This theory states that human needs have certain priority and arise in the form of hierarchy. He has put various needs into five levels ranging from the lowest order needs to the highest order needs having a definite sequence of domination.

When one set of needs is satisfied, this kind of need ceases to be a motivator forcing a person to go for the next level of needs following the higher order needs.

These needs are further explained as follows:-

(i) Psychological needs:

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These are primarily the needs arising out of physiological or biological tension. The needs include the basic needs for food, water, shelter and sex.

(ii) Safety needs:

Safety and security needs are provisions against deprivation in the future. It also involves a sense of protection against danger and threats. In a civilized society, a person is usually protected from threats of violence, or extremes in climate or fear of material safety, hence, safety, needs dwell on economic and job security, life and medical insurance and other protective measures to safeguard satisfaction of psychological needs in the future, which may be unpredictable.

(iii) Love and social needs:

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After the needs of the body and security are satisfied, then a sense of belonging and acceptance becomes prominent in motivating behaviour. These needs are for love, friendship and social interaction. We look for an environment where we are understood, respected and wanted. That is one reason for ‘polarization’ where people of similar background and beliefs tend to group together “love my neighbour” has perhaps a profound meaning.

(iv) Esteem needs:

This is an urge for achievement, prestige, status and power. It includes a desire for self respect and the respect of others. Self respect is the internal recognition. The respect from others is the external recognition and appreciation of one’s contribution. This would affect self – confidence, independence, status, reputation, and prestige.

(v) Self-actnalisation needs:

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This is the highest level of need in Maslow’s hierarchy and is the need for self – fulfilment to realize one’s capacities and potentialities. The person seeks challenging work assignments that allows for creativity and opportunities for personal growth and advancement.

This need is soul searching and inner oriented. A self-actualised person is creative, independent, content, spontaneous and has a good perception of reality, and the person is constantly striving to realize his full potential.

Maslow’s Theory made management aware that people are motivated by a wide variety of needs and management must provide an opportunity to satisfy these needs through creating a physical an conceptual work environment so that people will be motivated to achieve organisational goals.

The management may cater to psychological needs by offering adequate wages and salary, acceptable working hours’ and working conditions; like heat ventilation, rest rooms, lighting etc., Some bonuses and fringe benefits will be motivational.

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The second level need of safety and security can be satisfied by management’s initiative to provide life insurance, job security, medical insurance, cost of living increment, pension plans etc.,

The economic security, to ‘some degree is provided by law in the form of minimum wages, unemployment benefits, welfare benefits, and safety is provided by law and other agencies. In addition the business and industrial environment provides basis for satisfying the first two needs. Hence management must create an atmosphere to satisfy higher levels needs by taking to following steps:

a) To satisfy social needs.

i. Provide opportunities for employees to interact, by providing coffee breaks, lunch facilities and recreational activities like picnic etc.

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ii. Create team spirit by keeping work groups informal wherever possible.

iii. Conduct periodic meetings with all subordinates.

b) To satisfy esteem needs.

i. Design more challenging tasks and provide positive feedback on performance of employees.

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ii. Give recognition and encouragement for performance and contribution and delegate additional authority to subordinates.

iii. Involve subordinates in goal setting and decision-making process.

iv. Provide adequate training and executive development to help the employee successfully accomplish his goals and increase the competency on the job.

v. Some of the symbols status that management can provide job title, privileged parking, private secretary, promotion, company car, stock options, etc.

c) To satisfy self actualisation needs.

i. The employees should be given an opportunity to shape their own jobs.

ii. Give the employees the freedom of expression.

iii. Encourage and develop creativity.

iv. Provide meaningful work that requires the development and use of full potential.