S/M/147. Alderfers ERG Theory - Performance Management

Motivation is a process of arousing and sustaining goal-directed behavior induced by the expectation of satisfying individual needs. An employee's performance typically is influenced by motivation, ability, and the work environment. Knowing how and why to motivate employees is an important managerial skill. Clayton Alderfer derived the ERG theory, which is an extension of Maslow's hierarchy of needs. Alderfer classified the needs into three categories: existence, relatedness, and growth. Existence needs are the physiological and safety need categories. Relatedness needs involve interpersonal relationships. Growth needs are those related to the attainment of one's potential. Measuring employees performance and evaluating the contribution of each individual is essential to achieve the goals of a company. To increase organizational productivity and employee performance, managers have to employ certain motivational techniques within their operational processes. This article gives an insight into the operational processes used by Hitachi Automotive Products to derive the maximum output from its employees, motivating them to work harder for companys growth. In return Hitachi provided compensational packages to the best employee in order to motivate and arouse. Hitachi enjoys the benefits of retaining employees for a long period by ensuring the fulfillment of their essential needs. Thus they used the ERG theory to their maximum advantage. Managers should focus on meeting employees' existence, relatedness, and growth needs in order to provide them with job satisfaction. It is essential that before a manager can motivate others, he himself must be motivated. Managers must recognize that an employee has multiple needs to satisfy simultaneously.