K.C. Alderfer proposed the ERG theory in 1969 as a simplification of Maslow's hierarchy of needs. The ERG theory states that there are three basic needs that motivate employees: existence needs related to physical and material well-being, relatedness needs concerning social and external esteem needs, and growth needs involving personal development. Unlike Maslow's theory, the ERG theory recognizes that multiple needs can be pursued simultaneously and that frustration with higher-level needs can cause regression to lower-level needs.

1. Alderfer’s ERG Theory
K.N.DIMUTHU CHATHURANGA

2. Clayton P. Alderfer
 American Psychologist
 Introduced the ERG theory in 1969
 Alderfer's ERG Theory Simplifies Maslow's Hierarchy of Needs
 Alderfer's ERG theory contends there are three basic needs an employee seeks to fulfill.
As each need is fulfilled, it serves as motivation to fulfill a different need.
ERG stands for Existence, Relatedness and Growth, and these are defined as:
 Existence - the need for basic material existence, like physiological health and safety
 Relatedness - the need for interpersonal connections, social status and recognition
 Growth - the need for personal development, including creative and meaningful work
As each need is met, another need could be satisfied. In fact, at any point, several could be
satisfied.

3.  Existence needs motivate at a more fundamental level than relatedness needs,
which, in turn supersedes growth needs.
 Satisfaction-Progression > Moving up to higher level needs based on satisfied
needs (Applicable in Maslow’s theory. Not necessarily in ERG theory)
 Frustration-Regression > If a higher-order need is frustrated, an individual
may regress to increase the satisfaction of a lower-order need which appears
easier to satisfy.
EXISTENCE
RELATEDNESS
GROWTH
Satisfaction-
Progression
Frustration-
Regression

4. ERG Theory & MASLOW
MASLOW ERG
ERG theory has three key differences from Maslow's theory:
 It suggests that people can be motivated by needs from more than one level at the same time.
There is not necessarily a strict progression from one level to the next.
 It acknowledges that the importance of the needs varies for each person and as circumstances
change. Some people might put a higher value on growth than relationships at certain stages of
their lives.
 It has a "frustration-regression" element. This means that that if needs remain unsatisfied at one
of the higher levels, the person will become frustrated, and go back to pursuing lower level needs
again.