A Business Encyclopedia

Alderfer’s ERG Theory

Definition: Alderfer’s ERG Theory is the extension of Maslow’s Needs Hierarchy, wherein the Maslow’s five needs are categorized into three categories, Viz. Existence Needs, Relatedness Needs, and Growth Needs.

An American psychologist Clayton Paul Alderfer had proposed this theory and believed that each need carries some value and hence can be classified as lower-order needs and higher-order needs. He also found some level of overlapping in the physiological, security and social needs along with an invisible line of demarcation between the social, esteem and self-actualization needs. This led to the formation Alderfer’s ERG theory, which comprises of the condensed form of Maslow’s needs.

ERG Theory

Alderfer’s ERG Theory

Existence Needs: The existence needs comprises of all those needs that relate to the physiological and safety aspects of human beings and are a prerequisite for the survival. Thus, both the physiological and safety needs of Maslow are grouped into one category because of their same nature and a similar impact on the behavior of an individual.

Relatedness Needs: The relatedness needs refer to the social needs, that an individual seeks to establish relationships with those for whom he cares. These needs cover the Maslow’s social needs and a part of esteem needs, derived from the relationship with other people.

Growth Needs: The growth needs cover Maslow’s self-actualization needs as well as a part of esteem needs which are internal to the individual, such as a feeling of being unique, personnel growth, etc. Thus, growth needs are those needs that influence an individual to explore his maximum potential in the existing environment.

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