In contrast to Maslow's approach, ERG theory suggests that more than one kind of need, for example, both relatedness and growth needs, may motivate a person at the same time. A more important difference from Maslow's hierarchy is that ERG theory includes a satisfaction-progression component and a frustration-regression component.
Existence includes both physiological and safety needs and corresponds to Maslow's lower-order needs; relatedness comprises both love and belongingness needs. Growth incorporates both esteem and self-actualization needs.
Alderfer suggests that one may be motivated by needs on several levels at the same time. For example, one may go to work to make a living (existence need satisfaction) and at the same time the person may be motivated by good relations with co-workers.
This theory is an extension of Maslow's Need Hierarchy in that it too is based on the assumption that needs are important determinants of an individual's motivation. Like Maslow's five groups, the three groups of needs recognized by Alderfer can be arranged in a hierarchy with existence needs being the bottom or lowest level, and growth representing the top or highest level of needs.
ERG Theory recognizes that the order of importance of the three Categories may vary for each individual. Managers must recognize that an employee has multiple needs to satisfy simultaneously. According to the ERG theory, focusing exclusively on one need at a time will not effectively motivate.
The frustration-regression principle explains that when a barrier prevents an individual from obtaining a higher-level need, a person may "regress" to a lower-level need ( or vice versa) to achieve satisfaction. For example, a person wants existence-related objects when his or her relatedness needs are not satisfied; a person wants relationships with significant others when growth needs are not being met.
While Maslow’s need hierarchy theory is rigid as it assumes that the needs follow a specific and orderly hierarchy and unless a lower-level need is satisfied, an individual cannot proceed to the higher-level need; ERG Theory of motivation is very flexible as he perceived the needs as a range/variety rather than perceiving them as a hierarchy. According to Alderfer, an individual can work on growth needs even if his existence or relatedness needs remain unsatisfied. Thus, he gives explanation to the issue of “starving artist” who can struggle for growth even if he is hungry.
The theory has not attracted as much attention as Maslow's theory, but seems a reasonable modification of it. However, like Maslow's theory, it is rather difficult to test
After serving as a senior faculty member and program director at the Rutgers University Graduate School of Applied & Professional Psychology and the Yale School of Organization & Management, Clayton P. Alderfer has formed a consulting firm, Alderfer & Associates, to provide organizational diagnosis and consultation services for clients in the private, not-for profit, and public sectors.
To address the criticisms of Maslow's Hierarchy of Needs, in the late 1960's, Clayton Alderfer (1972) introduced an alternative needs hierarchy, referred to as the ERG Theory. Alderfer's hierarchy relates to three identified categories of needs: existence, relatedness, and growth.