5. How do perceptions of entitlement and fairness affect a negotiation?
Individuals generally seek fairness in their relationships with others. In the context of negotiation, parties will seek fairness in the negotiation process (“procedural fairness”) as well as in the outcome of the negotiation (“substantive fairness”). As such, an issue arises as to what is fair with regard to the process and allocation of resources or benefits from a negotiation. There are several commonly-accepted theories or approaches to the pursuit of fairness.
• Equality Rule – This approach seeks to afford all parties to the relationship an equal share to any resources or interests at stake or subject to division.
• Equity Rule – The equity rule focuses on the contribution of all parties to the situation or relationship. It posits that a party should receive a share or resources or benefit with regard to their interest or objectives in accordance with the value that she contributes to the situation. How a contribution is valued may vary given the context of the situation, but always concerns the importance or criticality of the contribution to total benefits obtained.
• Needs-based Rule – This is a charitable approach positing that a party to a situation should receive a share of the resources or benefits based upon her level of need. The party that needs the resources or benefits the most would be entitled to the greatest share. The question becomes, at what point is a party’s need met so that other parties can receive a portion of the resources or benefits.
These theories of fairness are particularly important in purely distributive negotiation, where the pie cannot be enlarged and the negotiation is inevitably a (win-lose).