ERG theory proposes that there are three categories of needs that motivate behavior: existence needs, relatedness needs, and growth needs. Existence needs are basic material needs like food and shelter. Relatedness needs focus on maintaining relationships and interacting with others. Growth needs involve personal development and fulfilling meaningful work. The theory argues that people are motivated to fulfill these different needs and may do so in a non-hierarchical manner, addressing multiple needs simultaneously rather than sequentially as proposed in Maslow's hierarchy of needs.