THE IMPACT OF SOCIAL EXCHANGE THEORY ON EMPLOYEE MOTIVATION AND JOB SATISFACTION

Abstract

This article explores the application of Social Exchange Theory (SET) in organizational behavior, reviewing the literature by focusing on its definitions, contexts (both social and economic), current variables, applications, limitations, and its impact on job satisfaction and motivation. SET, developed by Homans and elaborated upon by Blau, explains social interactions based on exchanges of benefits and costs between individuals or parties. It encompasses both economic exchanges, governed by formal contracts and monitoring, and social exchanges, characterized by trust and flexibility. The theory finds application in various organizational contexts such as employee relationships, organizational commitment, and job satisfaction. Contemporary studies continue to validate SET's relevance by integrating new variables like work-life balance and flexible work arrangements. Despite its utility, SET faces challenges, notably in diverse cultural settings where its applicability may vary. The article also examines SET's influence on motivation, distinguishing between intrinsic and extrinsic motivation, and its role in shaping job satisfaction. While SET offers insights into these areas, it does not predict individual behaviors conclusively. Future research could further explore the causal relationships between SET variables and organizational outcomes. This comprehensive review underscores SET's broad applicability in understanding and managing organizational dynamics while acknowledging its limitations in predicting human behavior outright.This article explores the application of Social Exchange Theory (SET) in organizational behavior, reviewing the literature by focusing on its definitions, contexts (both social and economic), current variables, applications, limitations, and its impact on job satisfaction and motivation. SET, developed by Homans and elaborated upon by Blau, explains social interactions based on exchanges of benefits and costs between individuals or parties. It encompasses both economic exchanges, governed by formal contracts and monitoring, and social exchanges, characterized by trust and flexibility. The theory finds application in various organizational contexts such as employee relationships, organizational commitment, and job satisfaction. Contemporary studies continue to validate SET's relevance by integrating new variables like work-life balance and flexible work arrangements. Despite its utility, SET faces challenges, notably in diverse cultural settings where its applicability may vary. The article also examines SET's influence on motivation, distinguishing between intrinsic and extrinsic motivation, and its role in shaping job satisfaction. While SET offers insights into these areas, it does not predict individual behaviors conclusively. Future research could further explore the causal relationships between SET variables and organizational outcomes. This comprehensive review underscores SET's broad applicability in understanding and managing organizational dynamics while acknowledging its limitations in predicting human behavior outright.