🧑💼 Management, HR & internal negotiation
In-company negotiation
Internal, managerial and labour negotiation: D. Lax & J. Sebenius ("3-D Negotiation"), D. Malhotra & M. Bazerman, G. R. Shell; French labour framework (settlement agreement, mandatory annual bargaining).
Full detail in the “Origin & history” section below.
Author of the library
Negotiation lecturer at KEDGE Business School
A rare threefold background serving negotiation: teaching, commercial justice and audit, backed by experience as a company director in Bordeaux.
The Mandatory Annual Negotiation (Négociation Annuelle Obligatoire, NAO) is the recurring meeting, imposed by French law, between the employer and the representative trade unions on pay, working time and value-sharing. It turns the social balance of power into an institutionalised, scheduled and documented process, in which the obligation bears on the good faith of the dialogue and not on reaching an agreement. For the negotiator, the NAO is a textbook case of multi-party, cyclical negotiation under regulatory constraint, in which preparation through data (the BDESE, the economic and social database) and time management are paramount. It combines distributive issues (pay rises) with integrative ones (work organisation, employee savings, workplace equality).
At a glance
Vigilance: moderate (4.0/10) · Preparation required: 7/10
Indicative profile: it situates the “Management, HR & internal negotiation” family as the Management, HR & internal negotiation school practises it, not this technique taken in isolation. Techniques from the same family and school therefore share the same profile. NEGOCOACH editorial rating out of 10, non-experimental · the higher the “relational risk” value, the more costly the technique is to the relationship.
NEGOCOACH assessment
Tactical potential 6.0/10 (effectiveness, impact, discretion) and vigilance moderate (relational and ethical risk): two distinct readings, deliberately never merged into a single score that would reward risk. NEGOCOACH editorial rating calibrated from the “Management, HR & internal negotiation” family and the “Management, HR & internal negotiation” school. Each criterion is rated out of 10; click to understand what it measures.
How far the technique can carry the negotiation in the intended direction when it is well executed.
Strength of the effect produced on the counterpart's perceptions, emotions and decisions.
How hard it is for the other party to notice the technique is being used. A high value = very discreet.
The information, analysis and rehearsal required upfront to use it effectively.
Potential cost to the relationship and to trust if the technique is spotted, refused or fails. A high value = riskier.
Moral acceptability: fairness, transparency and respect for the counterpart's autonomy. A high value = more defensible.
Documented school
The school this technique stems from is documented by recognised work and established practice, without experimental consensus. This indicator qualifies the school, not this technique taken in isolation.
Indicative NEGOCOACH editorial rating, for teaching purposes. For “Relational risk”, a high value signals a cost to the relationship, not a quality.
Established in France by the Auroux Act No. 82-957 of 13 November 1982, which for the first time creates an annual obligation to negotiate within the company on actual wages and working time. The mechanism was reorganised by the Rebsamen Act No. 2015-994 of 17 August 2015 (grouping the themes into major blocks), then by the "Macron" Ordinance No. 2017-1385 of 22 September 2017 (public-order architecture / scope of negotiation / supplementary provisions, with the possibility of adjusting the periodicity up to four years by agreement). The value-sharing component was strengthened by Act No. 2023-1107 of 29 November 2023. It is not a "technique" by a single author but a legal framework (art. L2242-1 et seq. of the Labour Code) that has become a structuring arena for collective bargaining.
A collective bargaining procedure, initiated by the employer, opened at least once a year (or on a periodicity that may extend up to four years by majority agreement) in companies that have at least one representative union branch. It bears mainly on two blocks: (1) pay, working time and the sharing of added value (actual wages, duration and organisation of working time, profit-sharing/statutory profit-sharing/employee savings); (2) gender equality between women and men and the quality of working life and conditions. The obligation is an obligation of means (to negotiate in good faith, to provide information, not to take a unilateral decision on the topics while negotiation is ongoing) and not of result: it may end in an agreement or in a formal record of disagreement.
Application by context
Transposed to sales, the NAO logic becomes the annual pricing review with a strategic client: a scheduled and expected meeting where prices, volumes and terms are renegotiated on the basis of shared indicators (inflation, costs, performance), without leaving the partner to endure a unilateral increase.
A buyer sets up with their key suppliers an annual negotiation of terms (prices, lead times, end-of-year rebates, CSR commitments) based on open cost data, reproducing the NAO principle: a mandatory meeting, informational transparency and closure by agreement or by a documented record of disagreement.
This is its native ground: the employer and the unions negotiate each year the increase envelope, its breakdown (general/individual), working time and employee savings, backed by the BDESE and with a formal record in the event of failure.
In times of crisis (savings plan, wage freeze), the NAO serves as an institutional safety valve: rather than imposing, management puts the figures on the table and negotiates trade-offs (job preservation, an exceptional bonus) to defuse the conflict.
Analogous to social conferences or annual cross-industry negotiations (revaluation of the minimum wage, social agenda): an imposed cycle in which the State convenes the social partners and unions at a fixed deadline, the obligation bearing on the fact of meeting and discussing.
Transposed to the commercial lease, it evokes the annual rent review that is indexed and negotiated: a periodic meeting between landlord and tenant to adjust the rent to objective indices (the ILC and ILAT commercial-rent indices) rather than suffering an abrupt revaluation.
The highly codified framework of the French-style NAO contrasts with German co-determination or Anglo-Saxon collective bargaining; exporting it means adapting the degree of formalism, the role of the record of disagreement and the place of the union, which vary greatly from one culture to another.
Metaphorically, it is the annual budgetary "family council": a set moment at which pocket money, contributions and household organisation are discussed together, on the basis of actual income, rather than being settled unilaterally case by case.
Counter-techniques
Negotiation is also played on defence. Here is how to recognise this technique when it is used against you, and turn it around.
The signals that give it away
The counters that defuse it
Turn it into an advantage
Name the manoeuvre: said out loud, a technique loses most of its power.
Reacting emotionally instead of coming back to the facts.
Strengths: it institutionalises dialogue and reduces the risk of open conflict; it imposes transparency through data (the BDESE) that rebalances the information asymmetry; it creates a predictable rhythm that helps both parties prepare; the obligation of means leaves flexibility (agreement or disagreement both possible); it gives legal security to the diligent employer. Weaknesses: an obligation to negotiate is not an obligation to conclude, hence "alibi" NAOs with no real progress; a strong power imbalance when union presence is weak or divided; a ritualisation that can drain the exercise of its substance; an essentially distributive stake that strains the climate; procedural heaviness and formalism (convocations, formal records, filings) that are time-consuming; the employer controls the agenda and the timetable, a structural advantage.
Relevant whenever there is a lasting, recurring and unbalanced relationship in which one wants to avoid a unilateral decision and channel demands: employer-employee relations of course, but also any long-term partnership (client-supplier, landlord-tenant) that justifies a periodic review meeting on the basis of shared indicators. Particularly useful when preserving the relationship matters as much as the immediate gain, when a third party (judge, administration) can penalise a failure of good-faith dialogue, and when the annual repetition allows concessions to be traded over time.
Business · 1982: the Auroux Act brings the obligation to negotiate into the company, Before 1982, a French employer could set wages without ever sitting down at the union table. Act No. 82-957 of 13 November 1982, championed by Labour Minister Jean Auroux, imposes for the first time an annual negotiation on actual wages and working time in companies with union branches. The shift is conceptual: the obligation bears not on the result (no increase imposed) but on the very fact of negotiating in good faith. This founding case illustrates how the law can create, from scratch, a recurring space for negotiation and durably rebalance a power relationship.
Business · NAO under pressure: the 2022-2023 inflation reopens the pay front, A scenario representative of many French companies: with inflation exceeding 5%, the unions arrive at the NAO demanding full indexation of wages, while management, constrained by its margins, proposes a partial general increase supplemented by a value-sharing bonus (the PPV, "prime de partage de la valeur", non-permanent). The negotiation turns on the structure of the gain (permanent vs one-shot), the use of the BDESE to objectify the company's capacity, and the credible threat of disagreement. The typical outcome: a compromise agreement combining a moderate general increase, individual measures and an exceptional bonus. Illustrative case, not attributed to a named company.
For employee representatives: demand upfront the full communication of information (BDESE, salary grid, gender ratios) and a real timetable of several meetings, in order to counter an "alibi" NAO wrapped up in a single session. Objectify every management counter-argument with figures (results, dividends paid, evolution of the wage bill) to neutralise the "company with no margin" narrative. Coordinate between unions to avoid the division exploited by management. Systematically document positions and, in the event of a deadlock, prefer a detailed record of disagreement (which binds the employer and can ground an appeal) over a coerced signature. For the employer: guard against the fait accompli by scrupulously respecting procedural good faith, the only bulwark against litigation.
Limits: real effectiveness depends heavily on union density and unity; in SMEs with a weak union presence, the NAO can be a largely formal exercise. The obligation of means allows negotiations empty of content, legally compliant but socially sterile. Formalism can prevail over substance. Ethics: good faith is the deontological pivot. An employer who simulates negotiation (truncated information, a fictitious timetable, an immovable position) subverts the spirit of the law and borders on obstruction; a representative who instrumentalises the NAO for purely political or dilatory ends also perverts its purpose. Transparency about data and respect for business secrecy must be balanced. Using the PPV as a permanent substitute for a lasting pay revaluation raises a question of intergenerational fairness and distributive justice.
Related techniques and mechanisms: collective bargaining in the broad sense (industry-wide agreements, company agreements); Anglo-Saxon collective bargaining and German Mitbestimmung / co-determination; multi-party negotiation and coalition negotiation (union games); Harvard principled negotiation (separating the people from the problem, objective criteria via the BDESE); BATNA/MESORE applied to the record of disagreement and to the strike as an alternative; distributive negotiation (sharing the envelope) vs integrative (expanding it through working time, savings, quality of working life); the review mechanisms and rendezvous clauses in commercial contracts; mediation and conciliation in the event of deadlock.
Quick exercise
Answer in your head, then reveal the solution. Memory is built through active recall.
Frequently asked questions
The Mandatory Annual Negotiation (Négociation Annuelle Obligatoire, NAO) is the recurring meeting, imposed by French law, between the employer and the representative trade unions on pay, working time and value-sharing. It turns the social balance of power into an institutionalised, scheduled and documented process, in which the obligation bears on the good faith of the dialogue and not on reaching an agreement. For the negotiator, the NAO is a textbook case of multi-party, cyclical negotiation under regulatory constraint, in which preparation through data (the BDESE, the economic and social database) and time management are paramount. It combines distributive issues (pay rises) with integrative ones (work organisation, employee savings, workplace equality).
Yes. Used in good faith it stays within a fair negotiation: it structures the exchange without deceiving the other party. Being transparent about your intentions strengthens the long-term relationship.
Reacting emotionally instead of coming back to the facts. The right reflex: slow down and reformulate.
NEGOCOACH does not assess the experimental validation of this technique in isolation. What we document is the grounding of its source school (Management, HR & internal negotiation): documented school. Full detail is in the "At a glance" section of this page.
Practise with AI
Copy, paste into your assistant, replace the [brackets]. Works with ChatGPT, Claude, Gemini, Mistral, Perplexity.
Build your plan before the meeting
You are an expert negotiation coach. Help me prepare to use the "The Mandatory Annual Negotiation (NAO)" technique in the following situation: [describe your situation]. Give me: the conditions for success, a 3-step script, my counterpart's likely objections and how to answer them.
Rehearse against an AI counterpart
Play the role of my counterpart in a negotiation. I am going to test the "The Mandatory Annual Negotiation (NAO)" technique. React realistically and with resistance, do not give in too quickly, then at the end analyse my performance and suggest 3 concrete improvements.
Analyse a past negotiation
Here is how my negotiation went: [paste the exchanges]. Analyse whether the "The Mandatory Annual Negotiation (NAO)" technique was used well, what worked, the mistakes made, and spell out precisely what I could have done better.
References
Founding works of the 🧑💼 Management, HR & internal negotiation school this technique belongs to.
3-D Negotiation
BookD. Lax & J. Sebenius · 2006
Negotiation Genius
BookD. Malhotra & M. Bazerman · 2007
Bargaining for Advantage
BookG. R. Shell · 2006
Getting to Yes
BookR. Fisher & W. Ury · 1981
Internal, managerial and labour negotiation: D. Lax & J. Sebenius ("3-D Negotiation"), D. Malhotra & M. Bazerman, G. R. Shell; French labour framework (settlement agreement, mandatory annual bargaining).
On video
Videos to picture The Mandatory Annual Negotiation (NAO) and anchor it through examples.
A verified video selection is being enriched; the search above already surfaces the best videos on the topic.
Technique map
Every technique sits within a network: what it draws on, what it combines with, where it applies, and how to defend against it.
Spot its signals, neutralise it and turn it around with the defensive playbook on this page.
See the counter-techniquesThe Mandatory Annual Negotiation (Négociation Annuelle Obligatoire, NAO) is the recurring meeting, imposed by French law, between the employer and the representative trade unions on pay, working time and value-sharing. It turns the social balance of power into an institutionalised, scheduled and documented process, in which the obligation bears on the good faith of the dialogue and not on reaching an agreement. For the negotiator, the NAO is a textbook case of multi-party, cyclical negotiation under regulatory constraint, in which preparation through data (the BDESE, the economic and social database) and time management are paramount. It combines distributive issues (pay rises) with integrative ones (work organisation, employee savings, workplace equality).
Name the manoeuvre: said out loud, a technique loses most of its power.
Reacting emotionally instead of coming back to the facts.
Our programmes turn theory into a concrete advantage.