Lessons on Interest-Based

“LESSONS ON INTEREST-BASED

NEGOTIATIONS, PROBLEM SOLVING AND ORGANIZATIONAL CHANGE”

by MARIBETH KUSHON, Human Resources Manager, Foster City

Submitted to Madge Blakey, Program Director of the California Public Employer Labor Relations Association (CALPELRA) Labor Relations Academy for the Master of Labor

Relations Certificate

JUNE, 1997

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INITIAL EXPERIENCE WITH INTEREST-BASED NEGOTIATIONS

In the winter of 1995, San Mateo and Foster City began discussions around a potential fire department merger. A study was commissioned and while that research was being accomplished, both labor and management negotiating teams from both cities began to grapplewith a potential master labor agreement. San Mateo had increased success with theprevious fire agreement and promoted a new approach, “interest-based negotiations”, known as “IBN” as a process for bargaining. We were all aware that a fair and judicious agreement would be a major factor in the elected official’s decisions about the proposed merger.

Although the Foster City/San Mateo Fire merger did not happen for political reasons, FosterCitymanagement representatives were grateful for the opportunity to observe, learn andapply this new approach, considering it an outstanding alternative to traditional bargaining.Foster City had its bumps along the bargaining road but enjoyed overall satisfactorylabor relations up to this time. All the employee group agreements and plans happened to be approaching in the spring, which seemed like a monumental task before themanagement negotiating team in a few short months. A recommendation to provide thistraining opportunity to all bargaining representatives, managers and supervisors was madeby city management negotiators. City Council supported the idea and it was arranged.The first two days of “skills” training, and a day-long guided opportunity to “air” issues, feelings, miscommunications, misgivings and other baggage between the employeesand management (emotional “elephants”)were insightful. The expense of this training and the time and effort involved was undertaken in the hope of moving forward inasuccessful way with new agreements. It was also our hope that fostering a more collaborative future relationship in, and outside of the bargaining process would be of benefit.

The employee group representatives were motivated and agreed to use this model as a platform for negotiating the subsequent agreement. Even the unrepresented management andconfidential employees were participative in providing input to the city manager for recommendations on their compensation and benefits plans. Also encouraged was the useofthese problem solving skills in other areas of one’s work life to resolve other disputes,misunderstandings and communication difficulties that regularly seem to plague manyworkgroups and team members.

A significant amount of work, patience and time on the part of all the bargaining teams resultedin multi-year agreements. Lessons were learned about the importance of being organized, spending time judiciously and prudently, spending meeting time wisely, honoringtheprocess by checking each other’s skill levels, sticking to the agenda, making suretime commitments were met, and carefully recording agreements along the way. All inall,the bargaining process was much more constructive, meaningful, collaborative and interesting and the relationship-building process had begun. Not all employees understood howthe process worked, or felt their individual interests had been met or favorite option accepted. An observation that individuals understood, absorbed and applied the skills at differentrates, to different degrees and with varying abilities and skills turned out to be a keylesson down the line. Clearly some struggled with perspectives other than their own,
and had difficulty with the concept of “fair” and the use of “independent objective standards”.

On the other hand, some outstanding, creative benefit enhancements were implemented andmulti-year agreements were reached.

LESSONS LEARNED: IMPROVING THE IBN PROCESS

Many lessons were learned in retrospect after the initial bargaining season using interest-basednegotiations. One criticism of using this approach over traditional bargaining is the amount of time it takes. Open discussions, joint research and data-sharing and sub-committeeassignments can be seen and felt as cumbersome when the momentum and paceslows. Impatience and frustration can impede progress. Many say that this approach works fine on issues of working conditions but is more difficult to apply to compensation discussions. In our experience, a number of “deltas”, or things we could do better emerged forfuture improvement.

Expectations

Going into the bargaining process, it should be clear to all involved that using an interest- basedapproach is not “writing a blank check” or a commitment to meet all the interests of thebargaining partners. It does not disregard “bedrock” or basic business philosophies, theimportance of financial responsibility, or mean that reaching agreement will be easy. Eventhough everyone approached negotiations as a “team”, ultimately the elected body hastheresponsibility, authority and accountability to the public for any compensation and benefit changes agreed to in the process. Given this, the negotiating teams have to trust theprocess and work hard with their respective constituencies to find elegant solutions and promote agreement based on mutual interests. This can be a daunting task with elected officials as well as union memberships.

When it comes to compensation, arriving at a mutually acceptable notion of “fair” and “appropriate” was a challenging aspect for representatives, employees and the elected bodybecause of reliance on objective compensation data from the labor market. The potentialstill exists for disagreement about appropriate job classification comparisons and howto deal with the lack of appropriate comparisons should that occur. The process of mutually developing criteria for choosing other jurisdictions for job comparisons, thereby “defining” our labor market was an arduous process that was repeated with each employee group.

Approaching and Communicating with Constituency Groups

In traditional bargaining, the management negotiating team approaches the elected body inclosed session to discuss “parameters” or bargaining authority as the bargaining season approaches. A sense of the economic limitations, resources and political philosophies will usually emerge. Exploring and defining a compensation strategy in the beginning is a policymaking responsibility of the elected officials that must be tackled early in the process.Outlining and explaining the strategy or policy will serve to balance the
expectations and should not be seen as “positional”, but as a basic right and responsibility ofthegoverning body of any jurisdiction.

Labor representatives trying to work with their membership also typically discuss, list, surveyand define the group’s interests, points they want to address and issues they feel needattention and resolution. In previous negotiations, they begin with a long list of salary andbenefit enhancements that are really their favorite options that seem to meet their group’sinterests. Those same interests or needs could be met in other ways.

Using a traditional approach like this has a danger of generating “positional” responses and proposals that are really premature before having a thorough discussion of the problems theypropose to resolve. When a group of elected officials has preconceived notions of publiccompensation and agency competitiveness, or an employee group lists a number ofbenefit enhancements they desire, these are among the notions and options that can beresearched, discussed and explored once clearly defined problems have been established,but should not be encouraged as a first step. The methodology of identifying andprioritizing problems, uncovering interests and generating options to meet mutual interestscannot be “side-stepped” in an attempt to find the answer too quickly.

Another key to an effective process is how the negotiating teams maintain communications withtheir constituencies. The frequency of updates, meetings and explanations concerning theongoing process of negotiations are critical to mutual understanding, bargaining integrityand the acceptance of solutions by all parties. Those who are not directly involved inbargaining need to understand what’s being discussed and accomplished on their behalf throughout the process, not only when a proposed agreement has been reached. This requiresmore work on detailed presentations, explanations, support documentation and ofcourse, time. It also requires an ability to share the ‘other’ perspective as necessary to promoteunderstanding. This is a worthwhile effort and deserves attention. Once the agreement is in place, people need to know what they agreed to and how it benefits everyone concerned.

Timing

Advanced preparation reviewing the types of issues, grievances, complaints, performance problems and disputes is helpful. An ongoing working relationship or means of communicatingroutinely about issues will assist in the “storing” up of significant issues for thebargaining process. To expedite the process, each group may want to summarize the ongoing management/labor relationship, its strengths and weaknesses, accomplishments, difficulties, and address contract language or interpretation issues that need discussion andclarification for mutual understanding. Using a problem solving approach with employees,managers and supervisors to assure that all issues are identified is challenging andwill take some time.

Work with team members to outline an organized process for determining which issues are most critical and prioritize the rest. If there is research to be done to search for objective orindustry standards on issues, get started immediately.

If salary surveying is being done, begin the lengthy process of collecting and compiling dataassoon as possible to avoid delays in compensation discussions.

Ongoing Research and Support

Stay tuned in and listen to trends, alternatives, objective standards and creative solutions forawide variety of working conditions, compensation and labor market issues. Once bargaining is in progress, commitments to do research, make calls or prepare documents should be honored. If work is to be done outside the bargaining process to resolve problems,record successes and celebrate the productive outcomes. Support a culture of “ideageneration” and creativity that will reinforce some risk-taking and open-mindedness.

Important to the ongoing credibility of using these skills both at the bargaining table and in workplace problem solving is a commitment on the part of elected officials, management andemployees to continuing individual and group skill development. As we have learned inthepast, change is inevitable. A more guided change that addresses an ongoing need toreach agreements in any business environment involves considerable effort and diligencebuthas a resounding effect in terms of organizational change. Toward this end, additional basic skills training sessions have been offered to “widen” the group of trained employees and promote internal facilitation of problem solving efforts.

Another important aspect of ongoing support is in structuring a forum for addressing problemsas they occur, using participative and interest-based approaches. Whether this isafocus group, a quarterly status meeting with labor representatives, breakfast meetings withkey stewards or business agents, some commitment should be made to provide the opportunity for ongoing dialogue.

TRANSLATING SKILLS TO WORKPLACE PROBLEM SOLVING

Working to identify problems, listening and responding to interests and needs, communicatingclearly, striving to meet mutual interests and remaining open to collaborativesolutions has considerable potential in the larger picture of managing public business. Clearly, this philosophy must be supported by core values and beliefs of the organization and by top management. It will not be credible if ongoing communications, followthrough and respect are not happening. Elected officials, managers, supervisors andemployees are expected to “walk the talk” and are held accountable for their behavior, commitment and participation.

A commonly shared dilemma in public and private sector businesses among human resourcesprofessionals is how to appropriately address and resolve organizational problemsthat emerge again and again in the same departments, work groups or individuals.The underlying issues or feelings are sometimes very different than imagined, andover time a dysfunctional relationship can serve to undermine business objectives and interfere with service delivery. Issues of respect, fairness and consistency are sometimes buried underneath a presenting problem and are difficult to realize without frank discussion.Over time, underlying issues and disagreements are not resolved by denial, byapplying ‘band-aid’ solutions, or by unending circular discussions that defy resolution.

Investments of time and other resources will hopefully facilitate a gradual, transformational change in thinking and solving problems. The phrase, “be ‘hard’ on problems, ’easy’ on people”, focuses efforts on resolving workplace problems, rather than blaming others. Everyonehas been so accustomed and comfortable with placing blame and so well trained atquickly solving a problem, many interests and creative solutions may be overlooked for thesake of extinguishing the immediate fire. Ultimately, mending fences between people, crossing bridges of understanding and being open to constructive input has far-reaching effectsfor the organization. Many advantages are gained by spending the time recognizingproblems early and thoroughly, as we know that they can take on a “life of their own” and destroy trust and cooperation.

Disagreements, resentful attitudes, unsatisfactory work habits and behaviors that are counterproductive and resource-draining are an inevitable part of our work life. Heated discussions and situations that result in the bottom line of “agreeing to disagree” will still happen. We also know that the learning curve for using new communication tools can be somewhat unpredictable as individuals with varying degrees of ability sharpen and refine theirskills, or struggle with slipping back into positional behavior.

ORGANIZATIONAL CHANGE IN PROGRESS

In our organization, as with many others, management and employees wrestle with complaints,disputes and “people” problems. Our efforts to establish clear guidelines, realisticexpectations, sensible guidelines and procedures and positive labor relations are ongoing.

We have seen some successes. An example and possibly direct result of the changes that have taken place in the fire department is the fact that managers and labor representatives worked through the first advanced life support agreement so our first paramedic students couldbegin training. They also worked for a year on a comprehensive policy and proceduresmanual for the department, no easy task since it involved incorporating a numberofpreviously independent sets of documents into a comprehensive reference for allemployees and supervisors regarding operational issues and working conditions.

An organizational excellence committee continues to address a number of issues in the policedepartment. Team building with departments or units where problems have existed hasbeen done. A group of management/labor representatives meets quarterly to discuss operational and communication issues between public works and parks at the corporation yard.The channels of communication are opening for employees and supervisors to use amore rational, objective and fair approach in solving workplace problems.

This is not to say that the training and use of this approach is like waving a “magic wand” overthe complex problems and issues in business today. It is very difficult to employ these skills in situations where people are very positional. One of the biggest challenges in using theskills is overcoming the negativity of others, getting past the “nay-sayers” who doubt thevalidity of anything new or different. However, it does provide an excellent start in improvingtrust and enhancing communications between employees, management and electedofficials. It has the effect of promoting teamwork in solving problems and focusing onmutually acceptable solutions. Most people who have been through the training intuitivelyagree that using interest-based problem solving skills has potential and can be applied to many different situations. It may appear to be relatively easy to use these skills, butbreaking old habits of behavior and transitioning groups of people into a different way ofthinking and approaching problems is of course, more complicated than it seems and itdoestakes time and patience. It is not a “snap” fix for organizational problems but has longterm potential for organizational change by unfolding new ways of finding answers.

When you consider the significance of open communications, healthy working relationships,effective problem resolution and continuous improvement to the success of anybusiness, it is an essential responsibility of human resources professionals to seek waystofacilitate organizational change when needed. Whether approaching business problemsor contract negotiations, working effectively with people should be a part of the goaland is worth the time, effort and expense. Becoming more creative, inclusive and respectful of others will have many benefits. In our organization, embracing the interest-basedproblem solving approach has been challenging, rewarding and continues to make goodbusiness sense.

Acknowledgments:

John and Carol Glaser, exceptional educators and trainers from Yountville, California are appreciated for their genuine warmth and humanity. Their passion for teaching this approach and skills in facilitating learning are immediately apparent. Many of the IBN expressions and phrases referred to in this paper were coined and used by John and Carol in training. They can be contacted at (707) 944.2400.

Foster City Assistant City Manager Kristi Chappelle and City Manager Jim Hardy are acknowledged for having faithinthis approach, facilitating ongoing training and development and for their support of positive organizationalchange.

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