The ERG theory was developed by American psychologist Clayton Alderfer between 1961 and

1978. The ERG theory is a motivational model based on Maslow’s hierarchy of needs. The ERG theory is
based on an acronym of three groups of core needs: existence, relatedness, growth.

Understanding the ERG theory

The ERG theory was developed by American psychologist Clayton Alderfer between 1961 and 1978.

ERG theory is an extension of Maslow’s hierarchy of needs, which Alderfer refined in line with
empirical research on motivation over seventeen years. After concluding his research, Alderfer
simplified Maslow’s five-level interpretation into a three-level hierarchy.

He also stipulated three fundamental differences to Maslow’s model:

 Different levels of need could be pursued simultaneously, with no requirement for an individual
to start from the bottom of Maslow’s pyramid and work their way up.
 The order of needs was not fixed but instead varied from person to person.
 The ERG theory also noted that if a higher-level need remained unfulfilled, the individual could
regress to a lower level need to increase satisfaction. This became known as the frustration-
regression principle.

In the context of employee motivation, Alderfer suggested the frustration-regression principle

negatively impacts motivation and personal growth. As a result, the ERG theory has an important role to
play in employee morale, productivity, and predicting sources of workplace conflict.

More broadly speaking, Alderfer’s work may also be useful to analyze different leadership styles or
help employees transition through change.

The three groups of needs comprising the ERG theory

The ERG theory is based on an acronym of three groups of core needs. These are:

1. Existence – or the basic material requirements for living. Maslow categorized these as
physiological needs (food, water, shelter) and safety needs (health, employment, property).
When these needs are met in the workplace, they remove distractions and boost productivity.
2. Relatedness – or needs related to the maintenance of interpersonal relationships. These needs
align with Maslow’s third and fourth levels which encompass friendship, family, intimacy and
gaining the respect of others. In a work environment, relatedness is a need to have satisfactory
or mutually beneficial relationships with colleagues, superiors, or subordinates.
3. Growth – or the need for personal development through meaningful or creative work. This is an
intrinsic desire for most people and has obvious benefits in workplace and non-workplace
settings. Growth is related to Maslow’s upper level which contains self-esteem, self-confidence,
discovery, morality, and achievement.

It’s also important to note that each of the three groups has been studied extensively since the ERG
theory was released.
 With their effectiveness verified several times over, the most successful organisations will be those
that create an environment where all three levels are available to every employee at all times.

Key takeaways:

 The ERG theory is a motivational model developed by American psychologist Clayton Alderfer
and is the result of seventeen years of empirical research.
 The ERG theory was developed in the context of employee motivation, but it may also have
applications in change management, conflict resolution, and leadership style influence.
 The ERG theory is based on three core needs: existence, relatedness, and growth. For maximum
organizational effectiveness, each need must be available to every employee at all times.

https://fourweekmba.com/erg-theory/