WORK AND ORGANIZATIONAL PSYCHOLOGY
ERG THEORY
Degree of Master of Business Administration (Human Resource)
By
Ms. G. D. Balawedage
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Table of Contents
Declaration .................................................................... Error! Bookmark not defined.
Acknowledgement ...................................................................................................... iv
Executive Summary .................................................................................................... 1
1. Introduction ......................................................................................................... 2
1.1 Theory Development ............................................................................................... 4
1.2 Advantages of ERG theory .................................................................................... 6
1.3 Disadvantage of the theory ............................................................................................ 6
1.4 Why ERG Theory is Important ............................................................................. 6
1.5 How the ERG theory could be used to explain someone's motivation to work
in a job. .................................................................................................................................. 7
1.6 Difference between Maslow Need Hierarchy Theory and Alderfer’s ERG Theory . 8
1.7 The ERG motivation theory work situations ............................................................... 8
1.8 Implications of the ERG Theory ................................................................................... 9
2. The novel coronavirus (Covid-19) situation.................................................. 9
2.1 Changing desirability of relatedness ............................................................................. 9
2.2 Reprioritization of needs .............................................................................................. 10
2.3 Emerging new lifestyle norms ..................................................................................... 11
Conclusion ................................................................................................................. 11
References .................................................................................................................. 13
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Acknowledgement
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Executive Summary
An organization is well-defined as a collection of people who work together to
achieve an extensive variety of goals. Organizational behavior is defined as the
actions and attitudes of people in organizations. The field of organizational behavior
(OB) covers the body of knowledge imitative from these actions and attitudes. It
helps managers understand the difficulty within organizations, identify problems,
determine the best ways to correct them, and establish whether the changes would
make a major difference.
Organizational psychology aims on the effect that organizations have on individuals’
working. It obtains to explore and realize the insights of individual employees in its
linking to concerns of well-being at the individual and organizational levels.
Organizational psychology intends to develop people’s efficiency and increase
organizational effectiveness and performance.
Organizational psychology has a scientific and research agenda as well as practitioner
concerns. For example, research in the field seeks to gain a comprehensive
knowledge and understanding of the employee factors that may contribute to positive
or negative behavior and attitudes at the workplace. Practitioners apply that
knowledge to improve employees’ behavior and attitude as well as introduce changes
in the work environment in view of reinforcing motivation and aligning employees’
behavior to enhance organizational effectiveness.
Organizational psychology was added to the original term industrial psychology in
the 1970s.
In other way, connected fields may include occupational psychology, the psychology
of work and organizations, and more specific areas such as vocational psychology,
managerial psychology, and personnel psychology. The major differences between
these provisions reflect basically the individual or the organization’s orientations for
which the knowhow is being emphasized. Industrial psychology focusses on
individual differences oriented toward human resource matters and concerned with
maximizing targets issues of human relations processes, individual attitudes and
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behavior, and further relevant management practices that contribute to emotions of
fulfillment and relevance in the organization.
1. Introduction
Alderfer’s ERG Theory of Motivation states that individuals can be inspired by
multiple levels of requirement at the same time, and that the level which is most
important to them can change over time. An individual’s urgencies and inspirations
may be powered and can move between the existence, relatedness and growth levels
of need over time. They can move upwards or downwards.
The ways that Alderfer’s ERG Theory of Motivation has built on Maslow’s model are
supportive, particularly the fact that the order of the needs can vary. One of the core
criticisms of Maslow’s model was that while there might be some agreement on the
existence of core human needs, that their demand and importance isn’t analytically
agreed at all. This model addresses that challenge to some extent.
The model itself isn’t as easy to relate to as Maslow’s. Nor does it provide as
directional advice, which is something that people frequently look for.
Source: Maslow’s Needs Theory
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In Maslow’s Hierarchy of Needs, individuals need to satisfy one level before moving
to the next Level. For example, they need to have satisfied their safety needs before
being motivated by social belonging. In his model Alderfer disagreed., individuals do
not need to have satisfied their existence needs before being motivated by their
relatedness need.
Alderfer went further and said that different individuals possibly prioritize the needs
in different orders based on their life beliefs. A standard example of this could be the
starving actor who is motivated by growth through their art, potentially at the expense
of their existence (i.e. they cannot pay their rent but are working their passion).
also, Alderfer noted that how individuals prove their progression in relation to each of
the levels of need is important. If an individual feels they are making great progress at
relatedness, they may be increasingly motivated by growth even though their
relatedness need has not been fully satisfied. Equally, if an individual feels unsatisfied
with the progress they are making in relation to growth, they may discard it and
increase their motivation in relation to relatedness.
Alderfer’s ERG theory indicates there are three groups of core needs: as (E)
existence, (R) relatedness, and (G) growth abbreviation ERG. These groups
associate with Maslow’s levels of physiological needs, social needs, and self-
actualization needs, respectively.
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Existence needs include our basic material requirements for living. Maslow
categorized as physiological needs (air, food, water, and shelter) and safety-related
needs (health, secure employment, and property).
Relatedness importance of maintaining interpersonal relationships. These are based
in social interactions with others and associate with Maslow’s levels of
love/belonging-related needs (friendship, family, and sexual intimacy) and esteem-
related needs (gaining the respect of others).
Growth needs define our intrinsic desire for personal development. These associate
with the other portion of Maslow’s esteem-related needs (self-esteem, self-
confidence, and achievement) and self-actualization needs (morality, creativity,
problem-solving, and discovery).
Alderfer suggested that when a certain category of needs is not being met, people will
intensify their efforts to fulfill needs in a lower category. For example, if someone’s
self-esteem is suffering, he or she will invest more effort in the relatedness category
of needs.
1.1 Theory Development
The ERG Theory was developed between 1961 and 1978, during which the theorist
empirically tested data to hone the theory’s major tenets and published scholarly
material, according to Alderfer (1989).
Wanous and Zany (1977) conducted a study that supported the integrity of ERG
categories. Assessing the relationship between need satisfaction, importance, and
fulfillment, they found that need fulfillment moderated satisfaction and importance.
From a military perspective, Wilcove (1978) found ERG lacking two critical
categories: “respect for the organization and respect for one’s supervisor” (p. 305).
The added categories, along with a third (the need for personal freedom), were vetted
through the administration of a questionnaire to “630 Navy male enlisted personnel in
11 types of organizations” (p. 305). The study supported the respect for organization
need. However, mutual respect, social receptivity, and organizational respect also
emerged from the study as relatedness needs. Wilcove suggests that future research
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should examine growth and relatedness needs in terms of family, and organizational
impact on personal rights.
Alderfer and Guzzo (1979) furthered the study of ERG by considering its usefulness
in measuring enduring desires. The construct had been found to be effective in
measuring episodic desires. It discussed the psychological and sociological factors of
ERG, focusing on the educational backgrounds of parents, gender, and race.
Respondents completed a questionnaire that related each of the three needs to two
factors of need fulfillment: approach and avoidance.
ERG has also been studied from the perspective of cultural application. Song, Wang,
and Wei (2007) conducted an empirical study to determine if motivational
preferences were influenced by culture, and if they could be characterized by ERG.
ERG was also used with the Hierarchy of Needs and hygiene factors in a dissertation
examining job satisfaction of information technology (IT) leaders. This qualitative
study condensed the categories of motivators to two: relatedness and tasks (Fismer,
2005). The researcher interviewed 20 Generation X (people born between 1961 and
1981) IT leaders to understand how job satisfaction was perceived in their industry.
The aforementioned content-approach motivational theories provide the framework
for the study. Fismer (2005) found that job satisfaction was related to extrinsic
rewards.
ERG has even been used to improve technology. Chang and Yuan (2008) built a
synthetic model combining ERG with the Markov Chain model, which predicts
outcomes based on a series of interrelated points, to determine how customers would
interact with a web-based project. The model was mapped to user behavior to
simulate expected interaction. The simulation included 40 behavioral points coded to
motivation levels of ERG and Maslow. The researchers concluded that the model
accurately predicted customer needs in real-time. The study found ERG superior to
Maslow in measurements of precision, recall, and F1 measure.
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1.2 Advantages of ERG theory
(a) Alderfer’s ERG theory is more reliable with our knowledge of theory individual
differences among people. Every individual will have different importance for
different group of needs depending upon his education, family background and
cultural environment.
A very qualified person will value the growth needs more than the social needs or
even the existence needs. Alternatively, a person who belongs to a very poor family
will rate the existence needs more important. In this perspective, ERG theory is more
relevant as compared to the Maslow’s theory.
(b) ERG theory takes the strong points of the earlier content theories but it is less
restrictive and limiting as compared to the others.
1.3 Disadvantage of the theory
(a)The ERG theory does not offer clear cut guidelines. This theory says that an
individual can satisfy any of the three needs first. But how will we determine which
of the three needs is more important to that person.
(b)This theory is a new concept as compared to the Maslow’s theory. Alderfer’s
research has indicated some point of support for the theories but yet it is too early to
come to a conclusion on the overall validity of the theory.
1.4 Why ERG Theory is Important
The ERG theory consents the order of the needs be changed for different
people. The ERG theory admits that if a higher level need remains
unfulfilled, the person may retreat to lower level needs that appear easier to
satisfy. This is known as: the frustration-regression principle. This principle
impacts workplace motivation.
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1.5 How the ERG theory could be used to explain someone's motivation to work
in a job.
Alderfer's ERG theory can be used to explain someone's motivation to work in a job
because the theory is applicable to many different stories of employees. An effective
manager has to recognize where a particular individual might exist in the ERG
diagram. So then, a worker's motivation can be maximized by applying the particular
set of needs to an applicable situation. For instance, if someone has started in a job
and needs the financial security of a position in order to improve other costs and
expenses, they might be in the "Existence" needs of the model. Perhaps, their
motivation can be increased with incentives and financial bonuses. Since their needs
are driven by the need for basic material necessities, incentivizing their work in this
domain could increase their motivation to work at a particular job.
For a worker who thrives on interpersonal connection and the acknowledgement from
others, their needs are in the "Relatedness" sector. If these individuals could find
greater motivation if they were placed in a position where their interpersonal needs or
strengths could be validated, then there could be greater motivation for these
individuals to perform better and maximize output at their jobs. Lastly, the needs for
reflective "Growth" indicate that an individual has reached a point where they wish to
advance personally and move into a realm of professional development and
enhancement. For these individuals, their motivation might exist in looking at their
job as a vocation and seeking to advance within it. Constructing avenues of
professional growth and development could enhance the work motivation for these
individuals as it fits their needs.
The ERG model is fluid, in that simultaneous needs could be seen in one
employee. Someone who is struggling to meet the "Existence" needs could also seek
a sense of "Relatedness" with others. Managers have to understand the fluid nature of
the ERG theory and be able to apply to model in dissimilar circumstances by knowing
their employees. In knowing their employees, managers can use the ERG model to
increase individual motivation for the model speaks to where that particular person is
at a moment in time.
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1.6 Difference between Maslow Need Hierarchy Theory and Alderfer’s ERG
Theory
At a given point of time, ERG theory positions that, more than one need may be
operational
If the fulfillment of a higher level need is subdued, for satisfying a lower level need
there is an increase in desire.
An individual remains at a particular need level until that need is satisfied as per
Maslow, while according to ERG theory. An individual may revert to increase the
satisfaction of a lower- level need, if a higher- level need aggravates. It’s called
frustration- regression aspect of ERG theory.
Though Maslow’s need hierarchy theory is rigid as it assumes that the needs follow a
definite and methodical hierarchy and unless a lower-level need is satisfied, an
individual cannot continue 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. As Alderfer, an individual can work on growth needs even if his
existence or relatedness needs remain unsatisfied. Therefore, he gives explanation to
the issue of “starving artist” who can struggle for growth even if he is hungry.
1.7 The ERG motivation theory work situations
On a work level, that manager must recognize his employees' multiple simultaneous
needs. In Alderfer's ERG model, focusing exclusively on one need at a time will not
motivate his people. The frustration-regression principle impacts workplace
motivation. For instance, if growth opportunities are not provided to employees, they
may regress to relatedness needs, and socialize more with co-workers. If can
recognize these conditions early, steps can be taken to satisfy the frustrated needs
until the employee is able to pursue growth again.
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1.8 Implications of the ERG Theory
Managers must understand that an employee has various needs that must be satisfied
at the same time. Due to ERG theory, if the manager focuses solely on one need at a
time, this will not realistically motivate the employee. Also, the frustration-
regression aspect of ERG Theory has an additional effect on workplace motivation.
As example - if an employee is not offered with growth and advancement
opportunities in an organization, he might revert to the relatedness need such as
socializing needs and to meet those socializing needs. if the environment or
circumstances do not allow, he might revert to the need for money to fulfill those
socializing needs. The more quickly the manager realizes and discovers this, the
speedier steps they will take to fulfill those needs which are frustrated until such time
that the employee can again pursue growth.
2. The novel coronavirus (Covid-19) situation
The framework is based on a three-fold conceptualization of basic underlying human
needs: existence, relatedness, and growth. While existence needs include all kinds of
necessary basic material, safety and physiological desires, relatedness encompasses
needs which involve the desire people have for establishing and maintaining
important interpersonal and social relationships.
While it does categorize needs into lower-order ones (e.g. physiological- and safety-
based existence needs) and higher-order ones (e.g. growth needs related to personal
development), the crucial difference between this and other popular needs-based
frameworks like the one by Maslow is that E.R.G. does not assume lower-level need
happiness as a precondition for the emergence of higher-order needs. Then, it offers a
more realistic account where multiple needs energetically co-exist and interact.
Utilizing this framework highlights several notable take-out for brands and marketers
moving forward. The first phase lies in understanding the impact of this unparalleled
chain of events on consumer behaviours.
2.1 Changing desirability of relatedness
The first relationship found to the risks of today’s ever-connected mobile and sharing
economy. Increased globalization and excitement about all-things shareable wanted to
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increase social capital, boost community, enable meeting new people, build trust and
promote social inclusivity.
some notable players like Cathay Pacific and Asiana Airlines letting a few their
employees go on unpaid leave while encouraging their staff and passengers to reduce
contacts, limit public activities, and practice social distancing. Grab Share was one of
the first suspended options in Singapore – leading people would be coming back.
Taken together, some signals changing desirability of relatedness and highlights that
in a context like, social interactions, interpersonal connections, and mingling, while
otherwise typically desirable, may backfire. While it takes years, various touchpoints,
and plentiful efforts to build up reputation, people are quite fast to rush to conclusions
when it comes to perceived protection and safeguarding of their basic security and
safety needs, and any apparently infallible brand and its reputation can be dealt a
major blow within a short span of time.
Then, given the changed state of desirability of relatedness, brands should be mindful
of any signals or displays arising from their communication attempts which may be
viewed as encroaching or compromising fundamental safety and security of their
customer base.
2.2 Reprioritization of needs
Identify development is how many people have become significantly less
materialistic, possessions oriented, and status driven. Luxury and non-necessity
brands suffer during such situations. Burberry, Gucci, Saint Laurent, Alexander
McQueen Michael Kors, Versace Jimmy Choo, Coach, Kate Spade, Stuart Weitzman
etc. their forecasts and cut back on their ambitions as reported in a recent piece by the
New York Times.
The global luxury goods sector is bracing for effect not only because of lack of
tourists or store closures, because of lower entering among locals. This opens a clear
and compelling possibility for non-luxury segments to tap into this reprioritization of
needs. Although temporarily foregoing luxury and discretionary activities in
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necessities would be logically predicted by E.R.G. theory, for having underwent the
crisis and coping with the waves of relative uncertainty.
Luxury brands may already want to start crafting their campaign messages, drawing
attention to how their customers and their loved ones have grown both emotionally
and psychologically and how they symbolically deserve to be rewarded as a result.
2.3 Emerging new lifestyle norms
Creation of e-commerce, online grocery shopping and delivery, automation, virtual
classrooms, teleworking, and healthcare is here to stay. Allowing and facilitating
existence needs related to safety, security and physiology have increasingly come to
the forefront and are widely seen as taking their lawful place.
Conclusion
E.R.G. theory is comparatively new matched with Maslow's need hierarchy. But
empirical findings indicate that it may be a more valid account of motivation in
organization.
ERG Theory proposes that if a higher-level need fails to be filled then a person may
regress and seek to further fill lower-level needs instead. For instance, if an ambitious
employee isn't provided with growth opportunities, then their motivation will be
lower and they may become frustrated.
Planning and steering employee strategies. Alderfer’s seminal theory is clear and
relatable, building on Maslow’s model and taking individual priorities into account.
ERG theory in mind when planning and ensuring employees have everyday access to
all three levels will help create, engage and retain that all-star motivated workforce.
ERG theory has been put to the test by many researchers. It was revisited in
Schneider and Alderfer’s 1973 paper, Three studies of measures of need satisfaction
in organizations, and later backed by Robbins and Judge (2008). There have been at
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least 23 articles that have taken the theory, analyzed and developed it, and most
commentators reach positive conclusions.
ERG has been applied to various workforces to:
Increase morale
Boost productivity
Explain or predict issues
Most of these organizations have recognized that the key to success is not to priorities
a particular need, but to create an environment where all three levels are accessible to
all employees, always.
Managers or Leaders must understand the fluid nature of the ERG theory and be able
to apply to model in different circumstances by understanding their employees.
Realizing their employees, managers able to apply ERG model to increase individual
motivation.
The things or factors that motivate people to do perform best are distinct and
different, learning about what workers want from their jobs, or what is more
important for them, may generate essential information for effective human-resource
management. So, guarantying the long-term profitability and survival of the
organization. Also, such learning may help organizations to find answers to questions
such as “why do some people invest greater effort in their jobs and why some people
are more effective in their jobs than others”.
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The End
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