Using a BATNA for Employment Negotiations compensation package

Trust Me: Identifying Optimal Compensation Packages

When Monroe Davies read Jim Hummer’s email offering him a dream job, his only concern was the need to identify appropriate elements for the position at Whole Health Management as well as mutually acceptable compensation package. From Monroe’s perspective, he knew that the job was his if he crafted his response carefully. Likewise, Monroe knew that Hummer placed a high priority on openness so he also knew this was no time to be modest about his abilities and expectations but he did not want to price himself out of a job either.

On the one hand, Monroe realized this was the offer of a lifetime. Not only was Hummer offering him the opportunity to essentially design his own job, he was also allowing him to assess his immediate worth to the organization. Moreover, Hummer was offering to serve as Monroe’s mentor besides his boss, and this job opportunity would help seal his future professional success. Just as importantly, Hummer was encouraging Monroe to not be shy in proposing a compensation package because he knew high rewards can translate into superior performance. In addition, Hummer wanted Monroe to take risks even if he failed because that was the path to rapid learning in a competitive marketplace. In other words, many aspiring MBA students might take this job without any compensation at all given its inestimable value to novice business practitioners.

Taken together, this once-in-a-lifetime job offer requires Monroe to develop his best alternative to negotiated agreement (BATNA). Developing an appropriate BATNA will help Monroe avoid settling for an unfavorable offer and empowers him to negotiate from a position of strength, aiming for a mutually acceptable compensation package and job elements. Developing a BATNA will require Monroe to determine the minimum threshold at which the various terms of the negotiation are mutually acceptable (Wheeler, 2003).