Question

Discuss the concept of social exchange as it relates to the employment relationship. How does this concept apply to employee-benefits practices?

Answer 1

Social exchange signifies that people tend to adopt the benefits and subtract the costs to determine the employment relationship's worth. A positive employment relationship indicates that benefits have outweighed the cost. On the contrary, a negative employment relationship occurs when the cost is more than the benefits. For example,- when employers get maximum productivity from minimum investment in employment, it creates a positive employment relationship. Here, employers often provide various additional rewards and remuneration to employees as a token of performance appreciation.

The concept of social exchange can be applied to employee benefits practices through the following ways:

• A proper application of social exchange theory develops the employer-employee relationship that boosts the employees' productivity.

• Social exchange theory encourages employers to recognize the performance standard of employees.

• The theory influences the leaders to create an organizational environment for employees that worth working.

• An application of the theory reduces the possibilities of employee slacking.