What’s Bid Negotiation?

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Offer negotiation is the process of discussing the terms of employment before signing a contract. Both parties should set reasonable expectations and compromise to reach an agreement. The employer sends an initial proposal, and the candidate can submit a counterproposal. The negotiation process continues until an agreement is reached or an impasse is reached.

Offer negotiation is the process of entering into discussion with a prospective employer regarding the exact terms of employment. This process normally starts after the employer and applicant agree that entering into an employment contract would be mutually advantageous, but before the employment contract is actually signed. The idea behind negotiating the offer is to guarantee the salary, benefits and other advantages that the candidate wants to enjoy in exchange for his commitment and dedication to the employer.

There are many different strategies to get involved in deal negotiation. Many of them depend on both parties setting reasonable expectations. Employers often find it necessary to provide additional incentives when trying to hire someone with outstanding credentials. At the same time, candidates should be well versed in the employer’s usual policies and procedures and determine if there is the potential to command everything he or she wants as part of the employment package. Unless both parties have thoroughly researched the situation and believe that there is scope for salary negotiation or some other aspect of negotiating jobs, the effort is much more likely to fail.

A common approach is for the employer to send a job offer to the candidate. This proposal typically includes details of salary, health insurance, accrual of vacation and sick time, pension plan options, and other basic incentives. This initial proposal serves as a starting point for negotiating the offer.

Assuming the initial offer doesn’t include everything the candidate wants to have as part of the employment contract, he or she will submit a job offer counterproposal. This will cover all incentives from the initial proposal that the candidate has found acceptable, plus any additional incentives that he or she feels are fair and consistent with the job responsibilities. This counterproposal is given to the employer, who has the option to revise the applicant’s claim for additional benefits and either accept the revisions or oppose some type of proposed compromise.

The bid negotiation process continues until both parties reach an agreement on the outcome. Often this involves compromise on both sides, with the candidate gaining some additional incentives and the employer securing the candidate’s services without meeting all of their demands. At worst, the negotiation will reach an impasse and one or both parties will stop the negotiation altogether. When this occurs, no employee/employer relationship is established and both parties are free to look elsewhere for opportunities.

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