Maslow’s hierarchy of needs- Self-Actualisation stage seems no more relevant:

The most widely spoken HR theory, Maslow’s hierarchy of needs theory, has lost some of its relevance to a certain extent. At least that’s the way it seems from the furore that has been caused in the corporate world with regards to executive compensation which the government will decide. This is in context of the financial institutions which have taken help from the federalUS government after the financial crisis hit everyone

Maslow’s hierarchy of needs talks about the needs’ hierarchy starting from the basic needs to safety needs to belonging and love needs i.e. acceptance in society. Majority of the population in the world falls in any of these 3 categories of needs. The next need is of self-esteem and then there is the topmost need of Self-Actualisation. A person who has reached the self-Actualisation stage does not think of money as the motivating criteria. This looks good in academics but not in real life.

Financial institutions in the US are in need of competent people who can get these troubled institutions out of the problems. The HR department of these firms and the government is finding it difficult to hire people since these people want higher salaries and bonuses without government intervention. They also are averse to these jobs since the pay compensation will be scrutinized but the media thread-bare and the government will also not give them a free hand in working the enterprises out of its hole. The media will discuss these issues in the living room of the common man who works for the real economy on the floor of the factory. The financial managers are already under fire for the crisis and if the common man finds out that they are still being paid high salaries, it will result in problems for the government who is bailing out these institutions with the tax payers’ money.

The point now is why are the people who have crossed 45-50 years of age and amassed huge amount of wealth wanting salaries, knowing well that it is the fault of people like them who are responsible for the crisis. To be a bit on the blunt side, the greed of these people. These people are in the self Actualisation stage yet they want money. Why do they not take it as a challenge to turn around the banks a la Lee Iocacca who turned around Chrysler? If they are successful in this, automatically they will get there bonuses and there premium will increase for there next job. Moreover the common man will get his confidence restored in the financial system and the people who run it.

Apart from this; the two most recent examples which defy the self Actualisation stage are of the Satyam Chairman Ramalinga Raju and former NASDAQ Non- Executive Chairman Bernard Madoff. Both these people were billionaires and respected in society.

Ramalinga Raju had a successful company and was almost a deity in his home town ofHyderabad due to the vast amount of opportunities he created for the locals. The Rs. 7000 crores scam was completely uncalled for. He had everything going for him.

Bernard Madoff was a rich a fund manager of an asset management company and respected in society. There was no need for him to run a Ponzi scheme to the tune of almost $50 billion.

Thus the needs theory has lost its relevance due to a certain type of people, for whom; money is the end all, be all. Maslow of course need not be blamed for his theory; it’s just that nowadays people behave totally irrationally.