negotiation themed case study

HRMG 213 – Course Final Paper
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Section I: Employer Concerns 1, Availability
The company had to get an assurance that Lyra would attend all shoots and on time. This was an important concern as she would be involved in the promotion of various company products. The model was initially required to attend two or less public appearances, one film shoot, and two photoshoots but due to the new product, she would be required to attend two film shoots, three to four photoshoots, and three public appearances every month. The company was open to listening to her requests for scheduling but was to have the final say on such requests. The company also wanted a model who would be at the company for five to seven years to guarantee the success of the new product line as well as the company’s expansion plans.
2. communication
Lyra had not been informing the company in case it would not be possible to attend the shoot; she would at times send just a voice message the night before the day of the shoot or just fail to turn up on the day of the shoot without prior communication. The company, therefore, wanted her assurance to be giving notices going forward in case it was not possible to turn up for the shoot. This was necessary as the company had been losing a lot of money due to the frequent cancellations. The company had recently entered into a contract with a new photographer who required the company to assume the full shot fees if no notice was given 24 hours before the shoot.

Lyra would, therefore, be required to bear the cancellation fees resulting from her absence, request or lateness.
3. Salary increase
The company was of the opinion that Lyra had to show her commitment to the company by attending all shoots before she could get an increase in the pay per shoot which the company was more than willing to give. She, therefore, had to be subjected to one-year probation before she could get any raise. Lyra could get a 30-50% increase after the probation period.
4. Bonus
The company had always given experienced models a signing bonus after finalizing a contract. The company was however opposed to giving the bonus until it was sure that her behavior had changed and she would continue being a part of the company. The company would therefore only give the $1,500-$5,000 bonus after the probation period.
5. Competition
The company was also of the view that Lyra was not supposed to engage in any commercial or promotional activity for a direct competitor, i.e., any company that sold cosmetics. This would be for the whole of the contract’s duration as well as one year after the contract’s expiration. The company would be open to her engagement in any other promotional activities with non-competitors as long as she sought the company’s written approval.
Section II: Contract Outcomes
1. Bonus
was addressed under the bonus section of the agreement. As per the agreement, Lyra would be entitled to a $5,000 signing bonus. The model would receive half of the signing bonus after finalizing the contract while the other half would be paid to her after completing the probation period successfully. The company was opposed to a one-off bonus payment after signing the contract as it was not sure of Lyra’s commitment, agreeing to pay only half of the bonus amount after signing was therefore still a good compromise as it would enable the model to work knowing that she still had some amount waiting for her if she ended the contract successfully. The compromise was necessary as Lyra was already experiencing cash crunches resulting from her mother’s medical expenses. Holding on to the cash would have created the impression that the company was unconcerned with her plight which may have worsened her attitude towards the company.
2. Availability
This concern was addressed under the payment rates and the contract length sections of the contract. As per the new agreement, Lyra would be required to be on time for all regularly scheduled commercial filming or photoshoot sessions. Any failure on her part would lead to her assumption of all cancellation or reschedule fees. The company also succeeded in tying Lyra down to a long contract as the contract would last for six years as per the new agreement. There was, therefore, no compromise with regard to the availability concern. The company expected maximum contribution from the model to the company’s activities.
3. Salary Increase
This concern was addressed under the payment rates and the probationary period and pay schedule sections. As per the new contract, Lyra would be entitled to a maximum of $10,000 for each regularly scheduled commercial filming and $2,000 for a regularly scheduled photoshoot which lasted not more than four hours. She would get $500 per hour for every hour past the four agreed hours. She would however not receive any extra payment for photo shoots past the business hours.
However, this salary increase would not be affected at once. It would increase with time during and after the probation period. The model would be subjected to a one year-probation as per the employer’s concerns. She would receive $7,500 for every commercial filming lasting less than four hours and $1,000 for every photo shoot as well as $200 for every additional hour during the first six months of probation. During the other half of the probation year, she would be entitled to $8,000 for every commercial filming and $1,100 for every photo shoot and $250 for each additional hour. During the first year, Lyra would receive $1,200 for every regular photoshoot and $300 for every hour after the four normal hours. Regular commercial filming would attract an $8,500 payment per hour. Lyra would also be entitled to a salary increase every six months, subject to continued satisfactory performance after the probation period. The salary would increase by $100 until it reached $2,000 per shoot. The company would also increase the additional hour fees by $50 until it was a maximum of $2,000 per shoot. She would also get a $500 increase in the commercial filming fees until it reached a $10,000 per shoot maximum. The company only made a compromise concerning the percentage of increase. As per their concern, Lyra would only be entitled to a 30-50% increase. This, however, rose to around 100% in the new contract. The increases would however not be a one-off thing as the company had insisted from the start. The compromise was necessary as it showed that the company cared about the model’s plight and financial challenges. The money would motivate her to work hard and have the right attitude for the job.
4. Communication
This concern was addressed under the scheduling and rescheduling of photo shoots & filming sections. Communication would be a crucial factor in scheduling and rescheduling of shoots to avoid costs both to the firm and the model. As per the new contract, a regularly scheduled session would require a 30 days’ notice to Lyra and her input on the schedule. The company would give Lyra a seven days’ notice of any rescheduling. If Lyra also wanted a reschedule, she had to give the company a seven days’ notice. The company would not be obligated to consider her request but would act in the best possible way for both of their interests. The company made a compromise to incorporate Lyra’s input concerning scheduling and rescheduling if adequate notice was given instead of just passing the reschedule fees to her. It would have been unfair to pass all the burden of reschedules to the model considering that her mother needed treatment now and then yet she was the only one near her. The situation may have worsened her attitude problems.
5. Competition
This concern was addressed under the non-compete agreement section. Lyra would not be expected to model for any other cosmetic company during the term of the contract and one year after the contract. The model may model for any other non-competing firm as long as she sought the written approval of the company. The company was however not obligated to consider her request as her commitment to the firm was supposed to come first. There was also no compromise in this section.
Section III: Overall Assessment of the Agreement
The contract was a good one for the company. To start with, only the best input would be expected from Lyra. There would be no compromise concerning this area. The model would, for example, be required to attend all sessions without failure and on time as long as there was no agreement with the company for a rescheduling. The model would otherwise be required to assume all costs that resulted from her failure. The company also managed to tie down the model to six years to ensure that the new product line as well as others that may have come along by then, had gotten the desired breakthrough in the market. The company would, therefore, utilize the model maximumly for the benefit of the company’s growth.
The company also had its way in most of the areas of concerns and the few compromises made would be beneficial to both parties. The company for example managed to tie down the model to a long-term contract, implemented a continuous salary increased based on a probation period, did not give the model a one-off bonus after the signing, and the model always had to adhere to the company’s timeline except if her time change requests were accepted. The compromises made on the other hand were in the best interest of both parties. The change in percent increase as well as in the bonus terms would make the model feel appreciated in the company and therefore commit to achieving the company’s goals. It would also help her deal with the financial challenges that were making her unsettled.
Lastly, the company stood the best chance of gaining from her continued stay in the company. She had over time become the face of the company’s marketing programs which meant continued revenues in future. Taking another model would have been akin to starting from scratch. It would have seen the company’s profits take a dip before the new model adapted to the promotional activities. The new arrangement may also have failed which would have been catastrophic for the company. Even if the company ended up spending more on salaries, this amount would be incomparable to the future profits attributed to the model.