HR Management & Compliance

Organizations Have Needs, Too—A Hierarchy for HR Professionals

By Amanda C. Richards, MS, MA

Over the years, theories of human motivation originally put forward by psychologists such as Abraham Maslow have become an integral part of the body of HR knowledge. Today, few would dispute the importance of motivating employees to achieve performance results. We generally accept as fact that the better you can understand and focus employee motivation, the better you can align individual and business goals and, all other things being equal, the better your bottom line. Given that individual motivation is so vital, however, it is interesting that we have never broadened that analysis to look at the motivation of organizations in the same way.

At the organizational level we don’t call it motivation or personality, we call it culture. This article asks, are individual personality and organizational culture really so different? We tend to look at the needs of an organization in purely financial terms, but it is not so far-fetched to believe that this entity we call a business, run by human beings with predictable needs and behaviors, would itself have predictable needs that can be modeled across organizations. A needs analysis makes it possible to better understand the drivers or “motivation” of an organization. An understanding of this model will allow HR practitioners to more precisely align strategy with the needs of the organization based on a deeper understanding of the factors that drive it. It might even make it possible to anticipate organizational behavior before it occurs.

In this article I will argue that that there are identifiable, common, predictable needs that drive much of organizational strategy and behavior. The Hierarchy of Needs developed by Abraham Maslow is an excellent model with which to frame the discussion.

Maslow’s Hierarchy of Needs

Abraham Maslow theorized that five basic needs, shown in the chart below, are what ultimately translate into human motivation and behavior.

Beginning at the bottom of the hierarchy, basic Physiological needs include hunger, thirst, and bodily comfort. Safety is the need for security and freedom from physical or other imminent danger. Belongingness and Love is the need to be accepted and affiliated with others. Esteem is the need to be competent and to achieve. At the very top of the hierarchy is Self-Actualization, the need to find fulfillment and have a sense of realizing one’s potential. Taken as a whole, the first two needs are about existence, the second two are about relatedness, and the last is about growth.

Maslow theorized that these needs are hierarchical in the human psyche. Thus, the model implies that if someone is hungry and has nothing to eat, food will be the primary concern of that individual until such time as that need is met. Along the same lines, someone who is lonely and unsatisfied in their personal relationships will be more concerned with meeting that need than with a sense of realizing his or her potential as a human being. Although the model is never entirely linear (i.e., physical needs can take precedence at almost any time in someone’s life, and we are never completely unaware of the breadth of all of our human needs), generally speaking, individuals find ways to meet their needs and over time progress upwards in the hierarchy.

The Organizational Hierarchy of Needs

Now, let’s take that same model and apply it to an organization.

The new model looks remarkably similar and follows the same underlying stages of development.

Survival (Existence Need)

Starting at the bottom of the hierarchy is the need for survival. The survival need is the most basic need and will take precedence over all others until it is met. Survival needs for human beings are essentially food, water, and bodily comforts. “Survival needs” for organizations are much the same—the resources required for basic subsistence: economic needs (the lubricant for the system), manpower needs (the energy that drives the system) and basic tools (phones, computers, etc. that support and reinforce the system). All organizations, regardless of industry or objectives, require these three resources for simple subsistence.

Safety (Existence Need)

Once basic, survival needs have been met, the need for safety takes precedence. “Safety” refers to the absence of any type of perceived threat. Bankruptcy is a threat, but so is a hostile takeover, high turnover, or a new competitor. Not only are there many different types of threats, but just as individuals have widely varying points at which they feel safe, so do organizations. The essential element to satisfy the need is not a specific dollar amount in the bank or a set critical mass to be reached, but rather the collective sense on the part of the organization that it is not in imminent financial or other jeopardy.

Infrastructure (Relatedness Need)

Once an organization has met its existence needs (Survival and Safety), relational needs begin to dominate. To develop a sense of self, businesses ask the age-old questions, “Who am I?” or “How do others see me?” More specifically, what are my core capabilities? How do I fit into the competitive environment? Am I competing effectively, rather than simply competing to survive?

In order to answer any or all of these questions with any certainty, there must be infrastructure. Basic metrics and reporting, budgets, compensation plans, performance review tools, and communication systems are all examples of organizational infrastructure. In essence, “infrastructure” consists of the internal systems that allow information to be adequately recorded, analyzed, shared, and stored. When the infrastructure need is dominant, major business and investment decisions will be geared towards the development of these systems. It is this information that provides answers to the questions above and leads to the ultimate goal of the analysis—business strategy.

Partnership (Relatedness Need)

Once an organization has sufficiently developed a sense of who it is and what it is capable of, its need for partnership comes to the fore. “Partnership” refers to a need to complete the process of establishing a sense of self-worth by relating with others. For a business, this means partnering with constituencies rather than engaging in dominant or adversarial relationships. Constituencies are the primary groups to whom an organization has responsibility and for whose benefit it operates. Most HR practitioners agree on at least the following four constituency groups across organizations:

  1. Owners/Investors
  2. Employees
  3. Clients
  4. Community

An amicable relationship with constituencies is not the same as a partnership. Partnership is the need for the organization to seek and engage in equitable and mutually satisfying relationships that draw linkages and work towards common goals. When partnership needs are dominant, satisfaction comes not just from financial success but from how success is achieved, typically via understanding, sharing, learning, and growth. It is important to note that not all organizations reach this stage of the hierarchy.

Actualization (Growth Need)

The highest need for an organization is actualization. “Actualization” is the need for an organization to fulfill what it perceives to be its economic and social potential. The primary question at this stage of development is whether the organization is producing in meaningful ways, rather than simply in profitable ways. The entity wishes to develop itself and its constituencies and contribute to the greater good. Investing in community development, scholarship funds, and providing other services are all examples of behaviors we would expect to see at this stage of development. These priorities become an integral part of business strategy, rather than an occasional concern. In addition, the outlook and emphasis in this phase is much more long-term—a long and productive life over current profitability. (The degree to which true capitalism encourages this stage of development would be an interesting topic for future discussion.)

Conclusions

The organizational model looks remarkably similar to the individual model and follows the same underlying stages of development with but one exception: Whereas in Maslow’s hierarchy for individuals the need for belongingness and love comes before the need for a sense of competence and achievement (esteem), for organizations the need for self-knowledge and competence (infrastructure) precedes the need to feel a sense of belonging with others (partnership).

Just as Maslow’s model is important in understanding human needs and behaviors, the organizational needs model can help us draw conclusions about today’s businesses. In fact, the implications for leaders and human resource professionals alike are profound.

  1. An organization’s behavior is predictable based on its needs. The hierarchy of organizational needs model has implications not only for what a given organization should do, but also for what it is able to do and often for what it actually will do based on its stage of development. For example, take an organization that does not, as a rule, deal with internal performance issues. It seems utterly illogical—why continue to pay someone who is not performing? But the reason is most often an underlying need that has not been met. Until an organization develops infrastructure, for example, it does not have a secure sense of self that will allow it to make confident and consistent decisions. Such organizations will often procrastinate on the “tough calls.” We can actually predict this problem based on the organization’s stage of development.
  2. An organization should not be pushed into making strategy investments and decisions that are out of step with its dominant need. It may be very true that a business is in desperate need of a compensation plan. If, however, it is dealing with a survival or safety issue, it will have trouble committing to an infrastructure investment (which is a higher-level need).
  3. Organizations can be out of touch with their own needs. How many of us can say that we always know what we need? It is very difficult to step back and view a situation from an impartial viewpoint, particularly for leaders who may be very vested in the business. This makes it especially crucial for HR practitioners to learn to assess organizational needs. With our overarching view of the organization and training in motivation, we are in a unique position to assess and advise.
  4. Needs are dynamic. Although an entity may have reached a higher stage of development in the hierarchy, lower needs can take precedence at any time. Survival resources must be available to regularly refuel and if survival needs are at any time threatened, an organization will triage and begin mobilizing in different ways and with different priorities. When it reaches a certain level of maturity, a business may be less likely to have lower needs threatened because it has reserves and an understanding of how to meet its lower needs as necessary. But, today’s business environment is too changeable and fast-paced to ever think that lower needs can be permanently met.
  5. Needs are relative. It is the perception that will predict behavior not the reality. This is a key distinction and it accounts in large part for the very different responses of organizations and leadership groups to what can appear to be similar motivating factors.
  6. Some organizations will never reach the higher levels of the hierarchy. It is tempting to believe that businesses (and people) must change if they are behaving in ways that do not lead to growth, are irrational, or worse, are self-destructive. Unfortunately, this is simply not the case. Some organizations have low expectations or lack the skills and resources to meet their own needs. It is important not to assume that every organization will progress in an orderly fashion through this five-tier hierarchy and reach actualization. Depending on the skill of the leadership group, the prevailing business environment, and a host of other factors, an organization (just like an individual) can stagnate at any level of need.

Implications for Human Resources

Looking at strategic initiatives and policy from this developmental vantage point has direct implications for HR programs and initiatives. First, the model makes a powerful statement about what organizations need in order to develop and succeed. Second, the model contends that what they need is not the only question, but that when they need it is equally important. Whether any particular initiative or program will be operationally successful depends at least in part on the development of the organization. Third, HR practitioners are particularly well positioned to assess the development of organizations and to use this information to guide operational leadership. A deeper understanding of the organizational hierarchy of needs can make each of us better practitioners, strategists, and leaders.

 



Amanda C. Richards, MS, MA, is a senior consultant with Converge HR Solutions. She can be reached at amanda@convergehrsolutions.com or you can visit Converge online at www.convergehrsolutions.com.