Recognizing Social Exchange Theory in the Workplace

The fields of psychology and sociology provide business owners with a multitude of tools to understand why their employees and customers make certain decisions and act in specific ways. Social exchange theory is particularly useful for business owners interested in using proven science to structure a workplace that will help make their employees comfortable and productive. 


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What is social exchange theory?

Social exchange theory is a psychological and economic model of human behavior. It offers an explanation of the processes that people use to make and maintain relationships with family, friends, colleagues and strangers. Social exchange theory is essentially a cost-benefit analysis that evaluates the risks and rewards of pursuing or continuing a relationship. Social exchange theory is used to explain people’s actions in a variety of settings and within a multitude of relationships. 

Related: How to Manage Employees


How social exchange theory applies to the workplace

Business owners have long applied social exchange theory to the workplace in academic theory and practice. Employee relationships are one of a few key indicators of a person’s success in their job. If an employee doesn’t have positive connections at work, they’re more likely to leave the position and seek those positive relationships elsewhere. You can use social exchange theory to help structure an environment and company culture that promotes friendliness and collegiate relationship-building to help your employees feel connected to the organization on a personal level. 

Related: Five Management Tips You Can Try Today


Common social exchange theory scenarios in the workplace

Applying social exchange theory to your office or workplace can lead to substantial benefits. Employees who feel their personal well-being is important to the organization and who build positive relationships with the support of their leadership are more likely to remain productive in their work and loyal to the company. Consider these common social exchange theory scenarios to see how you can implement positive relationship building to your company. 



Positive relationships between company leadership and other employees are vital. A fine way to build rapport and connection is through regular employee recognition. Whether you choose to implement a company- or department-wide employee recognition program or simply ensure that you or other company leaders regularly recognize individual work in conversation, showing that you value the work your employees do is important. 


Company culture

Build a company-wide culture of friendliness and positivity. Express and model that you support employee-to-employee friendships and want your employees to have positive connections at work. Create opportunities for people to get to know each other through off-site company events or during work-hour programming. 


Conflict resolution

If a conflict between employees arises, do your best to resolve it quickly. Show that you value employee comfort and happiness by addressing issues. If your employees see that you take personnel complaints seriously and work to resolve the issues, then employees will be more likely to come to you with problems early on for resolution rather than letting small concerns grow into large-scale problems. 



Operate with transparency whenever possible. If your employees feel they can trust you and the company, they’ll be more open and willing to form lasting relationships with their coworkers and leadership. Modeling transparency, solving conflict and promoting friendliness will help establish that your company is an enjoyable place to work. 


Tips for using social exchange theory in the workplace

Applying social exchange theory to your workplace is relatively simple. Use these tips to help you establish an empathetic and welcoming environment in which employees can easily develop and maintain positive relationships: 

  • Use rewards: Regularly reward employees for excellent work. This establishes a positive relationship between the employee and the company. 
  • Maintain friendliness: Demonstrate friendliness in all of your company interactions. Modeling appropriate behavior and expectations will guide other leaders and employees to follow your actions. 
  • Support relationship development: Support employee friendships through workplace gatherings and activities designed to build rapport and connection. 
  • Apply it to customer service: Teach your customer service employees about social exchange theory and have them apply it to customer interactions. 
  • Offer support: Support employees struggling with personal or professional challenges. Help them establish positive support systems at work to help them through difficulties. 
  • Perform check-ins: Regularly check in with employees to make sure they feel heard, supported and recognized in their positions. Proactive support is easier than reactive problem-solving. 
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