The E, R and G of ERG theory stand for Existence, Relatedness and Growth - the three sets of needs which are the focus of this alternative theory of human needs in organizations. ERG theory, developed by Alderfer. Argues, as Maslow did, that people do have needs, that those needs are arranged in a hierarchy and that needs are important determinants of human behaviour. However, the ERG theory differs from the need hierarchy theory in three respects. First , instead of five hierarchies of needs, the ERG theory hypothesizes only three. Second, the need hierarchy theory postulates a rigid step like progression. The ERG theory, instead, hypothesizes that more than one need may be operative at the same time. In order words, Alderfer suggests that there does not exists a rigid step like progression. The ERG theory instead hypothesizes that more than one need may be operative at the same time. In other words, Alderfer suggests that there does not exist a rigid hierarchy where a lower level need must be substantially gratified before one can move on. A person can be working on growth even though existence or relatedness needs are unsatisfied. Third Maslow had stated that a person will stay at a certain level until that need is satisfied. The ERG theory counters this by noting that when a higher level need is frustrating , the individual’s desire to increase a lower level need takes place. Inability to satisfy the need for social interaction, for instance, might increase the desire for more money or for better working conditions. Thus the ERG theory contains a frustration regression dimension. Frustration at a higher level need can lead to regression to a lower level need.
Advantages of ERG theory are as follows :
- The ERG theory is more consistent with our knowledge of individual differences among people. Variables such as education, family background, and cultural environment can alter the importance or driving force that a group of needs hold for a particular individual .The evidence demonstrates that people in other cultures rank the need categories differently. For instance, natives of Spain and Japan place social needs before their psychological requirements. This would be consistence with the ERG theory. The ERG theory , therefore, represents a more valid version of the need hierarchy.
- Although there is some evidence to counter the theory’s predictive value, most contemporary analysis of work motivation tends to support Alderfer’s theory over Maslow’s and Herzberg’s. overall , the ERG theory seems to take of the strong points of the earlier content theories, but is less restrictive and limiting.
Disadvantage of the theory are as follows :
- The theory does not offer clear cut guidelines. The ERG model implies that individuals will be motivated to engage in a behaviour which will be motivated to engage in a behaviour which will satisfy one of the three sets of needs postulated by the theory. In order to predict what behaviour any given will be motivated to engage in, an assessment of that person would be required, to determine which of the three needs were most salient and most important to that person. The individual would then be predicted to engage in a specific behaviour, which would lead to the attainment of outcomes, which have the capacity for fulfilling these salient needs.
The ERG theory is newer than the need hierarchy theory, and has neither yet attained such a wide currency, nor such a high degree of research interest as has the need hierarchy theory. Thus the empirical status of the ERG theory must be said to be somewhat uncertain at the moment. Alderfer’s research has indicated some degree of support for the theory, but it is simply too early to pass a judgement on the overall validity of the theory.