Alderfer’s ERG Theory

As human beings, we all have needs. We need various things on a daily basis, from things that are going to simply keep us alive like food and water, to things that are going to help us be happy such as personal relationships and accomplishments. As a business owner or manager trying to keep a team of people all moving in the same direction, it is important that you have a firm grasp on the needs of people. Motivation is a huge part of success in business, and you need your teams to be motivated at all times – but that isn’t going to be possible if the needs of your employees are not being met.

Alderfer’s ERG Theory

Alderfer’s ERG Theory is closely related to another popular theory, Maslow’s Hierarchy of Needs. While the two theories certainly share some common elements, they each come at the topic of motivation and needs from a slightly different perspective.

The name ‘ERG’ stands for the three needs that Alderfer identifies in his theory –

  • Existence
  • Relatedness
  • Growth

Rather than five needs as are highlighted in Maslow’s theory, this theory boils it down to just three categories which can contain all of the needs present in the human experience. For a closer look at each of these three categories of needs, please review the content below.


These are the basic human needs that relate to staying alive and being comfortable and healthy while living. You could probably guess without any other knowledge which needs are going to be placed into this category – things like water, food, shelter, and more are all going to be included within the existence category.


The elements in this category really build the platform for a person to be happy and prosperous in life. It is hard – or maybe even impossible – to focus on other needs that you have in life when you aren’t able to meet your most-basic needs on a daily basis. For instance, a person who does not have enough food to eat or water to drink really won’t be concerned with other needs, as those basic needs are going to take up all of their focus and attention.


As the name would indicate, relatedness deals with how we interact with others, and the relationships we maintain. Human interaction is a basic need, although not in the same way that you would classify food and water as basic needs. Most people need human interaction to feel content with their lives, so this is certainly another important piece of the overall needs puzzle.


When thinking about needs in the context of the workplace, it is easy to see how work relationships can go a long way toward satisfying basic needs. People tend to feel better about themselves when they see that other people have a positive impression of them as well. So, if a person is doing well at work and they are lauded for their efforts, that attention and praise is going to go a long way to fulfilling their basic need for social interaction and affirmation.

When you are constructing the day to day operations of your business, it is important to keep in mind the crucial role that relatedness plays in the happiness of your workers. Isolating your employees all day long to work individually on their computers might be a good choice for short-term productivity, but it is unlikely to serve their needs in the long run. By building in interaction throughout the course of the day – whether through team projects or social events – you can help your staff to feel related to one another.


Personal growth is an important need that many people strive to meet as often as possible. It can be frustrating to feel like you are stuck in the same place doing the same things over and over again. When growth is one of your top-priorities, it is easy to look forward to each day as a chance to get better.

From the perspective of a manager, one of the key things you need to focus on is providing your employees with the growth opportunities that they desire. The ability to see a path into the future is something that nearly all employees will appreciate, as it is going to help them meet their need for growth. This is why people do their best to avoid so-called ‘dead end jobs’ – jobs that offer no opportunity for growth or development over time. Not only do those jobs place a limit on earning potential, but they also restrict employees from meeting their human need of ongoing growth.

ERG Theory

Think about the current structure of your business – does it allow for growth within your ranks? When someone leaves the organization, do you usually promote from within? By giving clear opportunities for people to grow and develop, you will be naturally leading them to a state of proper motivation. It is hard for employees to remain motivated over the long term when there is no clear path of growth and personal accomplishment. Place that all-important motivation out there in front of them in the form of growth opportunities and you will see just how hard they are going to work to reach their goals.

There are many different theories available to help you think about the topic of motivation, and this option from Alderfer is certainly one that should be noted. While it is similar to the popular Hierarchy of Needs from Maslow, this model differs in key ways that make it unique on its own. No matter which specific model you choose to use, paying attention to the topic of motivation in your organization is a big step in the right direction.

You can read more about Alderfer’s ERG Theory in our free eBook ‘Top 5 Motivation Theories’. Download it now for your PC, Mac, laptop, tablet, Kindle, eBook reader or Smartphone.

Key Points

  • ERG theory is a further development of Maslow’s hierarchy of needs that categorizes the hierarchy into three categories (Existence, Relatedness and Growth).
  • Physiological and Safety needs are placed in the Existence category, belonging and esteem needs into the Relatedness category, and self-actualization into the Growth category.
  • Alderfer also proposed that when needs in a higher category are not met, then individuals redouble the efforts invested in a lower category need.
  • For example if self-actualization is not met then individuals will invest more effort in the relatedness category in the hopes of achieving the higher need.

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