PMI Bangalore Chapter

ERG Motivation Theory and Implications for Managers

ERG Motivation Theory and Implications for Managers

– Suparna Kapoor

One of the most challenging task for Managers and Leaders is to ensure that people and team members are more productive and stay motivated enough to actually get things done as per the organizational and project requirements.

Social scientists have been studying motivation for decades, trying to find out what motivates our behaviour, how and why?. Dozens of theories of motivation have been proposed over the years. Some of the popular ones are Maslow’s hierarchy of needs, the two factor or hygiene theory by Hertzberg, Theory X and Theory Y by Douglas McGregor , ERG Theory, Equity Theory, Vrooms Expectancy theory etc. For the purpose of this article we will look only at the ERG theory and explore how it has an impact on employee motivation and what can Managers and Leaders do to have a positive influence on motivation.

Motivation is a theoretical construct used to explain behaviour. It gives the reason for people’s actions, desires, and needs. This definition also implies that one of the prime reasons for the way people behave is to fulfil a particular need or desire. Many of the theories of motivation revolve around this construct of “human need”.

Work motivation “is a set of energetic forces that originate both within as well as beyond an individual’s being, to initiate work-related behaviour, and to determine its form, direction, intensity, and duration”. The diagram given below illustrates the components of work performance and motivation is a key component in it. In fact ability and environment also influence the employee motivation thus impacting performance. Thus, it is the role of the Project Manager not only to ensure requisite skills/training and resources but also to work on their team member’s intrinsic motivation which comes from achievement and recognition.


ERG Theory

The ERG Theory was proposed by Clayton P. Alderfer in 1969. The model was developed in his book: “Existence, Relatedness, and Growth; Human Needs in Organizational Settings”.

The ERG Theory talks about three levels of needs and is based on Maslow’s Needs hierarchy which proposes 5 levels of needs. The three levels of needs are:

Existence Needs –This group of needs is concerned with providing the basic requirements for material existence, such as physiological and safety needs.

In a work context, this need is satisfied by money earned in a job for survival and other existential requirements.

Relatedness Needs – This group of needs focuses on the desire to establish and maintain interpersonal relationships with family, friends, co-workers and employers. This need includes the need to interact with other people, receive public recognition, and feel secure around people.

In a work context and given the amount of time most people spend at work this need is normally satisfied to some extent by their relationships with colleagues and managers. This need can also be fulfilled by creating Communities of practice, Mentorship & coaching program, regular review and interaction meetings, feedback sessions, team outings etc.

Growth Needs – These needs are about the fulfilment of desires to be creative, productive and to complete meaningful tasks in order to build and enhance a person’s self-esteem through personal achievement.

These needs are all about personal development. In the work context, a person’s job, career, or profession can provide a significant satisfaction for growth needs. These needs can be met through promotion, job enhancement and job rotation, training and other developmental opportunities, freedom to experiment with new ideas, providing feedback on improvement areas, ensuring that the employees and teams understand the significance of the task and how it connects to the organizational objectives/project vision etc.

The ERG model is fluid, meaning 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 must understand the fluid nature of the ERG theory and be able to apply the model in different circumstances by knowing their team members and other stakeholders.

In addition, the ERG model acknowledges that if a higher level need remains unfulfilled, the individual may regress to lower level needs that appear easier to satisfy. This is known as the frustration-regression principle. This frustration-regression principle impacts workplace motivation.

Now let’s look at how it plays in a workplace. For example, if the workplace is highly controlled and position oriented and not too many opportunities exist for organizational/project members to communicate and interact among themselves or with senior managers and leaders. In such cases the organizational culture is all about work and task and the only conversations people have in the workplace community is related to problems, issues, challenges and transactions to achieve targets the relatedness need remains unfulfilled. So there exists a high probability that the employees or team can regress to lower level Existence needs and seek motivation through only salary, perks and benefits. This can create problems for an organization since financial advantages can only be provided to a certain extent & there is always an upper limit to it.

Similarly if growth needs are not being fulfilled and employees do not seem to find meaning in their work – they believe that they are considered just as tools or resources to meet the organizational goals and objectives, an insignificant cog in the wheel, it is again possible that the members can regress to the existential need centering on money. Hence it’s important that all the three needs are balanced and focused attention is given to fulfilment of all three needs. It is a key role of managers, leaders and HR community to ensure that opportunities exists at all levels within the group, team or organization to fulfil the relatedness and growth needs through structured or unstructured processes and interventions.

This theory can also be used to advantage by Managers in situations where financial constraints exist, within the organization in terms of salary and other benefits and the employee workforce is demotivated due to these factors. (These constraints could be temporary due to market conditions, competition, downturn, etc. or inherent to the organizational remuneration policies). In such a scenario the employee motivation can be enhanced by providing them more opportunities to learn, gain expertise in cross-functional domains, experiment with new processes, products or technologies, create forums for regular interactions, having more team related activities and generally enhancing the flow of communication among various levels in the organization. This will have an impact on the relatedness and growth needs thus impacting their motivation positively. The employees & team members need to get a feeling of belongingness and contribution. This in turn will have a great impact on improving the organizational performance.

Thus, we can see how the knowledge and understanding of this particular theory can help managers to motivate their team members and counterparts in other groups/projects through a multi pronged approach and not look at money and positional power as the only source of motivation.