Green HRM Practices and Environmental Performance

Introduction

A number of enterprises have historically adopted a compliance-based approach within their environmental initiatives, guided by rules and legislation. However, over recent years, new consumer needs, consumer boycotts, global environmental standards, dynamic preferences, and other environmental factors have influenced the core values and fundamental business strategies of corporations (Daily, Bishop, & Steiner, 2007). Organizations are part of society, and it is imperative that they function as team players — this is where the concept of green management becomes relevant. A key idea now is that a company's outcomes are strongly impacted by environmental concerns (Tariq, Jan, & Ahmad, 2016).

Environmental and human resource (HR) management's effect in the business context relates powerfully to a broader association between organizations' economic and environmental performance. It is frequently argued that improved environmental performance results in improved economic performance. Growing environmental concern and awareness has caused public regulatory agencies and other players to broaden environmental priorities. Furthermore, companies have invested in their respective environmental management structures to enhance their reputation in society and reduce vulnerability to environmental catastrophes (Kassinis & Vafeas, 2006). Buyers are focusing increasingly on companies' environmental conduct, and this affects their brand loyalty and purchasing preferences (Autry et al., 2013; Dangelico & Pujari, 2010). A growing share of chief executives has prioritized environmental sustainability, making it a permanent subject on their corporate agendas (McKinsey, 2014). Recent research has concentrated on HRM practices' role, targeted at the management of individuals and tasks towards desired goals (Boxall, Purcell, & Wright, 2009, p. 1). HR departments aim to develop the environmental performance of their organizations — also termed green HRM — and offer empirical backing to the notion that certain green HR practices have a positive relationship with the environmental performance of companies (Guerci, Longoni, & Luzzini, 2016).

Green HRM Practices and Organizational Performance

For ensuring a firm acquires proper green contributions and job performance from its workforce, modification or adaptation of the HRM function to become green is essential. Traditionally, human resource departments are responsible for eighteen HRM functions: job analysis, job design, HR planning, selection, recruitment, hiring, induction, development and training, welfare management, performance appraisal, salary/wage and compensation management, career management, employee movement management, safety and health management, discipline management, labour relations, incentives management, and grievance management. Going green with respect to HRM functions entails including practices, policies, and procedures that guarantee appropriate green contributions and job performance by personnel. Ideally, all functions can be made green. For instance, the employee recruitment function can foster effective environmental management by ensuring that newly recruited individuals share a company's environmental ideals and understand its environmental culture (Opatha & Arulrajah, 2014).

Although the broader HRM literature accepts the existence of a relationship between specific HRM practices — such as personnel engagement — and positive business outcomes (Hunton-Clarke et al., 2002), literature on Green HRM is marked by assertions and counter-assertions (Jabbour, Nagano, & Santos, 2008; Jabbour & Santos, 2008). There is also a lack of empirical research connecting distinct HRM practices across the many levels or steps of Green HRM implementation. One recent review (Redman, Maguire, & Renwick, 2013) notes that much existing information on Green HRM practices is based on practice rather than rigorous study. There is a need for more precise empirical evidence on the link between different components of the HRM system — such as personnel engagement, personnel attitudes towards environmental programs, and whether Green HRM is profitable in terms of candidate attraction, retention, and related factors (Benn, Teo, & Martin, 2015).

Theoretical Background and Hypotheses Development

Managers, corporate scholars, and policymakers have been greatly drawn to stakeholder theory. A stakeholder perspective of organizations developed with the proposition that corporate executives must formulate specific processes for addressing stakeholder expectations. Drawing from stakeholder theory's instrumental significance, literature has furthered the notion that, for long-term corporate wealth maximization, a broader group of players ought to be considered stakeholders, and managers must devise and implement specific processes for addressing stakeholder expectations — this is termed stakeholder management. In this regard, Preston, Sachs, and Post (2002, p. 8) stress that an organization's capability of generating sustainable long-term wealth is determined by its relations with key stakeholders. Additionally, any distinct stakeholder relationship can be the most crucial one on any given issue or at any juncture. Considering lawmakers' and society's immense emphasis on environmental matters, as well as the financial performance, innovation, and competitiveness benefits linked to better environmental performance (Majumdar & Marcus, 2001; King & Lenox, 2002), a large number of authors (e.g., Kassinis & Vafeas, 2006; Guerci, Longoni, & Luzzini, 2016) have suggested an association between environmental performance and stakeholder pressures.

H1: Environmental Orientation Human Resource Management (EO-HRM) adoption has a positive influence on environmental performance.

Conclusion

Sustainability is a concept that is applicable to the HRM function itself. Quite often, strategic HRM reports reflect an assumption that people in a firm are to be exploited and consumed rather than retained and developed (Ehnert, 2009). A more comprehensive green HR management practice can place the concept of sustainability at the core of personnel management. This approach offers potential advantages for both the company and its employees. For the former, some evidence exists of an association between improved environmental performance and financial performance — a relationship labeled the green pays claim (Crotty & Rodgers, 2011). These findings, combined with robust research reporting a strong link between HRM generally and corporate performance, indicate that Green HRM may play a role in improving both environmental and financial performance.

Equally, green HRM practices will likely improve the workforce's workplace wellbeing by improving the work climate and meeting the demands of twenty-first century employees who are growing increasingly environmentally aware. In sum, Green HRM is capable of positively influencing environmental wellbeing as well as business performance (Renwick, Redman, & Maguire, 2013).

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