Alderfer's ERG theory is a simplified version of Maslow's hierarchy of needs that suggests that all

human needs can be accessed and satisfied simultaneously, rather than from the bottom up. Either
way, as needs are satisfied, employees are motivated to strive to satisfy a new need.

Alderfer's ERG Theory Simplifies Maslow's Hierarchy of

Needs

Maslow believed that there are five basic human needs.

Out of work for some time now, Jesse was offered a position as a copy assistant at a local
website, The Pressing News Online (PNO). Jesse had been the senior editor for The Pelican, a
major publication, for many years when it went under.
Desperate for work, Jesse took the PNOposition with the hope of being quickly promoted to editor.
When Jesse accepted the position of copy assistant, what she was really doing was fulfilling
Alderfer's existence need. The paycheck satisfied her physiologically - it paid for basic necessities
like food, water and shelter.
Alderfer's ERG theory contends there are three basic needs an employee seeks to fulfill. As each
need is fulfilled, it serves as motivation to fulfill a different need.
ERG stands for existence, relatedness and growth, and these are defined as:

Existence - the need for basic material existence, like physiological health and safety

Relatedness - the need for interpersonal connections, social status and recognition

Growth - the need for personal development, including creative and meaningful work

As each need is met, another need could be satisfied. In fact, at any point, several could be satisfied.
Similarly, Maslow believed that there are five basic human needs:

Physiological needs

Safety needs

Belongingness needs

Status needs

Need for self-actualization

The difference is that Maslow believed that only one need could be satisfied at any given time. As a
lower-order need is met, like getting a new job, work begins on satisfying a higher-order need, like
getting a promotion.
If a lower-order need such as health is no longer satisfied, like being diagnosed with a long-term
illness, the status of having a promotion is no longer important. A swift move down the hierarchy is
necessary to work on satisfying the physiological need to heal.

Motivation and Need Satisfaction

Need satisfaction for both Alderfer's ERG and Maslow's hierarchy occurs from a motive to act. In
fact, in the pursuit to satisfy and re-satisfy needs, motivation is the driving force.
When Jesse is not checking news stories for factual inconsistencies, she spends her time hanging
around the editorial office. Her motivation is to be accepted by her colleagues. Jesse is working on a
relatedness need: the need to connect with people and to feel accepted by a preferred group. For
Jesse, it is the editors because she was an editor at one time.

Need satisfaction occurs from a motive to act.

She regularly combs the job boards for freelance work in top magazines and newspapers. Jesse is
working on a growth need: the need to work on meaningful and creative projects.
Although Jesse is working very hard to satisfy multiple needs at once, sometimes it ends in defeat.
Alderfer calls this frustration-regression. Frustration-regression is the tendency to seek to satisfy
lower-order needs when higher orders are not met.

Sending writing samples didn't amount to as much as a phone call or an email. Frustrated with
everything, Jesse began looking for satisfaction elsewhere. Her growth need was not being met.
Clayton Alderfer reworked Maslow's Need Hierarchy to align it more closely with empirical research.
Alderfer's theory is called the ERG theory -- Existence, Relatedness, and Growth.

Existence refers to our concern with

basic material existence requirements;
what Maslow called physiological and
safety needs.

Relatedness refers to the desire we

have for maintaining interpersonal
relationships; similar to Maslow's
social/love need, and the external
component of his esteem need.

Growth refers to an intrinsic desire

for personal development; the intrinsic
component of Maslow's esteem need,
and self-actualization

Alderfer's ERG theory differs from Maslow's

Need Hierarchy insofar as ERG theory
demonstrates that more than one need may be
operative at the same time. ERG theory does not
assume a rigid hierarchy where a lower need
must be substantially satisfied before one can
move on.
Alderfer also deals with frustration-regression.
That is, if a higher-order need is frustrated,
an individual then seeks to increase the
satisfaction of a lower-order need.
This is consistent with Douglas MacGregor's
observations in explaining his Theory X/Theory Y
dichotomy: the inability to satisfy a need for
social interaction might increase the desire for
more money or better working conditions. ERG

theory also accounts for differences in need

preferences between cultures better than
Maslow's Need Hierarchy.

To bring Maslows need hierarchy theory of motivation in synchronization with empirical research, Clayton Alderfer
redefined it in his own terms. His rework is called as ERG theory of motivation. He recategorized Maslows hierarchy
of needs into three simpler and broader classes of needs:

Existence needs- These include need for basic material necessities. In short, it includes an individuals
physiological and physical safety needs.

Relatedness needs- These include the aspiration individuals have for maintaining significant interpersonal
relationships (be it with family, peers or superiors), getting public fame and recognition. Maslows social
needs and external component of esteem needs fall under this class of need.

Growth needs- These include need for self-development and personal growth and advancement. Maslows
self-actualization needs and intrinsic component of esteem needs fall under this category of need.

The significance of the three classes of needs may vary for each individual.

Difference between Maslow Need Hierarchy Theory and Alderfers

ERG Theory
ERG Theory states that at a given point of time, more than one need may be operational.

ERG Theory also shows that if the fulfillment of a higher-level need is subdued, there is an increase in
desire for satisfying a lower-level need.

According to Maslow, an individual remains at a particular need level until that need is satisfied. While
according to ERG theory, if a higher- level need aggravates, an individual may revert to increase the
satisfaction of a lower- level need. This is called frustration- regression aspect of ERG theory. For instancewhen growth need aggravates, then an individual might be motivated to accomplish the relatedness need
and if there are issues in accomplishing relatedness needs, then he might be motivated by the existence
needs. Thus, frustration/aggravation can result in regression to a lower-level need.

While Maslows need hierarchy theory is rigid as it assumes that the needs follow a specific and orderly
hierarchy and unless a lower-level need is satisfied, an individual cannot proceed to the higher-level need;
ERG Theory of motivation is very flexible as he perceived the needs as a range/variety rather than
perceiving them as a hierarchy. According to Alderfer, an individual can work on growth needs even if his
existence or relatedness needs remain unsatisfied. Thus, he gives explanation to the issue of starving
artist who can struggle for growth even if he is hungry.

Implications of the ERG Theory

Managers must understand that an employee has various needs that must be satisfied at the same time. According
to the ERG theory, if the manager concentrates solely on one need at a time, this will not effectively motivate the
employee. Also, the frustration- regression aspect of ERG Theory has an added effect on workplace motivation. For
instance- if an employee is not provided with growth and advancement opportunities in an organization, he might
revert to the relatedness need such as socializing needs and to meet those socializing needs, if the environment or
circumstances do not permit, he might revert to the need for money to fulfill those socializing needs. The sooner the
manager realizes and discovers this, the more immediate steps they will take to fulfill those needs which are
frustrated until such time that the employee can again pursue growth.