Clayton Alderfer's ERG Theory: Heroes of Employee Engagement No.7

Clayton Alderfer's ERG Theory: Heroes of Employee Engagement No.7

Taking a theory as well-known as Maslow’s Hierarchy of Needs and improving on it is a bold move, but that’s exactly what Clayton Alderfer did with his ERG Theory.

Who is Clayton Alderfer?

Clayton Alderfer was an American psychologist who held academic posts at Yale and Rutger. He’s known for his study of workplace race relations – and for his rebuilding of Maslow’s famous pyramid. Let’s have a closer look at Alderfer’s motivational model, 1969’s ERG Theory.

What is ERG Theory?

Alderfer’s ERG theory on employee motivation looks at three levels of need: Existence, Relatedness and Growth. The ERG theory is an adaptation of  Maslow’s theory on the hierarchy of needs.

One of the best known theories for understanding human psychological requirements is Maslow’s Hierarchy of Needs. This identifies five levels of motivational needs, beginning with basic requirements (warmth, safety) and progressing to self-actualisation (the desire to become the best versions of ourselves). According to Maslow, to reach the peak of the pyramid the needs on the lower tiers must first be met.

So far, so familiar. Alderfer carried out empirical research and made key adaptations to Maslow’s theory. Firstly, his revised model cuts back to just three levels of need: Existence, Relatedness and Growth (ERG):

  • Existence
  • Relatedness
  • Growth (ERG)

These refer to basic needs, social and external esteem, and internal esteem and self-actualisation. The Psychology of Employee Engagement eBook. Free download.

Secondly, Alderfer identified that needs aren’t progressive. Even if they’re working in an uncomfortable and ill-equipped office, an academic may still come up with ground-breaking research if they have internal self-esteem (Growth).

Thirdly, focussing on only one need at a time can have a detrimental impact. An employee who has their basic Existence needs in place will struggle with motivation if their Growth needs aren’t catered for. Alderfer identified the “frustration-regression principle”; where employees revert to other needs in such situations. For example, a chatty and disengaged-seeming employee who is frustrated by their lack of growth, may be channelling their efforts into gaining self-esteem from colleagues (Relatedness).

Our last take-away is to bear in mind that the relative importance of the three needs varies between individuals and according to circumstances. For instance, if you come to work with a cold, you will be more concerned about your environment and bodily comfort that day than usual. In this case, how can organisations prioritise the different needs?

Applying Alderfer’s ERG Theory to employee engagement

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 least 23 articles that have taken the theory, analysed 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 organisations have recognised that the key to success is not to prioritise a particular need, but to create an environment where all three levels are accessible to all employees, at all times.

Examples of ERG theory in the workplace

We may have raised an eyebrow at Google’s unconventional bean bag-filled workspaces, rooftop allotments and curriculum of ’employee to employee’ learning. However, what Google has done here is to create a stimulating environment which encourages colleague interaction, informal learning opportunities, and has comfy chairs. All ERG needs are met at once.

Glassdoor’s recent research into the UK’s best employers ranked Google as number 1, with Hiscox also in the top ten. The insurance company rated well for encouraging autonomy, staff interaction, office space and friendly management. Again, all ERG boxes are ticked.

Understanding Alderfer’s ERG Theory as engagement ‘drivers’

ERG relates to several of our engagement drivers, starting from the bottom:

  • Existence

This ties in closely with the workspace Environment. Workplaces can be designed to improve employee performance by removing distractions while also encouraging focus and collaboration.

  • Relatedness

Relatedness tips a hat to the Freedom of Opinions driver. Do your colleagues feel their opinions count with both their managers and co-workers – even if they don’t always agree? It’s important that staff can forge strong Peer Relationships too. By creating a space of understanding and expression, employees may contribute to your latest innovative ideas.

  • Growth

Growth, obviously, covers Growth and personal development. One of the most important factors we require from our work in order to reach the holy grail of ‘self-actualisation‘.

Final words

Keep ERG theory in mind when you’re planning and steering your employee strategies. Alderfer’s seminal theory is clear and relatable, building on Maslow’s model and taking individual priorities into account. Ensuring your employees have everyday access to all three levels will help create, engage and retain that all-star motivated workforce. Thank you, Clayton Alderfer!

Conduct an employee engagement survey to see how best to best apply the ERG theory.

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