Canadian HR Reporter

CANADIAN HR REPORTER September 7, 2015 FEATURES 23 HR CAREER DEVELOPMENT Skill of negotiation important for HR By Fernando Olivera I n 2008, a cargo ship owned by the Danish Clipper Group was hijacked by Somali pi- rates. As luck would have it, company CEO Per Gullestrup made two quick decisions that led to the safe return of his ship and crew. First, after discussing the situation with his insurer, Gullestrup decided to pay a ransom. Second, he agreed to use a professional negotiator rather than handle the situation himself. After a few weeks of professional haggling, the company's expert negotiator managed to signifi- cantly limit the Clipper Group's financial pain by striking a deal that saw the pirates receive be- tween US$1 million and US$2 million — much less than their initial US$7-million demand, not to mention the ship's insured val- ue, according to National Public Radio's story "Behind e Busi- ness Plan of Pirates Inc." Everybody negotiates. In our personal lives, for example, we negotiate all the time (what to have for dinner, what to watch on TV, where to go on vacation). But negotiations are always done bet- ter by people who are trained to do them. And the ability to negotiate effectively is even more valuable in our professional lives, which is why business schools dedicate significant resources to helping executives hone these skills. When people think about nego- tiation skills in the business world, they often associate them with the process of buying and selling, so it is not surprising to find individu- als involved in procurement and sales most often proactively devel- oping the skill. But managers and executives across an organization can significantly benefit from ne- gotiation training. is is especially true for HR professionals, who are involved in a wide range of key functions that can make or break a company's bottom line, such as: procuring resources and building business cases for new HR initiatives; hir- ing, developing and retaining staff and executives; and managing critical organizational processes. All of these functions involve some sort of negotiation and the skills required to do it as efficiently and effectively as possible, while also preserving high-quality rela- tionships, are not typically devel- oped on the job. Negotiation is a collaborative process — it's not about beating up the other side. Ideally, the focus should be on addressing the needs of all concerned in a way that fos- ters high-quality relationships. When this isn't done, things can quickly go wrong. Look at job offer negotiations. When I ask MBA students who holds the power in these interac- tions, they typically say it's HR. But when I ask HR professionals, they typically think it's the ap- plicants. ese perceptions can result in posturing and get in the way of a sincere assessment of strategic fit with the organization. Even worse, they can result in an organization having a talented new hire who feels she did not get a fair deal and who will soon look elsewhere. Keep in mind that negotiated deals often fall apart during im- plementation because negotia- tors are not sufficiently prepared to negotiate. High-quality prepa- ration is key to making effective deals. Before talks start, you must have a clear sense of what you want. You must know your lim- its and acceptable trade-offs, along with your strengths and the unique advantages of what you have to offer. And you must also anticipate what can go wrong and plan for it. Furthermore, when preparing for a negotiation, it is important to understand that monetary is- sues shouldn't be the sole focus of discussions, since it is usually non-monetary issues that provide the greatest opportunities for ad- dressing needs. All of the above require the ability to put yourself in the other side's shoes, which takes listening skills, not to mention practice. Human resource managers spend a significant amount of time negotiating with numerous stakeholders, and these nego- tiations can influence everything from employee morale and pro- ductivity to the health of the lead- ership pipeline. That's why smart companies seek competitive advantage by helping their HR folks hone the skills they use every day to keep the corporate ship out of rough waters — not to mention the hands of corporate raiders. Fernando Olivera is an associate pro- fessor in organizational behavior at the Ivey Business School at the Uni- versity of Western Ontario in London, Ont. He is also director of the Ivey Negotiations Program which is part of Ivey's executive education program. For more information, visit www.ivey. uwo.ca/executive. savings plan (RRSP), ask if she has enough contribution room. In addition, prior to transferring the bonus to the RRSP provider, deduct C/QPP, employment in- surance (EI) and Quebec Paren- tal Insurance Plan (QPIP) premi- ums on the entire bonus amount, unless the employee has already reached her maximum contri- butions/premiums for the year. Failure to do so could lead to C/QPP, EI and QPIP deficien- cies, particularly if the employee ends employment prior to reach- ing the annual maximums. Miscalculating C/QPP contributions when there are 27 or 53 pay periods in a calendar year Every 11 years, bi-weekly payrolls will experience a 27th pay period and every seven years, weekly payrolls will have 53 pay periods. In addition, when the first pay date of the year is scheduled for Jan. 1, the organization may elect to pay employees on Dec. 31, thereby creating an additional pay period. Note: Labour standards in Que- bec legislate that the payment be made the day before the holiday if the pay date was originally sched- uled on a statutory holiday. In Manitoba and Nova Scotia, work- ing days (not calendar days) are used in determining the timing of an employer's wage payment requirements. Do not exceed the annual maxi- mum C/QPP exemption. Instead of using regular bi-weekly tables to calculate CPP contributions, use the CRA's Payroll Deductions Supplementary Tables for 27 or 53 pay periods. Since RQ does not publish similar tables, divide the annual exemption amount ($3,500) by the number of pay periods in the year. Prepare a schedule prior to pro- cessing the first payroll of the year and calculate the expected num- ber of pay dates, allowing you to apply the correct C/QPP exemp- tion each pay as well as the correct income tax tables. Janet Spence is the Toronto-based manager of compliance services & programs at the Canadian Payroll As- sociation, which offers professional de- velopment seminars for members and non-members. For more information, visit www.payroll.ca. Miscalculating CPP MISTAKES < pg. 20 Credit: wavebreakmedia (Shutterstock)

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