Alderfer's ERG theory

To address some of the limitations of Maslow's hierarchy as a theory of motivation, Clayton Alderfer proposed the ERG theory, which like Maslow's theory, describes needs as a hierarchy. The letters ERG stand for three levels of needs: Existence, Relatedness, and Growth. The ERG theory is based on the work of Maslow, so it has much in common with it but also differs in some important aspects.

Alderfer classifies needs into three categories, also ordered hierarchically:

• growth needs (development of competence and realization of potential)
• relatedness needs (satisfactory relations with others)
• existence needs (physical well-being)

This is very similar to Maslow -- can be seen as just collapsing into three tiers. But maybe a bit more rational. For example, in Alderfer's model, sex does not need to be in the bottom category as it is in Maslow's model, since it is not crucial to (the individual's) existence. (Remember, this about individual motivation, not species' survival.) So by moving sex, this theory does not predict that people have to have sex before they can think about going to school, like Maslow's theory does.

Like Maslow's model, the ERG theory is hierarchical - existence needs have priority over relatedness needs, which have priority over growth.

Alderfer believed that as you start satisfying higher needs, they become more intense (e.g., the power you get the more you want power), like an addiction.

Differences from Maslow's Hierarchy

In addition to the reduction in the number of levels, the ERG theory differs from Maslow's in the following three ways:

• Unlike Maslow's hierarchy, the ERG theory allows for different levels of needs to be pursued simultaneously.
• The ERG theory allows the order of the needs be different for different people.
• The ERG theory acknowledges that if a higher level need remains unfulfilled, the person may regress to lower level needs that appear easier to satisfy. This is known as thefrustration-regression principle.

Thus, while the ERG theory presents a model of progressive needs, the hierarchical aspect is not rigid. This flexibility allows the ERG theory to account for a wider range of observed behaviors. For example, it can explain the "starving artist" who may place growth needs above existence ones.

Do any of these theories have anything useful to say for managing businesses? Well, if true, they suggest that

• Not everyone is motivated by the same things. It depends where you are in the hierarchy (think of it as a kind of personal development scale)
• The needs hierarchy probably mirrors the organizational hierarchy to a certain extent: top managers are more likely to motivated by self-actualization/growth needs than existence needs.

Implications for Management

If the ERG theory holds, then unlike with Maslow's theory, managers must recognize that an employee has multiple needs to satisfy simultaneously. Furthermore, if growth opportunities are not provided to employees, they may regress to relatedness needs. If the manager is able to recognize this situation, then steps can be taken to concentrate on relatedness needs until the subordinate is able to pursue growth again.