Week 3 Lecture.pptx

Emerging Trends in Sustainable HRM : Green HRM Practices Presented By : Dr Noor Ullah Khan

Paradigm shifts in HRM Table 1: Stages of Development in HRM Scientific Management

Period

Focus

Purpose

1918-1945

Focuses on labor division and issues related employees monitoring

Efficiency

Human Relations

1945-1965

Discusses relationships of employees in context of personal and social domain

Cooperation

Revisionism

Strategic HRM

Sustainable HRM

1965-1980

1980-now

2010- onwards

Provides clarity on job creation and autonomy of employees’ involvement related areas

Autonomy

Source: De Prins et al. (2014, p. 8)

Primarily focus on areas of strategic and managerial orientation

Performance

Based on principles of human related aspects in a broader agenda of HRM and sustainability

Sustainability

Overview 

Human wellbeing, economic growth and sustainability depends on how well we manage the environment ( Kahle & Gurel-Atay, 2013). Sustainability has emerged as a key area of concern for organizations to address major environmental issues e.g. global warming, climate change, water and air pollution and degrading environmental performance (IEA, 2015).

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Growing environmental awareness among stakeholders and stringent environmental regulations are building pressure on organizations to adopt Green HRM practices and improve sustainable performance and reducing negative impacts on society and environment (Ghazilla et al., 2015).

What is Green HRM ? 

The term green human resource management (green HRM) was initially introduced by Renwick et al. (2008) is relatively a new research area that aims to align HRM practices and environmental management (Renwick et al., 2013).

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Green human resource management practices refer to the alignment of HRM practices with environmental management and inclusion of environmental aspects to traditional HRM practices such as green recruitment, green training, green performance appraisal, and green rewards (Jabbour, 2011).

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It is quite challenging for organizations human resource to implement environmental initiatives because of growing international environmental standards and low level of environmental compliance, ineffective environmental laws and regulations in developing countries (Daily et al., 2011).

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Similarly, Green HRM practices are also vital for adopting environmental management systems (EMS) such as ISO14001 and fostering pro-environmental behaviours (Boiral, Talbot & Paillé, 2015).

Major Green HRM practices  Green

human resource planning  Green job design and analysis  Green Recruitment and selection  Green training and development  Green performance appraisal  Green Compensation and Rewards  Green employee relations  Green Employee involvement (Daily & Huang, 2001; Govindarajulu & Daily, 2004; Daily et al., 2011 ;Jackson & Seo, 2010; Renwick et al., 2013; Jabbour, 2015)

Green HRM Challenges - How to Develop Green Abilities - How to Motivate Green Employees - How to Provide Green Opportunities

Renwick et al. (2013)

Ability Motivation Opportunity (AMO)

Developing Green Abilities

Green selection and Recruitment Training & Development

Motivating Green Employees

Providing Green Opportunities

Involving Employees in EM initiatives Green Performance management/ appraisal

Empowerment and engagement

Supportive pro environmental climate/culture

Figure 1: AMO Theory in Green HRM Source: Appelbaum et al. (2000); Renwick et al. (2013)

Ability Motivation Opportunity (AMO) Theory Ability–Motivation–Opportunity theory (Appelbaum et al. 2000) suggests that HRM practices that enhance the firm’s human capital via increased human capabilities translate into performance outcomes, such as higher productivity, reduced waste, higher quality and profit. According to AMO theory HRM works through increasing employees’ Ability through attracting and developing high-performing employees; enhancing employees’ Motivation and commitment through practices such as conditional rewards and effective performance management (PM); and providing employees with the Opportunity to engage in knowledge-sharing and problem solving activities via employee involvement (EI) programmes(Renwick et al. (2013).

Green HRM Theoretical implication 

Green human resource management (green HRM) is a relatively new area for research corporate sustainability. Most of previous studies evaluated green HRM based on qualitative approaches. Despite few studies on green HRM used quantitative approach (Ehnert, 2009; Renwick et al., 2013 ;Wagner, 2013; Zibarras & Coan, 2015; O'Donohue & Torugsa, 2016).

Green HRM practical Implications 

Organizations should effectively use green HRM practices to improve sustainable performance (Khan et al., 2017).

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Application of Green HRM practices such as green training, educating and rewarding their managers can be used to encourage proenvironmental behaviors within organizations (Robertson & Barling, 2013).

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Green HRM practices (selection and recruitment) can be used as effective tool to build green image and attract new talent for organizations. Managers of environmental performance appraisals should be held accountable for performance outcomes (Renwick et al., 2013).

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Green HRM practices (training and development) educate mangers about environmental aspects of the job and train them how to save energy, reduce waste, and create environmental awareness within the organization (Zoogah, 2011).

Green HRM Implications 

Companies should use green HRM practices such as green training, educating and rewarding their managers to encourage OCBE. A survey results has reported that only 8% of UK firms rewarding green behaviors with various types of rewards (Phillips, 2007, p. 9).

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Some US based firms pay more to eco-friendly CEO performance (Berrone & Gomez-Mejia, 2009). For successful EMS ISO14001 implementation and performance effectiveness required green HRM practices (Jackson et al., 2011; Govindarajulu & Daily, 2004; Sarkis et al., 2010).

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The implication of Green HRM Practices and EMS ISO14001 certification is miserably low in organizations at developing countries as compared to developed OECD countries e.g. (US, UK, Japan, Germany, Sweden, Australia). Major issues are cost consideration, extensive documentation, economic and social barriers in acquiring ISO 140001 certifications (Krut & Gleckman, 2013; Babakari et al., 2003).

Developing Green abilities: attracting and developing talented staff 

Recruitment and selection

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Attracting high-quality staff is a key HR challenge in the ‘war for talent’. It seems that some employers, particularly major multinational companies (Ehnert, 2009), are adopting GHRM practices as a form of‘ employer branding’ in order to improve their selection attractiveness for an increasingly environmentally aware younger generation.

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Employee training in EM

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Training in Green issues is widespread now in some countries. In the UK, a CIPD*/KPMG* survey reported 42% of UK organizations educating and training employees in business practices that are environmentally friendly (Phillips 2007) and training employees to comprehend the threats that climate change may pose on firms (Felgate 2006b). In the US, £300m has been invested in training for Green jobs under the Obama administration (Barton 2009)

The war for talent is a term coined by Steven Hankin of McKinsey & Company in 1997, and a book by Ed Michaels. McKinsey & Company is an American worldwide management consulting firm. It conducts qualitative and quantitative analysis to evaluate management decisions across public and private sectors.

*Chartered Institute of Personne and Development (CIPD) *Klynveld Peat Marwick Goerdeler (accounting firm)

Management development and leadership 

The Survey results that data from 156 plant level employees among 31 lean automobile assembly plants in North America and Japan reveals that GHRM practices ‘encourage a higher level of environmental training’, and the development of skills required for waste reduction (Rothenberg et al. 2001, p. 241).

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Training for management staff is also important for GHRM. As business schools are potentially seen as architects of a new ‘evolutionary course’ towards sustainability and environmental knowledge (Starkey and Crane 2003), they may play a key role in educating and developing environmental leaders in the future.

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Environmental management is also increasingly being included in MBA Programme core curriculum in countries such as China, and is seen to be the type of business education that empowers managers to start projects in EM (Fryxell and Lo 2003).

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The survey data reported that growing number of ‘Eco-MBAs’ programmes are incorporating environmental courses into their curriculum (BeyondGrey Pinstripes 2010). Some top business schools, such as SOM Yale University, offer a joint MBA and Master of Environmental Management (MEM) that combines environmental studies with HRM management. Other schools also offer “Green MBA” programs, an MBA in sustainable business, or MBAs with concentrations in sustainable business or corporate responsibility. These programs may or may not emphasize management specifically. https://www.environmentalscience.org/degree/environmental-mba

https://www.youtube.com/watch?v=UTJc5fqwbGI

Management development and leadership Continue… 

Dolan’s (1997) study of US MBA students found over half saying that they would take a lower salary to work for an environmentally responsible organization.

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CIPD/KPMG survey of 1000 HR professionals found 47% stating that they feel that employees would prefer working for firms that have a strong Green approach, and this would attract potential high-quality recruits (Phillips 2007). Comparative interview evidence from the UK and Japan (from 88 interviews among 53 companies) also indicates that it is ‘easier to hire highquality employees if a firm had a better environmental reputation’ (Bansal and Roth 2000, p. 724).

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For example, a survey of 94 Brazilian firms with ISO14001 certification found recruiters preferring candidates with environmental knowledge and motivation(Jabbour et al. 2010). Although there are as yet few systematic studies of ‘Green-collar’ recruitment practices, there is a growing advice industry of self-help guides on how to find a Green job that includes case study and employer interview evidence about their hiring practices (Cassio and Rush 2009). This literature reports the use of job descriptions and personnel specifications that emphasize environmental aspects of the job and interview protocols that probe applicant environmental knowledge, values and beliefs.

Green leadership 

In a study designed to develop a preliminary model for environmental leadership, interview and questionnaire data from 73 Canadian and US leaders (of for-profit and non-profit product and service organizations) reveals that their personal values ‘were more eco-centric, open to change, and self transcendent’ than other managers in different types of organizations (Egri and Herman 2000).

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The finding that personal values influence Green leadership behaviours is supported in Bansal and Roth’s study of 53 U.K and Japanese companies, which finds that single individuals tend to champion ecological responses, with their own values driving such decision processes rather than ‘a widely applied decision rule’ (Bansal and Roth 2000). Managerial attitudes and norms are seen to act as strong drivers for undertaking active EM behaviours from a study of organizations in the US wine industry (Marshall et al. 2005).

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Observed learning processes of managers in medium-sized and large German and Dutch organizations reveals a participatory leadership style being used, with leaders active in involving employees in sustainability processes (Siebenhuner and Arnold 2007).

Motivating Green employees 

Using PM in EM presents many challenges, how to measure environmental performance standards across different organizational departments/units, and gaining useable data on the environmental performance of these units and staff. Some firms have addressed this issue by installing corporate-wide environmental performance standards, and Green information systems/audits to gain useful data on environmental performance (Marcus and Fremeth 2009).

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One way in which Green PM systems can be successfully initiated is to develop performance indicators for each environmental risk area (TUSDAC 2005). Green performance appraisal (PA) covers topics such as environmental incidents, use of environmental responsibilities and the communication of environmental concerns and policy. Issues involved in environmental PA suggest that environmental managers to be held accountable for EM performance in additionto wider performance objectives

Motivating Green employees Continue.. 

Pay and reward systems

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In line with a strategic approach to reward management, defined as the aligning of pay practices and corporate objectives, there is some evidence for organizations developing reward systems to incentivize EM, especially for senior managers.

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In Britain, for example, ICI* have included environmental targets as part of their performance related pay assessment for senior managers (Snape et al. 1994, p. 134).

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A study by Cordeiro and Sarkis (2008) of 207 US firms from the Standard & Poor-500 finds that only in firms with an explicit linkage between environmental performance and executive contracts is there evidence for an impact of environmental performance on CEO compensation levels.

*Imperial Chemical Industries S&P 500, or just the S&P, is an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE, NASDAQ

Motivating Green employees Continue.. 

Some 40% of UK employers are reported in a CIPD reward survey (Cotton 2008) as reviewing their reward and employment conditions policies and practices to see whether they support their environmental objectives.

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In Britain, some examples of company practice include the use of a ‘carbon credit card’ and cash incentives for staff to purchase hybrid cars (Brockett 2006; Davies and Smith 2007), incentive schemes rewarding good attendance/performance with a ‘Green benefit card’ enabling staff purchases of Green products (CIPD 2009, p. 4), and annual awards dinners to recognize exemplary behaviour in EM (Simms 2007, p. 39). Additionally, financial incentives have been introduced into company EM reward strategies in the UK, such as tax incentives and exemptions to promote loaning bicycles to employees, and the use of a less polluting car fleet (Davies and Smith 2007).

Providing Green opportunities: employee involvement 

Employee involvement in EM seems to have its effects through three core processes: First, through tapping employees’ tacit knowledge gained through their close links to the production process (Boiral 2002); second, through engaging and empowering employees to make suggestions for environmental improvements (Govindarajulu and Daily 2004); and third, through developing a culture in the workplace which supports EM improvement efforts.

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Tacit knowledge

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A study of worker participation in EM initiatives in the NUMMI automobile plant in the US found that EI makes an important contribution to improving environmental performance as ‘employees possess knowledge and skills that managers lack’ (Rothenberg 2003). This study goes further and provides an important insight into how worker knowledge is combined with managerial and technicalknowledge to improve EM. New United Motor Manufacturing, Inc. (NUMMI) was an automobile manufacturing company in Fremont, California, jointly owned by General Motors and Toyota

Providing Green Opportunities Empowerment and engagement 

Comparative case studies of UK and US companies reported that increasing employee feelings of psychological empowerment, because it increases their willingness to make suggestions for environmental improvements, is critical to EM (Kitazawa and Sarkis 2000). Survey data from 232 Australian manufacturing firms reported a positive association between the level of employee empowerment in EM and environmental performance (Simpson and Samson 2008).

Supportive cultures for EM 

Employee involvement is seen to be a very effective approach to developing a strong pro-environment culture in small and mediumsized enterprises (SMEs), a sector especially difficult to reach in environmental terms, with findings from a Netherlands survey of 194 employees in eight metal businesses reporting that EI campaigns in EM (which put information at the center of joint management and employee decision-making) have the greatest influence in reducing the costs of waste processing (Klinkers and Nelissen 1996).

Providing Green Opportunities Continue.. The union role in EI and EM 

Some recent developments in the UK include environmental education programmes for rank and file union members, joint management and union training programmes in EM, and the development of workplace environmental representatives, the so-called ‘union Green representatives’ (TUC 2009). Currently the TUC is campaigning for legal rights for such union Green representatives to take reasonable time off during working hours to promote sustainable work practices, carry out audits, consult on EM polices and receive training. The Trades Union Congress (TUC) is a national trade union centre, a federation of trade unions in England and Wales, representing the majority of trade unions

Source : Renwick et al., (2013)

Sustainable Performance 

Triple bottom line (TBL) is an accounting framework with three elements: social, environmental and financial. Many organizations have adopted TBL framework to evaluate their sustainable performance with a broader perspective to create greater business value.

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The term TBL was coined by John Elkington (1994) According to Hall (2011). TBL approach measures performance beyond the traditional measures of profits, return on investment, and shareholder value and include environmental and social dimensions (People, planet and profit). Sustainable performance (SP) refers to the integration of economic, environmental and social performance measuring overall organizational performance Maleticˇ et al., 2014).

Sustainable Performance Continue.. 

TBL approach can be applied to measure sustainable performance (SP). SP integrates performance based on social and environmental along with economic dimension. Inclusion of two additional aspects in the measurement and evaluation of SP can be understood by the fact that responsibility of the company is not only to generate economic welfare but people and environment both are equally important (Fauzi et al., 2010). SP accommodates the interest of various stakeholder groups in the society, along with shareholders (Henriques & Richardson, 201). Similarly, literature has reported that researchers used various methodologies to evaluate SP (Gross, 2015).

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The underlying notions of these concepts are focused on the win-win solutions, where economic benefits are aligned with environmental performance such as reducing resource consumption and waste minimization, and social performance i.e. minimization of negative social impacts or maximization of positive ones (Young & Tilley, 2006). Triple Bottom Line (TBL) Source: Elkington (1994 p, 523)

Theories explaining Green HRM practices and Sustainable performance Natural-resource-based view (NRBV) According to Hart (1995) the natural-resource-based view (NRBV) approach firms must be able to respond to changing environmental imperatives through the development of new resources. Hart (1995, p.98) has argued that one of the most important drivers of new resources and capability development for firms will be the constraints and challenges posed by the natural environment. The NRBV posits that, as firms comprehend the constraints imposed by the natural environment, environmental sustainability became increasingly important for sustaining their resource-based advantage (Walls et al., 2011).

AMO Green HRM practices

Discretionary Behaviour E.g. OCBE

Sustainable Performance

Green Abilities

Green Motivation

Green Opportunities

Green Selection Recruitment, Training and Development

Green Performance management appraisal Green reward systems

Green Employee involvement in developmental plans

AMO Theory (Appelbaum et al., 2000)

Conclusion The concept of sustainability applies to HRM. The traditional HRM assumes that human resources are there to be consumed and exploited rather than developed and maintained. GHRM practices GHRM promises potential benefits for both organizations and employees. For the organization, there is some evidence that better environmental performance is also associated with improved financial performance outcomes the so-called ‘Green pays’ argument (Crotty and Rodgers 2011). Equally, the GHRM practices analyzed here are likely to improve employee wellbeing in the workplace, not least through improving the working environment and satisfying the needs of an increasingly environmentally aware workforce. The discussion conclude based on recent studies that understanding of how GHRM practices enhance employees abilities and motivation to become involved in environmental opportunities & activities lags behind. Organizations are not using the full range of GHRM practices, and this may limit their effectiveness in efforts to improve EM and sustainability performance.