Collective Agreement Simulation Evaluation

Collective Agreement Simulation Evaluation

1. Describe your position: (Union, Employer, Conciliator group 1 or group 2)

My team was the employer in Group 1.

2. What were the main reasons that an agreement was reached/not reached?

The main reason that an agreement was finally reached was because we agreed not to cut the staff by 25% as we had originally proposed. In our initial offer, we had laid off 12 employees and offered very generous packages to 18 employees. This seemed to be a big concern for the union team. They wanted to keep the job losses down to 10% vs. our 25% cuts. They also wanted job security for the remaining employees, which we did agree to. Had we continued to push with our original numbers for job cuts, an agreement would not have been reached.

3. Who in your opinion won the negotiation? Explain.

I believe the union team won the negotiation because now that I have simulated the agreement in the spreadsheet, Business Windows Inc. is at a loss over the four year collective agreement. Also, the only demand that they did not get was the salary increase that they had requested. They had originally requested an 18% increase over the four years, with a 12% increase occurring in the first year. This high of an increase is typically unheard of. I think they came in with an extremely high request knowing that they would have settled for something much lower than that. With regards to all their other demands (cut all overtime hours, add health care plan, keep job losses down to 10% of employees and add extra holidays), the management team gave them all that they requested. The only demand that they ceded was the increase in pension. It was agreed upon by both teams to leave the pension at 6%.

4. Describe the 3 main things that you have learned from the simulation.

One thing I have learned from the simulation is that it is extremely difficult to make smart decisions under pressure. Having only limited time to make decisions that will impact the bottom line of a company was not easy. Secondly, I learned that the union will come in with very high demands and it is the job of management to make sure that those demands are kept realistic. I realized during this exercise that, at first ,we gave in to most of the union’s demands but when we, the management team, remained firm and refused to give in on the salary increases, the union ceded. Had we remained firm with some other demands, the agreement could have been in our favor. Lastly, I learned that negotiations such as these can really impact the human resource costs of a business and can make a substantial difference with regards to whether or not a business comes out with a profit. We began the negotiations with an offer that had Business Windows showing a decent profit but once the agreement was reached, that profit was no longer there.