Scoring System for Adam Baxter Company Negotiation Essay

2155 Words Apr 6th, 2015 9 Pages
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Essay Sample: Page 2
This will give use some negotiation room. Reservation price should be at 58.5 or 56 points:

Reservation price breakdown:

1. Worker autonomy and target production levels in new plant: 20 points. Given that new plant is being constructed it should have the capacity for higher production and this should be taken advantage of. Here the management team needs to push for increased efficiency within the eight hour shifts of the workers so that they do not have the incentive in going over time. This is necessary considering the higher capital expenditure that will be spent on the new plant. The main issue right now is that when the set targets are met the workers have the choice to take a break or take the rest of the day off, or if they decided to keep working they get overtime. These options should not be allowed given that the labour costs would fluctuate depending on whether the workers decide to work or not.

2. Group incentive system: 18 points. The current incentive structure pays the employees a high hourly base rate and then substantially more for any production beyond their minimal daily target. This leads to approximately 60% of base pay in incentive payments - current production targets are very relaxed. In this case we
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