain from joining Netflix’s close competitors for the next one year or more, and Accept the salary of two months’ or less in lieu of notice period. She should at least seek for a salary of four months.
Alice could offer the following options that could move severance negotiations toward her goal of keeping her position at Netflix; A salary and incentive plan for six months in lieu of notice, and Exhaustive performance improvement plan with benchmarking against KPIs for 4 months.
As for a BATNA for Alice, I find the following being an option; Alice could move the court in case of conflict and unmet conditions, look alternative job options, where she can assimilate with the culture and is respected for her skills, and Apply for a course with some renowned university.
Questions:
A. Formulate appropriate phrasing for the CHRO’s opening remarks that separate the people from the problems. Your phrasing must be based on principled negotiation practices.
B. Identify case-specific negotiating positions and rephrase them as interests. In other words, Sharon Slade and Alice Jones’ ZOPA and BATNA positions should be referred to as case-specific negotiating interests. For example, one of Alice Jones’ possible ZOPA positions may be to obtain a 52-week severance package, during which her compensation and benefits continue through the severance period. This can be rephrased as an interest by adding Alice Jones’ rationale for this position: 52 weeks of severance allows for adequate time to find a comparable position as well as time for her family to relocate to a new geographic region. You have the option of using a table to illustrate each position and the appropriate rephrased interest (one row per position-interest).
C. Recommend options that can appropriately address the parties’ integrative interests. You will want to use the open, closed, alternative, and leading questions developed in the Module Five assignment to craft an integrative bargaining proposal. Feel free to consider potential creative options that may not be as common.
D. Identify objective criteria that can be used to measure distributive elements of the negotiation. Explain the reasoning for your choices.