ERG Theory

What ERG theory is

ERG Theory (نظرية ERG) is a theory of motivation that sorts human needs at work into three categories: existence needs, relatedness needs and growth needs. The name is formed from the initials of the three categories: Existence, Relatedness and Growth. The theory is attributed to the American psychologist Clayton Alderfer, and the literature knows it through his article of 1969 and his book “Existence, Relatedness, and Growth: Human Needs in Organizational Settings”, which secondary summaries date to 1972.

ERG theory is a descriptive model of human motives. It is not a test of a particular employee, nor a statement that any given order of needs raises performance, nor a description of the motives of workers in Saudi Arabia.

Where does ERG theory come from?

We checked the bibliographic data of these works in Crossref, which establishes that they exist, not what they contain. Two English titles, Alderfer’s 1977 critique and the Wanous and Zwany test, are written without their hyphens:

• Alderfer. The article “An Empirical Test of a New Theory of Human Needs” in Organizational Behavior and Human Performance, volume 4, issue 2, 1969, pages 142 to 175.
• Schneider and Alderfer. The article “Three Studies of Measures of Need Satisfaction in Organizations” in Administrative Science Quarterly, volume 18, issue 4, 1973, page 489.
• Alderfer. The article “A Critique of Salancik and Pfeffer’s Examination of Need Satisfaction Theories” in the same journal, volume 22, issue 4, 1977, page 658.
• Wanous and Zwany. The article “A Cross Sectional Test of Need Hierarchy Theory” in Organizational Behavior and Human Performance, volume 18, issue 1, 1977, pages 78 to 97.
• Arnolds and Boshoff. The article “Compensation, Esteem Valence and Job Performance: An Empirical Assessment of Alderfer’s ERG Theory” in The International Journal of Human Resource Management, volume 13, issue 4, 2002, pages 697 to 719.
• A review of the book. A review titled “Existence, Relatedness, and Growth: Human Needs in Organizational Settings” in Contemporary Sociology, volume 3, issue 6, 1974, page 511.

The book itself is not recorded in Crossref, so the year 1972 rests on the summaries alone, and the only trace of the book we found in Crossref is its review. We have not read the text of any of the recorded works, so we quote no wording and no finding from them. Their titles indicate their subjects only: the measurement of need satisfaction in organisations, tests of need theories, and the link between pay, esteem and performance.

The titles also show that measuring needs and their satisfaction was a subject of testing and of critique, but we did not read where that work ended up. What we say about the categories and the movement between them is a summary, in our wording, of what secondary summaries circulate.

What are the three categories and how are they understood?

• Existence: material and physical needs. The summaries give pay and the physical conditions of work among its examples.
• Relatedness: the need for relationships with people who matter to the person, such as colleagues, the manager and the family, according to the summaries.
• Growth: the need of a person to have a productive or creative effect on themselves and on their surroundings, which the summaries express as personal development.

The summaries match these categories against Maslow’s five. Physiological needs and safety needs fall under existence, belonging and external esteem fall under relatedness, and internal esteem and self actualisation fall under growth. Maslow’s ordering of five levels is set out in our entry on Hierarchy of Needs. The matching comes from the secondary summaries, and we have not checked it against Alderfer’s text.

How do needs move between the categories?

The summaries attribute to the theory a set of claims about how needs move. We restate them in our words:

• Progression on satisfaction: when a lower category is satisfied, the person leans more towards a higher one.
• Regression on frustration: when a person’s pursuit of a higher category is frustrated, the person falls back to a lower one and wants it more strongly.
• Several categories at once: as the summaries present the theory, it does not assume that the categories are steps, where the second cannot be climbed until the first is complete. More than one category is sometimes active at the same time.

The novelty the summaries highlight is the backward movement: frustration in growth may raise the demand for relatedness or for existence. Our entry on the hierarchy of needs also states that a person can hold needs from several categories at the same time, so we do not count simultaneity as a difference between the two theories. Pinning down exactly where they differ would require the texts of both books, and we have read neither.

How does ERG theory differ from related concepts?

• Motivation in general: the forces that start a behaviour and set its direction, intensity and duration are the subject of Work Motivation. ERG theory is one attempt to explain those forces, and it does not cover everything that drives them.
• Hygiene factors and motivators: a theory that separates what prevents dissatisfaction from what drives satisfaction, and that adopts no hierarchical order among needs, goes by the name Herzberg Two Factor Theory. Herzberg’s theory divides factors by their effect on satisfaction, whereas ERG theory divides needs by their subject.
• Acquired needs: achievement, affiliation and power are needs a person acquires through experience, with a strength that varies between individuals, according to McClelland Acquired Needs Theory. Our estimate is that the relatedness category in ERG comes close to affiliation in McClelland’s list, and that is a closeness in meaning, not an established match.
• Basic psychological needs: autonomy, competence and relatedness are treated in detail under Self Determination Theory. That theory uses the word relatedness for one of its needs, just as ERG does for one of its categories, and both count three. The three differ, though: existence, relatedness and growth in ERG, against autonomy, competence and relatedness in self determination theory.

How do the categories show up in a work situation?

A “need” is hard to pin down while it stays a general feeling, so we suggest observable situations as examples. We wrote them ourselves, and they are not a list taken from a source:

• Existence: the date pay is made, clarity about what is paid, and a work environment that is safe and physically comfortable.
• Relatedness: a manager who speaks to the employee with respect, the employee’s relationship with colleagues in the team, and the employee’s sense of having a place among them.
• Growth: a task that makes full use of what the employee can do, a project the employee learns from, and a chance to see the effect of the work.

A single situation sometimes touches more than one category. Moving an employee to another team, for instance, can change the employee’s relationships and duties together. For that reason, in our view, placing a situation in one category calls for asking the employee directly rather than assuming. Dividing needs into categories is itself a choice of classification, not a measurement that decides which category each situation or each employee falls into.

A hypothetical example: a team of five employees

Suppose a hypothetical establishment asked five employees two questions about each category, in a simplified survey we designed: how important is the category to you, from 1 to 5, and how far is it satisfied today, from 1 to 5. The importance scores for existence were 4, 5, 4, 4 and 4, a total of 21, so the average is 21 ÷ 5 = 4.2. For relatedness they were 4, 3, 4, 3 and 4, a total of 18, so the average is 3.6. For growth they were 5, 4, 5, 4 and 4, a total of 22, so the average is 4.4.

The satisfaction scores for existence were 4, 4, 3, 5 and 4, a total of 20, so the average is 4.0. For relatedness they were 2, 3, 2, 1 and 2, a total of 10, so the average is 2.0. For growth they were 1, 2, 2, 1 and 2, a total of 8, so the average is 1.6.

The gap is the average importance minus the average satisfaction. For existence it is 4.2 minus 4.0, which equals 0.2. For relatedness it is 3.6 minus 2.0, which equals 1.6, and for growth it is 4.4 minus 1.6, which equals 2.8. The gaps add up to 0.2 + 1.6 + 2.8 = 4.6, so growth accounts for 2.8 ÷ 4.6 = about 61% of the total, relatedness for about 35% and existence for about 4%.

Now suppose the survey was repeated some months later. Growth satisfaction stayed at an average of 1.6, while the average importance of relatedness rose from 3.6 to 4.2, a total of 21 across the five, an increase of 0.6. The relatedness gap then became 4.2 minus 2.0, which equals 2.2.

That picture matches the regression after frustrated growth that the summaries describe, but it does not prove it, because a change in the team, in the manager or in the wording of the question might explain it. The numbers and the survey are hypothetical, made up for illustration. They do not represent any establishment or study, nor any real instrument of the theory.

How is the theory misread?

• Treating it as a recipe for motivation: the summaries describe categories and the movement between them, and we find nothing in them that says how much any measure raises motivation.
• Labelling an employee’s personality with one category: in our reading, a category describes a need in a given period and situation, not a fixed trait.
• Assuming that pay belongs to existence alone: pairing pay with existence is a matter of usage, and pay can at times carry a sense of recognition for the person who receives it.
• Attributing it to Maslow: the theory is attributed to Alderfer, and it relates to Maslow’s model through matching, not through identity.

What is the role of HR?

HR can use the categories of the theory as a shared vocabulary in a conversation with a manager or an employee about where a complaint lies. Does it concern pay and the work environment, relationships in the team, or the lack of a chance to learn? HR can also ask whether that point has shifted from one meeting to the next, as in the example. Decisions on pay, transfers and development stay with those who hold them in management, and HR contributes what it knows about the establishment’s policies and what shows up in team surveys.

What does the evidence allow us to say about ERG theory?

We do not claim that the categories move in workplaces the way the summaries describe, nor that meeting a particular category raises performance or satisfaction. We have not read Alderfer’s article, his book or the works recorded in Crossref, so we attribute no effect and no figure to any source. The Saudi context is unexamined: we rely on no Saudi study of the theory in Saudi establishments, and we state nothing about the motives of the people who work in them.

We think it is better to treat the theory as a vocabulary for describing what an employee is asking for, and to judge any measure by what shows up in the establishment. Is the employee clear about pay and the work? Does the team offer the relationships the employee needs? Has there been a chance to learn? What is decided after that depends on the employee, the task and the nature of the work.

This is an explanation of the concept, not legal advice.