Market vs. Social Norms in the Workplace

In a fascinating look at human behavior, Dan Ariely’s Predictably Irrational points out that there is a distinct difference between social and market relationships. For example, when a friend helps you move, they do so based on a social relationship, and so they expect nothing in return. On the other hand, hiring a mover is a purely market relationship, based on the fact that the mover will be compensated for his or her work.

If you tried to offer your friend money to help you move, he would likely be offended, but offer your friend a gift as a token of your gratitude, and he will be delighted by your thoughtfulness.

So how does this fit in with the workplace?

As Ariely points out, the American workforce used to be based largely on market norms. There was a clear separation between work and personal time, and wages were paid based on hours worked. Today, as wages shift from hourly to salary and we are expected to be “always on” with our blackberries and laptops (not even vacations are sacred anymore), employers need to find ways to make employees loyal to their companies, to build committed social relationships that go beyond the simple market transaction of work = pay.

Look at Fortune’s Top 100 Employers to Work For . This list is made up of companies that go beyond salaries to show that they are committed to the employee-employer relationship. They offer such benefits as onsite gyms, free healthy meals, childcare, full health-care coverage, continued education and "extracurricular activities" with colleagues.

It’s all too easy these days to jump ship for a new job with higher pay—and many are doing just that—but the companies that make the extra effort to create a social relationship with employees and make them feel that what they have is special will find themselves with lower turnover.

What is your company doing?