This role play is designed to help you develop your negotiating skills. The class is to break into pairs. One person will play the role of Terry, the department supervisor. The other person will play Dale, Terry's boss.
The Situation: Terry and Dale work for hockey-equipment manufacturer Bauer. Terry supervises a research laboratory.
Dale is the manager of research and development (R & D). Terry and Dale are former skaters who have worked for Bauer for more than 6 years. Dale has been Terry's boss for 2 years.
One of Terry's employees has greatly impressed Terry. This employee is Lisa Roland. Lisa was hired 11 months ago. She is 24 years old and holds a master's degree in mechanical engineering. Her entry-level salary was $52 500 a year. She was told by Terry that, in accordance with corporation policy, she would receive an initial performance evaluation at 6 months and a comprehensive review after 1 year. Based on her performance record, Lisa was told she could expect a salary adjustment at the time of the 1-year evaluation.
Terry's evaluation of Lisa after 6 months was very positive. Terry commented on the long hours Lisa was working, her cooperative spirit, the fact that others in the lab enjoyed working with her, and her immediate positive impact on the project to which she had been assigned. Now that Lisa's first anniversary is coming up, Terry has again reviewed Lisa's performance.
Terry thinks Lisa may be the best new person the R & D group has ever hired. After only a year, Terry has ranked Lisa as the number 3 performer in a department of 11.
Salaries in the department vary greatly. Terry, for instance, has a basic salary of $93 800, plus eligibility for a bonus that might add another $7000 to $11 000 a year. The salary range of the 11 department members is $42 500 to $79 000. The lowest salary is a recent hire with a bachelor's degree in physics. The two people that Terry has rated above Lisa earn base salaries of $73 800 and $78 900. They are both 27 years old and have been at Bauer for 3 and 4 years, respectively. The median salary in Terry's department is $65 300.

Terry's Role: You want to give Lisa a big raise. While she is young, she has proven to be an excellent addition to the department. You don't want to lose her. More important, she knows in general what other people in the department are earning, and she thinks she is underpaid. The company typically gives 1-year raises of 5 percent, although 10 percent is not unusual and 20 to 30 percent increases have been approved on occasion. You would like to get Lisa as large an increase as Dale will approve.
Dale's Role: All your supervisors typically try to squeeze you for as much money as they can for their people. You understand this because you did the same thing when you were a supervisor, but your boss wants to keep a lid on costs. He wants you to keep raises for recent hires generally in the range of 5 to 8 percent. In fact, he has sent a memo to all managers and supervisors stating this objective. However, your boss is also very concerned with equity and paying people what they are worth. You feel assured that he will support any salary recommendation you make, as long as it can be justified.
Your goal, consistent with cost reduction, is to keep salary increases as low as possible. The Negotiation: Terry has a meeting scheduled with Dale to discuss Lisa's performance review and salary adjustment. In your role of either Dale or Terry, take a couple of minutes to think through the facts in this exercise and to prepare a strategy. Determine what your target and resistance points are and what your BATNA is. Then you have up to 15 minutes to conduct your negotiation. When your negotiation is complete, the class will compare the various strategies used and the outcomes that resulted.