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Christine Cross and Tony Dundon

Social exchange theory (SET) has long been used as a way to try and unpick and examine various social and psychological relationships that exist in a workplace, typically involving workers and co-workers, employers and supervisors, line managers, trade unions, customers and other stakeholders with an interest in the firm and its human resource management practices. In this chapter the authors review the nature and components associated with the social aspects of work and employment relations. The chapter outlines some of key debates associated with SET and explains the main theoretical properties. From this, several employment issues and HR practices are used to illustrate the application utility of SET, including the psychological contract, followed by a consideration of some of the limitations with the theory.