Social Exchange Theory

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The social exchange theory, also called the communication theory of social exchange, suggests that human beings make social decisions based on perceived costs and benefits. (Geek, 2012) This hypothesis asserts that people evaluate all social relationships to determine the benefits they will get out of them. It also suggests that someone will typically leave a relationship if he or she perceives that the effort, or cost, of it outweighs any perceived advantages. (Dainton & Zelley, 2011) The theory uses economic terms such as benefit, gain, cost, and payment to describe social situations. (Geek, 2012) According to this theory, people consciously and unconsciously evaluate every social situation in terms of what they will have to put into it, and relate this to the benefits they think they may get out of it. The greater the potential benefit, the greater the personal investment an individual may make in a relationship. People make decisions based on their happiness level; they tend to keep a relationship if they perceive they are receiving equal or more than they are giving. All relationships involve exchanges although the balance of this exchange is not always equal. (Geek, 2012) In the workplace it is important that employees have strong relationships with their co-workers and management. Depending on the different set of priorities for employees it will make a great difference in the kind of workplace relationships they have with employees. If you have a group of employees who are prioritizing factors such as teamwork, it is much more likely that your business will be successful and achieve positive results. One way of reinforcing positive relationships in the workplace is by providing incentives that reward employees for skills such as teamwork. According to the understanding of social exchange theory, people will be more likely to seek out relationships if they feel there will be rewards for doing so. The investment that a person puts into his...
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