Clayton Alderfer (1972) of Yale University developed ERG Theory based on the empirical research. He modified Maslow’s five levels of needs to three levels and labelled them as needs for Existence, Relatedness and Growth. The name ERG has been derived from the first letters of each such need. ERG theory differs from Maslow’s Need Hierarchy Theory in following ways:
(i) Instead of five need hierarchies, ERG Theory considers only three need hierarchies.
(ii) Need Hierarchy Theory postulates rigid progression from one need level to another, whereas, ERG Theory assumes that more than one need may be operative simultaneously. This means an employee working on growth need, may even remain unsatisfied in relatedness and existence needs.
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(iii) Basic postulate of ERG theory is that it works on Frustration-Regression Model. If for any reason, employees continually become frustrated to satisfy their needs at one level, they intensify their desire to satisfy lower level needs. It is like a failure to get recognition is compensated by the desire to make more money. Contrarily, Maslow suggests people stay at a certain need level, till they are able to satisfy the same.
Critical Evaluation of ERG Theory:
ERG Theory is pragmatic in its approach, as it takes into consideration the individual differences among people. Individual differences in terms of education, family background and culture can alter the motive strength vis-a-vis the perceived need factors. The theory is more appealing, intuitive and logical than Maslow’s Need Hierarchy Theory. Despite such advantages, the theory does not offer any clear-cut guidelines.
It just indicates that people get motivated to behave in a particular way to satisfy one of the three sets of needs, i.e., the need for existence, the need for relatedness and the need for growth. Moreover, the theory is yet to be backed by adequate research.