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Negotiating Money Issues

This article was previously published by CFIER.

In the course of responding to inquiries about the use of an interest-based approach in negotiations, I was confronted with a number of assertions, one of which went something like this: “This stuff might be okay for most things in labor relations, but it will never work on money issues!” My response was that in all the negotiations that I have facilitated over the past three years, I’ve yet to see the process NOT work on money issues!

The idea that the interest process will break down when applied to money issues is, in my view, a misconception that is relegated to the category of myth each time I see people reach satisfactory financial agreements. So let’s take a look at why it’s just that, a misconception.


The misconception likely develops from the presence of other factors not related to money at all. These factors can cause trouble that could wrongly be blamed on an attempt to negotiate money issues. The first of these contributing factors might be the collapse of the process when the practitioners fail to carefully separate out the relationship issues from the substantive issues, with the resulting failure to deal with and resolve those relationship issues. This breakdown usually results in the placing of a heavy burden on issues of substance—all messages and interactions on money issues become highly charged with the need to address matters of relationship.

This is often seen in financial demands being used to communicate needs for acknowledgment and acceptance or for trust of commitment and hard work as compensation for not being well treated in some way. It also occurs when the intended message is that there is a lack of trust in financial numbers being relied upon because of how the data was compiled and maintained. Response to demands of this nature are often of the “back at ya” type and the negotiations degenerate into being positional.

The process of negotiating money can also collapse when the parties have a relationship issue of a different nature: For fear of damaging a positive relationship they are building, they engage in behaviors which avoid financial issues, or which do not accurately or adequately meet the interests of the constituencies of one or both parties. Constituency reactions are almost predictable: employee organization members want to throw their negotiators out while boards, county offices and the public threaten to take over the reins, start their own schools or tighten the strings further.

Un-Learning & Re-Learning Are Needed

Another contributing factor is that frequently the parties may not allow an adequate amount of time for the learning curve to take hold. There is probably more to unlearn than to learn when it comes to using an interest approach. Unfortunately, even when the parties
are committed using an interest based process, habitual negotiators engage in positional thinking “au natural” and slip into positional bargaining almost by default. This lack of an adequate acquaintanceship with the new approach causes anxiety and recrimination among the parties. Those among them who discounted the interest approach all along relish being able to say see, “I told you so” and happily embrace the positional behaviors and language.

The lack of being creative and adequately brainstorming is another contributing factor. Despite our efforts in training and use of facilitation techniques to stimulate thinking “out of the box,” there seems to he a cultural barrier to being creative. I cannot tell you, for having given up counting the occasions, how many times all that the parties needed to do was a little more brainstorming! Far too frequently the process collapses because after one or two options have dribbled out in the negotiations, the parties look at each other and say “now what?”

Related to this factor is the behavior by the parties of “saving the hard part for last”, meaning that they negotiate and settle everything else and then turn to the monetary issues. This creates a self-fulfilling prophesy because they’ve tied their hands and become boxed in by not leaving themselves anywhere to go with creative solutions to operational issues which could address interests around compensation.


Following are some pointers on the interest-based process that should help avoid problems in the negotiation of substantive issues.

In order to avoid the collapse of the process it is imperative that the parties separate the substantive issues from the relationship issues. This approach helps clarify the messages and allows the parties to address what’s not working in the relationship and thereby improve communication, trust or partnership rifts. Substantive issues can then be dealt with on their merit rather than being weighted down with the impossible burden of conveying hidden messages about feelings and the relationship. So many times I have seen parties wake up to this fact, surface and resolve their relationship issues, and then to their amazement, tackle and resolve issues of substance quite rapidly.

Telling the story is a critical step in the interest process, and will support successful negotiation of money issues. This describing of the problem (opportunity) takes a lot of time, might seem boring and may feel like you’re not getting anywhere, but it is vital to dispelling the assumptions that the other side views the world as you do. An adequate grasp of the situation is a must for success. This involves jointly determining what information and data are needed, jointly gathering and assembling the required information, being aware of the perspective of the other party and developing a
common understanding around the data. Time spent up front describing the situation is time well spent in crafting solutions around compensation interests.

It is key, also, to be aware of and honest with your interests. Breakdowns can happen either when an important interest is not presented or when a real interest is concealed. The former occurs when a particular constituency group is not represented on the team or has otherwise failed to make its interest known; the latter occurs when a party is embarrassed to present a true interest! (For example, if saving jobs is presented as more important than a negative impact of paychecks when the reverse may be true.) When interests are missing or misrepresented, solutions may be impossible to achieve. Or if a solution is crafted, it will miss the mark and either risk rejection by the constituency or contribute to an unstable agreement.

The creative brainstorming process is the interest negotiator’s best friend. It helps the parties find those options and criteria which solve the problem and meet the parties interests. Most solutions to the money issues I’ve seen come as a surprise to both parties, are unanticipated, creative and rational.

Importantly, the most creative efforts are those which are jointly pursued from the beginning of the process. Successful interest negotiators abandon the “what we can give” and “what can we get” mind frame. This is not just a conscious choice of language used but also a result of the actual use of the principles through joint data gathering, interest exploration, option building and searching for mutual gain.


Over the years, some of the solutions I’ve seen for money issues are listed below. In reviewing these options, it is very important to note that there is no “right” way. There is danger in assuming that something will never work or always work. The only test is: Does the solution meet the interests of the concerned stakeholders.

  • Pay and benefit contributions cut in order to maintain salary schedules, jobs and benefit levels; or conversely, layoffs mutually agreed to in order to meet compensation interests of minimal impact on paychecks for remaining employees;
  • Predetermined formulas adjusted to accurately reflect economic changes and shifts in benchmarks, in order to distribute available revenue fairly;
  • Fundamental operational changes that cost some money but added nothing to anyone’s paycheck, in order to meet professional interests with limited funds;
  • Relationship issues of communication and acceptance addressed head on in order to avoid mixed messages and worsening relationships by pretending that money can buy a friend or overcome an insult;
  • Joint negotiation with certificated, classified and management to insure all interests are covered;
  • Genuinely joint budgetary and strategic planning processes designed and initiated to prepare for a predicted future of austerity and hostile economic conditions;
  • New and creative solutions to bussing in order to maintain class size language, and save money that was allocated to benefit compensation;
  • Strong efforts to involve and inform constituent groups before and during negotiations, in order to make sure real interests are being met;
  • Much greater attention paid to creating and sharing accurate and complete financial data that all parties felt they could trust. This has even included jointly sponsored audit procedures that brought in a neutral expert to help the parties sort out money issues and craft objective standards;
  • Many efforts which challenge old paradigms regarding health benefits, and involve exploration of wider options to meet health care needs;
  • Employee run operations in order to avoid contracting out.


Steve Barber

Steve Barber has been a pioneer in the introduction of non-adversarial negotiations and communications to the public and private sector labor and policy negotiations. Barber has served as the aide to state legislators, a deputy director in California’s Health and Welfare Agency, and as the deputy director of the Public… MORE >

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