Jeff Wilder said:
Am I missing something that would encourage my players to pause and talk to the Bad Guys before slaughtering them?
I don't think the initiative rules discourage parley in D&D. I do think the fact that D&D combat is not particularly lethal discourages parley, but that's a different subject.
Mostly I think that it is force of habit on the part of both player's and DM's.
Try mixing in any and all of the following to break that habit:
1) An encounter in the dark with potential (good aligned allies) which have the same charge into the fray attitude as the PC's. ("Wait a minute, you are the servants of the evil necromancer, right?")
2) An encounter with a 'bad guy' (Ogre, Giant, etc.) who is both a significantly hard encounter for the party (CR 4 higher than the player's level) and who is also not in fact a particularly bad chap. ("By the god's, you killed Boris??? He's been keeping this land free of Orcs for years. I used to sit on his knee while he told stories!")
3) An encounter with something that is actually much tougher of a fight than it first appears (a group of 6 goblin worg riders that is actually a well equipped 6th level NPC party replete with party cleric, wizard, thief, and 3 min/maxed fighters) which has thier own agenda and it doesn't involve facing off with another adventuring party.
4) An encounter in which the bad guys that the party might normally wax but are holding an obviously innocent hostage. If the PC's try to be ruthless, the bad guys will kill the hostage.
5) An encounter in which if the bad guys gain surprise and hold the clearly superior tactical position, but instead of pressing thier advantage, they try to parley over some matter (they want food, they want a small ammount of gold as a 'fee'). For example, the party might stumple into a prepared ambush of 40 hobgoblin warriors, but the hobgoblins actually waiting for a party of rival orcs and don't want to fight. The hobgoblins have terrain advantage, a seige engine, a dozen skilled archers behind cover, alchemist fire and thunderstones, rogue skirmishers ready to flank the PC's, and clerics behind the lines ready to provide healing. The leaders don't want a fight with the humans, but can't just let them go without losing face. They'll negotiate for a much as they think they can get away with, but will settle for alchohol, a small ammount of gold, or a few weeks worth of food rations provided they and the PC's can get disentangled without casualties mounting up.
6) An encounter with an obvious 'bad guy' which is clearly well beyond the parties abilities, but which is just at the momment not interested in a fight unless the characters force it. For example, an adult red dragon which has just fed on a herd of cattle and is feeling bemused and sleepy. A frost giant on his way across human lands to visit a cousin, who is lost and needs directions. A high level blackguard in ornate black plate mail with an agenda who just has better things to do with his time than kill 'extras' ("Excuse me, but have you seen an elf and a halfling on a white horse? They very likely seemed to be in a hurry?") or ("Have you seen an elderly priest of Lathlander on the road? Which way did he go?"), and so forth.