ERG theory

Clayton Alderfer extended and simplified Maslow's Hierarchy into a shorter set of three needs: Existence, Relatedness and Growth (hence 'ERG'). Unlike Maslow, he did not see these as being a hierarchy, but being more of a continuum. 
ERG theory approaches the question of "what motivates a person to act?" or "Why do we ever do anything?"

The needs are:

• Existence needs:  Food, water, air, shelter, clothing, safety, physical love and affection. (physical well-being)
• Relatedness needs:  To be recognized and feel secure as part of a group, a family, a culture (satisfactory relations with others)
• Growth needs:  To progress toward one's ideal self. (development of competence and realization of potential)

ERG is an acronmy for "Existence, Relatedness and Growth" but it also is the root of the word enERGy.  An erg is a unit of energy. 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.

Existence

At the lowest level is the need to stay alive and safe, now and in the foreseeable future. When we have satisfied existence needs, we feel safe and physically comfortable. This includes Maslow's Physiological and Safety needs. refers to our concern with basic material existence motivators. The people who express the greatest satisfaction with their work are those who demonstrate the strongest motivation.  One might wonder if we are using two different words to describe the same phenomenon, that motivation and satisfaction are one and the same, but the point is hardly relevant.  Either way, we can use theories of motivation to predict job satisfaction.

We hope, for instance, that our work will satisfy our Existence needs, that it will provide us a salary that buys food, clothing, transportation and other things we need to exist in our culture.  It may also provide a safe environment, health insurance, retirement, and other "necessities" of modern life.  If a job does not provide us those things it is not likely to be very satisfactory.

Relatedness

At the next level, once we are safe and secure, we consider our social needs. We are now interested in relationships with other people and what they think of us. When we are related, we feel a sense of identity and position within our immediate society. This encompasses Maslow's Love/belonging and Esteem needs. refers to the motivation we have for maintaining interpersonal relationships. the concept of "Scientific Management" where jobs were analyzed and broken down into their simplest components, research was done to find the most efficient way to perform each component, and workers were assigned to perform just one component task and required to do it exactly as prescribed.  People became part of the machine.  This led to enormous gains in productivity and thus to the age of consumer wealth that we enjoy now. When a machine part does not perform well, what do you do?  Replace it.  Does this make people feel Related?  Hardly.  I believe that the rise in unionism during the early part of this century is attributable to Scientific Management principles.

Growth

At the highest level, we seek to grow, be creative for ourselves and for our environment. When we are successfully growing, we feel a sense of wholeness, achievement and fulfilment. This covers Maslow's Self-actualization and Transcendence. Growth refers to an intrinsic desire for personal development.

We are always changing.  Change for the better is growth.  Every person and every institution that we encounter will have a role that it wants us to play.  Since that role is probably not identical to the way we naturally are, then the difference becomes a pressure to be different.  But pressure is not necessarily bad.  If a person or institution tries to pressure us in a direction we WANT TO GO, then it can be an incentive for growth.  On the other hand, if a person of institution tries to turn us into someone we don't like, that is not so good, perhaps worth avoiding.  We has best seek employment that will continue to help us grow.

Differences from Maslow's Hierarchy:

• 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 the frustration-regression principle.

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. Know how well your own needs in this model are met, and what would threaten or improve them. Be careful when other people do things that threaten or promise to improve them.