| The Bargaining Zone - Text Alternative |
 Go Back to the Previous Page
In collective bargaining, both labor and management realize that their counterparts will not completely agree on their ideas for a perfect settlement.
Therefore, both sides will prioritize potential settlements along a range of acceptable and unacceptable positions. This gives both parties room for negotiation. For any given issue, negotiators for both parties target two limits: the position most favorable to their party and the position that is least acceptable. The space between these two positions represents the bargaining range -- the area in which a settlement is possible.
As both management and the union are driven by different factors, each side will have their own upper and lower limits. They do not share this information directly with one another.
The bargaining zone is the area where each side’s bargaining range overlaps, and is the area in which agreement is possible. Through the bargaining process, negotiators for each side need to determine the other’s party’s likely bargaining range, whether the ranges overlap, and if so, how best to maximize a settlement for their party within the bargaining zone. For example, management’s bargaining range for a wage increase is 1% to 6%. The union’s range is 4% to 10%. So the bargaining zone is between 4% and 6%.
If an offer extends past either side’s limits, the settlement is unacceptable and the negotiation is in danger of breaking down. Of course, both parties are able to modify their range of acceptable and unacceptable offers, and often will do so to avoid strikes and lockouts.
Keep in mind, that any contract negotiation can have hundreds of these bargaining issues. While each issue will have its own range, they are rarely determined in isolation of the other issues. Consider a second issue of employee sick leave. Management’s position ranges between 2 and 8 days, while the union’s position is 5 to 13 days. This means the bargaining zone is between 5 and 8 days. However, if the parties both agree to the lower end of the wage settlement, the union may not settle for anything less than 10 additional sick leave days, throwing the sick leave issue out of the bargaining zone.
Thus, negotiating on any particular issue will have a “give-or-take” effect on the other bargaining issues. It is very important to view bargaining as a whole, because a concession on one issue may knock a settlement on another issue out of the bargaining zone.
Go Back to the Previous Page
| 
