The E, R and G theory stands for existence, relatedness and growth are the three sets of need which is the focus of this alternative theory of human needs in an organization.
ERG theory was developed by Alderfer and he argued that people do have needs and that those needs have to be arranged in a hierarchy and that needs are important determinants of human behavior.
This theory differs from Maslow’s need hierarchy theory in three aspects-
1. Instead of five hierarchies of needs, this theory emphasis on only three aspects.
2. The need hierarchy theory postulates a rigid step like progression. This theory on the other hand postulates that more than one need may be operative at the same time.
3. Maslow argues that a person will stay at a certain level until that need is satisfied. The ERG theory counters by noting that when higher levels need is frustrated, the individual’s desire to increase a lower level need take place. Inability to satisfy a need for social interaction for instance might increase the desire for money or for better working conditions.
Thus the ERG theory contains a frustration-regression dimension. Frustration at higher level can lead to regression at a lower level need.
The two key components of ERG Theory
Frustration—————-Regression- – – – – – – – – – – – – –
The advantages of ERG Theory are that, it 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. Next, although there is some evidence to counter the predictive value, most contemporary analysis of work motivation tends to support this theory over any other theory.
The ERG Theory is newer than the need hierarchy theory, and has not yet attained such wide currency, not such high degree of research interest as the need theory. Thus the empirical status of the ERG theory must be said to be somewhat uncertain at the moment.
Overall, the ERG theory seems to take some of the strong points of the earlier content theories, but it is less restrictive and limiting.