Read the following article materials, how to negotiate to maximize the benefits of this negotiation, please give the plan and explanation

SUNSET HOTELS

General Information & Confidential Information for Blaire Morton, VP of Information Services

Sunset Hotels are a chain of moderately priced 100-300 unit hotels up and down the West Coast of North America. Currently, there are 50 hotels in the chain, up from just 20 hotels 10 years ago. Corporate plans include expanding the chain to 100 hotels in the next ten years, moving eastward into the Rocky Mountain States. Sunset Hotels are known for scenic locations, primarily in resort towns such as Cannon Beach, Oregon, Bodega Bay, California, Monterey, California, and Ocean Shores, Washington. Recently the chain has expanded into major cities on the West Coast, including San Diego, San Francisco, Portland, Seattle, and Vancouver B.C. The Corporate office is located in Seattle.

The Sunset chain reached the size a few years ago where it made sense to computerize the reservation system along with other hotel and corporate office functions such that all hotels are tied into the same computer information system. Recent advances in wide-area-network (WAN ) and local-area-network (LAN) technologies have made such systems more readily available and inexpensive. Other hotel chains have adopted these technologies years ago. To Sunset's slight embarrassment, Sunset has only recently adopted these technologies.

Five years ago, Sunset hired Dana Svenson to come in and set up both a corporate network and a reservation system. After three years, Dana had set up a UNIX (a brand of operating system software) based network for the corporate offices, and reservation systems for the individual hotel properties. However, Dana never successfully devised a centralized reservation system that would allow a caller to reserve a room at any Sunset property. In addition, many users found the corporate network too hard to use, even though most of the technical staff praised the system's capabilities. Two years ago, Dana resigned from Sunset Hotels, and the current head of Information Systems, Blaire Morton, age 45, took over. In Blaire's two years, the computing staff has grown and has set up a centralized reservation system (known as C-RES).

Right now C-RES is finishing its pilot program in ten of the hotels. So far, the results do not look very good. C-RES has a number of problems in its design. Hotel reservation staffs have become very frustrated. For one thing , using C-RES has led to an unacceptable number of over-bookings. During periods of high demand, such as when hosting a convention, C-RES slows down too much. It takes far too long from the time at which the reservationist enters a reservation for a particular room to the time that room is then blocked out. This can lead to other reservationists trying to reserve it for the same time.

To make the C-RES project work, Sunset and Blaire Morton are looking to enlarge and enhance their information staff of 20 computer programmers and technicians by searching for new staff members. As part of this search, they have had two interviews with a bright, young candidate by the name of Kelley Green. Kelley graduated two years ago with a Bachelor of Science degree from the Management of Information Systems (MIS) group at the University of Arizona, which is considered among the best MIS groups in the country. There Kelley specialized in designing networks that used multiple operating systems. Kelley is proficient in different operating systems including UNIX, Windows, and Macintosh. While at the university, Kelley took advantage of its high-speed connections to the internet and is extremely proficient as a web programmer and security expert. To earn tuition for college, Kelley worked for a small hotel chain every summer as a reservations clerk, and then spent the last summer at c ollege updating the hotel's computer systems.

Kelley has spent the last two years working for an MIS consulting firm (See Kelley's resume). While working there, Kelley assisted in diagnosing system problems for clients. Kelley's greatest achievements are securely linking together a real estate company's widely dispersed offices with local and wide area networks, using Ethernet, dedicated phone lines, and internet.

The first interview was conducted through the Human Resources group two weeks ago. The second interview occurred yesterday. It was an all-day interview where Kelley met all of the information systems staff. Lots of information was exchanged regarding the job and Kelley's qualifications, but everybody avoided open discussion of salary and benefits. Both parties are now ready to discuss terms of a potential job offer.

Confidential Information for Blaire Morton

Within your first year, you doubled your staff from 10 to 20 programmers and technicians. You also negotiated your own promotion from "Director of Corporate Systems" to "Vice-President of Information Systems". Although the jobs are exactly the same--i.e. , require the same tasks and the supervision of the same staff--by carrying the VP title, you are entitled to a few extra privileges. First, your salary jumped from $160,000 to $240,000. Second, you received a generous stock option, currently valued at $100,000. Third, you back negotiated a $35,000 signing bonus. Fourth, and perhaps most importantly to you, you gained direct access to the Corporate CEO, Randy Bennington -- no longer must you report through the VP of Communications, Tracy Juarez. Besides the extra status, you simply like consorting with important, powerful, and famous people.

In general, you like a luxurious lifestyle. You bought a condominium in downtown Seattle above the Pike Place Market -- one of the trendiest places to live within the Seattle city limits -- with a spectacular view of Puget Sound. You lease a new luxury car every 2 years. Your most recent car is a 2021 top-of-the-line Lexus. You always dress sharply in Armani suits and Italian ties. Rarely do you arrive at work in less than $3,000 worth of clothing. (They know you at Nordstrom's clothing store.) You had your office decorated by a professional interior decorator. It displays your fine taste in rare woods and soft leathers.

Your collection of artwork, diplomas, awards and periodicals impresses those who sit in your office. Of all your wall decorations, you most hope they notice the slogan you had framed, which reads "Compromise is for politicians." Your office decoration serves two goals of yours: 1) Project power and success 2) Defy some people's stereotypes of information systems types as socially unsophisticated

Everything about your appearance and demeanor projects power. You like it that way. In your off-hours, you attend many of Seattle's high profile social functions, knowing that the acquaintances you make enhance your social network. Someday, soon preferably, you hope to rise to CEO of this or another company. Note: you may want to prepare "props" for this negotiation so that your power and prestige are appropriately conveyed to the negotiator who plays Kelley Green.

Randy Bennington is a hard CEO to work for. He is very results-oriented, task-focused, and shows little concern for interpersonal relationships. You have tried to befriend him, but have been ignored on a social level. Few people like Randy, but his success with Sunset Hotels is hard to deny. You suspect that Randy does not like you, especially after you tried to ingratiate yourself to him. Nevertheless, as long as you develop and maintain smooth running reservation and corporate information systems, your job is assured. You really want to keep your job, at least for the near future.

It is known inside the company that your predecessor, Dana Svenson, did not resign. Dana's resignation was a formality: Randy fired Dana because Dana did not produce a centralized reservation system. Not that Randy had always wanted such a system, but just that he noticed that the competitors developed centralized reservation systems that decreased their costs and resulted in greater overall occupancy. Dana claimed, and you now agree, that Randy has little understanding of technology and the costs of implementing such systems. In short, Randy is beyond "cost -conscious" -- he is cheap and does not know it. Thus, your job is to work within Randy's severe budget constraints to develop an excellent system.

However, you do need to hire more staff. You know that you do not have all the expertise you need to make the C-RES system work properly and run smoothly. Specifically, you need more staff with knowledge of: 1 Programming Unix-based graphical user interfaces to design computer screens that are easy for novices to understand. 2 Working with and redesigning "transfer control protocols"--i.e., managing the software that sends data across networks 3. Ethernet hardware --i.e., the hardware that controls network data transfer 4. Knowledge of Unix, Windows, and Macintosh operating systems--because some hotels are Macintosh-based and some are Windows-based, and various hotels have insisted that they are unwilling to convert from one operating system to another. 5. Internet capabilities, including knowledge of how to design secure networks that make use of the internet 6. Knowledge about hotel reservation systems

Ideally, you would like to hire about six to eight people to cover all these skill bases in duplicate. However, you have only $360,000 of budget to devote to hiring. You have asked Randy for more money for the project, but he gave you a very firm "no". Randy also strongly implied that you had better not borrow capital or other operating funds from other Information System budgets to increase the size of your staff. You dislike such micro-management, but you know better than to disobey Randy on this matter.

However, you do have full discretion to spend the $360,000 hiring budget Randy has allowed. You figure you could buy two or three programmers for this money. Good beginning programmers and technicians start at $78,000 salary, to which one automatically adds health and retirement benefits that cost the company an additional $26,500 (benefits are fixed by corporate headquarters at 34% of annual salary). It is common to offer $8-12,000 extra salary and up to $24,000 in signing bonuses and moving expenses for extraordinary candidates. Raises are based on merit , and range from 0% to 10% of salary per year. If you offer someone a supervisory position, it will cost you $20,000 to provide an appropriately furnished office.

You do not have to hire three people; other options are available and you may consider them. What matters most to you is that you make sure that your hires collectively have those six skills.

Such job candidates have been hard to find. You hired the well-known W-W Hiring Consultants agency to help find the right candidates. After five weeks of searching, they have found only one person with the skills you want. Thus, they have confirmed your suspicion of how rare such individuals are. You are starting to worry about whether you will be able to find someone with skills you need. You desperately need these skills as the C-RES project is not going well and Randy is becoming annoyed with your slow progress. In fact, one month ago, Randy told you in private that if you did not "fix" C-RES within six months, he would demand your "resignation."

The person W-W Consultants found is Sara Johnson. Sara works for one of your competitors, Red Tiger Hotels. She managed and helped customize their successful centralized reservation system. In her interviews with you, she has made it clear that she likes working for Red Tiger , and that you would have to improve upon her current salary by at least $20,000 to steal her away. While she lacks knowledge of Macintosh systems and of network infrastructure, she brings nine years of hotel experience. She currently makes $150,000 plus benefits. Sara would also desire a supervisory role. This is good because you could use help supervising your MIS staff and Sara has a lot of experience and maturity (she is 40 years old). Also, it would help you justify her salary. Thus, to hire her would cost you $247,800 ($170,000 salary + $57,800 in benefits + $20,000 in supervisory perquisites). If you hire Sara, then, you would only be able to hire one other person, and not for more than $84,000 salary or $112,600 total cost ($84,000 salary + $28,600 in benefits). Sara is experienced, but she lacks some critical programming skills and she is expensive. You need to hire computer skills more than you need supervisory help in other words, Sara's experience might not be absolutely necessary. You already have two MIS staff members who have worked for you for at least five years and have the maturity and management skills to supervise other programmers. Thus, while you would like to hire both Sara and Kelley, a forced choice between the two would favor Kelley (Kelley has the skills that will allow you to keep your job). That is, if you do not hire Kelley Greene, your BATNA is hiring Sara, which would cost you $247,800 plus $10,000 in overtime (with a 2 weeks start date) but you will likely still be fired as you would still not have the skills needed to get the C-RES project on track.

When Kelley Green applied for a job with Sunset, you were pleasantly surprised. Kelley possesses everything you want in a candidate. Furthermore, you checked Kelley's references, who praised Kelley's abilities and personality. During the interviews, Kelley's technical knowledge impressed you further. Even better, Kelley is a "steal" -- Kelley's current consulting firm pays Kelley only $78,000. Also, from the interviews you know that Kelley is tired of the traveling involved in consulting and that Kelley wishes to locate in Seattle, Kelley's hometown. If you can keep Kelley's salary under $84,000 and incur no additional expenses, you could hire both Kelley and Sara. However, if you can't, you must choose between Kelley and Sara - and given that Kelley possesses the (rare; i.e., hard to find ) skills needed to save the C-RES project and probably your job. While Sara has more experience, you prefer Kelley because Kelley has the skills you desperately need and she should be a much be tter buy. You can find somebody else to supervise later, if you must. In short, to get Kelley you will spend whatever it takes, but only if you really have to spend that much. If Kelley accepts an offer below $84,000 and starts immediately , you can hire Sara or have $247,000 leftover, which should be enough to hire two other staff member with some skills.

You want Kelley to start immediately. You are behind and cannot wait any longer. Every week you delay hiring the staff you need, the more you fall behind, and the more it will cost you in overtime pay to catch up. Every week you delay hiring somebody like Kelley or Sara, it will cost you $5,000 in overtime work. The cost of any delay would come out of your $360,000 budget, which would leave you with less money to offer to your candidates. You think Kelley should really want this job. You did your best to impress Kelley, conducting your lunchtime interview at the Metropolitan Bar & Grill, one of Seattle's best restaurants. The staff know you there and greeted you, and this show must have made a powerful impression on a 26-year-old. Besides, Seattle is Kelley's hometown. Your goal is to hire Kelley using as little of your $360,000 budget as possible. You will be using any unspent funds to hire additional programmers and consultants, and the more money you have left over, the better help you will be able to hire. You really must hire Kelley as your job is on the line and it does not seem likely that you will be able to find another person with the skills you so desperately need to "fix" the C-RES project.

Be sure to calculate Kelley's TOTAL cost (including benefits and other costs) for any offer that you are considering. Below is a summary of the costs to you for various salary levels and benefits you might discuss. Remember you want your costs to be as low as possible. It is okay to extend any column in the table beyond the range shown, using the same calculation rules for costs as below (See the Cost Excel Sheet below): 1. Cost $(000) = (annual salary * 1.34) / 1000 2. Cost $(000) = starting date ($5,000 per week; 5 * weeks) 3. Cost $(000) = (bonus * 1.00) / 1000. Note that Sunset Hotels incurs a cost of $9,000 (which will come out of your budget) for each Professional enrolled in the E-MBA Course offered by one of the country's top Business Schools: Cost $(000) E-MBA = 9.00. Whereas , Sunset Hotels incurs a cost of $5.000 (which will come out of your budget) for each Professional enrolled in the EXEC-ED training/units offered by one of the country's top Hotel Schools: Cost $(000) EXEC-ED = 5.00. These professional development initiatives are highly valued by employees and have been linked to higher retention, organization commitment, enhanced productivity and succession planning.

\fA: Annual Salary B: Start Date # Weeks C: Bonus D: Professional Development