Discussion – Potential Concessions in a Severance Negotiation

Discussion – Potential Concessions in a Severance Negotiation

Potential ZOPA and BATNA Concessions

1. Netflix Will Pay Alice Severance Payment and Benefits

One of the goals of the negotiation between Alice and Sharon Slade, Netflix’s CHRO, is for the employee to exit sustainably. Alice is interested in getting severance pay if she cannot have her termination canceled. The law provides severance benefits to avoid legal vulnerability resulting from wrongful termination (Hirsch, 2008). The goal is to negotiate so that the company increases the severance benefits extended to her (Andrews et al., 2017). Besides the severance payment, the company may also concede to provide Alice with extended benefits, including outplacement services and health insurance coverage, until she gets another job.

2. Including Non-Disparage Clause in the Severance Agreement

According to Andrews (2017), a non-disclosure clause will also suffice to prevent spoiling each other’s reputations in the future. Including the non-disparagement clause in the severance agreement means that Netflix will not give negative comments about Alice in the future, especially if potential employees reach out. The agreement will also prevent Alice from suing the company in the future.

3. Providing Retraining opportunities upon Alice’s Exit

As stated earlier, having Alice exit the company is one of Sharon’s ZOPA positions. On the other hand, Sharon wants the uncertainty that accompanies job loss addressed. To that end, both parties may concede that Netflix will offer her retraining opportunities. Training will bolster Alice’s skills and make it possible for her to secure a job in the future.

Potential Concessions on Flexibility

1. Performance Improvement Plan

Netflix’s PIP model is flexible, and the company can modify it by adjusting performance goals or extending the timeline of the PIP. On her part, Alice will have to commit to the training and accept the mentorship. The concession is a form of integrative bargaining since it considers both parties’ needs (Opresnik, 2014). Afterward, Alice may continue working for the company after measurable improvement.

2. Transferring Alice to another Position

Netflix’s CHRO may also shift Alice to another position within the company. Before transferring her, the company should consider her skills and interests so that she can work in a role that suits her personality and skills. Training and development is one of the priority company policies at Netflix (McCord, 2014). Alice should be willing and open to working in a different role.

3. Salary Continuation

Another potential agreement would be salary continuation for one year. The salary may be paid as a lump sum or monthly per the current model. On her part, Alice will be required to lower her severance pay expectations so that the company can continue salary payments.

Potential Concessions Based on Legal Vulnerability

1. Confidentiality Agreement

Alice and Netflix’s CHRO may agree to a confidentiality clause. The agreement will prevent Alice from disclosing clauses in the severance agreement that would subject the company to legal jeopardy. For instance, Alice may claim that she was discriminated against based on her age, which violates the anti-discrimination act.

2. Release and Waiver Agreement

According to Andrew (2017), the release and waiver agreement is signed by an employee, declaring that they will not pursue legal action in the future. In return, the employer offers the employee some benefits. The concession is crucial as the company is legally vulnerable to a breach of contract.

3. Releasing Claims

The employer and employee may reach a mutual agreement that the latter will not make any legal claims based on the employment relationship. That means the employee will drop any discrimination claims or other legal issues emanating from the termination. The concession will cover the employer from legal consequences of a contract breach.

References

Andrews, N., Clarke, M. A., Tettenborn, A., & Virgo, G. (2017). Contractual Duties: Performance, breach, termination, and remedies. London: Sweet & Maxwell.

Hirsch, J. M. (2008). The law of termination: Doing more with less. Md. L. Rev., 68, 89.

McCord, P. (2014). How Netflix reinvented HR. Harvard Business Review 92(1-2):7. https://www.researchgate.net/publication/298487361_How_Netflix_Reinvented_HR

Opresnik, M. O. (2014). The hidden rules of successful negotiation and communication: Getting to yes! Springer.

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PROMPT: For this discussion, the class will be divided into groups of four to five students. As you work together to identify and develop three potential concessions, you should keep in mind the following critical elements:

Discussion – Potential Concessions in a Severance Negotiation

Sharon Slade’s and Alice Jones’ ZOPA and BATNA positions developed in Milestone One and the individual Module Four discussion.
Areas where Netflix has flexibility: These areas may include: modifying the performance improvement plan, shifting Alice to another position, outplacement benefits, employee health benefits, and so on. Other concessions, such as payment for accrued vacation time, may or may not be negotiable because the company has a formal severance policy.
Legal vulnerability: You should also consider the degree of legal vulnerability the company has in this situation. For example, what is the probability that Alice Jones could sue for age discrimination?

In addition to the potential concessions, your instructor will evaluate your participation in the assignment:

Participation: Complete and submit and group member evaluation form during the same week of the workshop. Use this form to evaluate your own and your group members’ performance on the small group assignment. Your review should be objective, fair, and professional.
Your group should come to a consensus of potential concessions and post this by Thursday so you are able to move on to the next part of the discussion. Then, over the next few days, your group should work together to finalize your list of your top three concessions by the end of the module week.

You can use these recommendations as you craft Section V: Negotiation Tactics and Strategies of the final project.

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https://review.firstround.com/The-woman-behind-the-Netflix-Culture-doc

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