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Green HRM Competitive Service Sector PDF
Green HRM Competitive Service Sector PDF
Mathew Mampra
mampra@yahoo.com
Alliance University, Bangalore
Purpose –To analyse green HRM practices and its role in creating and sustaining an organizational culture
conductive towards developing a competitive service sector.
Methodology – This paper is based on a systematic literature review and compilations of findings and lessons
learned from the author’s own experiences. The paper also draws on examples from forward looking
companies.
Approach – Green HRM is the use of HRM policies to encourage the sustainable use of resources within
business enterprises, promote the cause of environmentalism and in the process, create improved employee
morale and satisfaction. The topic of green HRM is attracting increased attention among management scholars
and entrepreneurs especially related to service sector to use as a tool for their competitive advantage. The
importance and relevance of this green HRM initiative as an aiding tool to maximise the profit are explored.
Practical implications and Learning Objective – The paper has implications for understanding the role of
green HRM in nurturing a favourable organisational culture to create a competitive environment. This paper is
expected to assist business leaders to consciously create a green culture which makes the service sector more
competitive.
Originality/value –The importance of managing the services in competitive environment by creating a green
organisational culture is under-researched. How it is to be nurtured and supported within service
organisations? Often the service organization itself discourages, or at least makes it extremely difficult, for the
business leaders to take risks in order to explore new green HRM initiatives.
1. Introduction
Green HRM is the use of HRM policies to encourage the sustainable use of resources within business
enterprises, promote the cause of environmentalism and in the process, create improved employee morale and
satisfaction. Green human resources also refer to using every employee touch point/interface to promote
sustainable practices and increase employee awareness and commitments on the issues of sustainability.
It involves undertaking environment-friendly HR initiatives resulting in greater efficiencies, lower costs and
better employee engagement and retention which in turn, help organizations to reduce employee carbon
footprints by the likes of electronic filing, car-sharing, job-sharing, teleconferencingand virtual interviews,
recycling, telecommuting, online training, energy-efficient office spaces etc. Positive result of the green HRM
policy is “better employee morale.” Increased employee loyalty, productivity, recruitment and retention also
made the list of most-cited benefits apart from long term profit maximisation.
Whether you’re doing it to improve your bottom line, strengthen your brand, being competitive or out of a
sense of social responsibility, there are many good reasons for organisations to” go green” in their HRM policies
due to its long term gains. This aspect cannot be overlooked as it involves the most vital part of your
organisation-your employees especially in service sector. This is a matter of making them feel that they are
making a difference at their jobs by helping the organisation to be competitive in the market place, while
looking satisfied to the principles of their employer.Green HRM practices to be employed from beginning at the
point of an employee’s organizational entry and continuing until the point of the employee’s exit.
Human capital and the systems surrounding it are the true cornerstones of building a sustainable business in
service sector. Sure, you can argue that businesses are sustainable because of their operations and culture, but
it's the employees who craft and execute those eco-policies and create that green corporate culture. Without
developing personnel and implementing sustainable strategies, it's rather difficult to go green successfully.
That's why green human resource (HR) practices are a key component of sustainable business development in
the service sector.
2. Research Methodology
This paper adopts a literature review approach beginning with indicating significant works on Green HRM
research, integrating environmental management and HRM and classifying the literature systematically.
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Literature review is adopted as it enables to structure research and to build a reliable knowledge base in this
field.
The following HR processes namely recruitment; performance management and appraisal; training and
development; employment relations; compensation and rewards are covered . The concept of green work life
balance, green HRM behaviours and green signatures are also covered for better understanding of green
organisational culture and the financial benefits of going green on a long term for service sector. Secondly the
paper draws on examples which forward looking companies use.This paper can find compilations of findings
and lessons learned from my own experience as an owner-manager for an SME for more than two decades. In
short the methodology adopted is a symphony of literature review, case study and experience sharing approach.
3. Literature Review
In recent years, a number of scholars have contributed to the understanding of GreenHRM (e.g. Berrone&
Gomez-Mejia, 2009; Brio, Fernandez, &Junquera, 2007; Fernandez,Junquera, &Ordiz, 2003; Govindarajulu&
Daily, 2004; Jabbour& Santos,2008; Jabbour, Santos, & Nagano, 2010; Madsen &Ulhoi, 2001; Massoud, Daily,
&Bishop, 2008; Ramus, 2001, 2002; Renwick, 2008; Stringer, 2009; Wehrmeyer, 1996).Distinguished policies
in the field of recruitment, performance and appraisal management, training and personnel development,
employee relations and reward systems are considered powerful tools for aligning employees with a company’s
environmental strategy (Renwick, 2008). Therefore Green HRM can decisively contribute to successful
environmental management.
One of the main functions of green HRM is to educate the staff on what is done, how it works and how we’re
helping the environment. That really develops a sense of pride because, protecting the environment and cutting
costs are great reasons for companies to go in the direction towards green HRM. However, one question often
comes up is why the full potential of green HRM is not been realised. Let us examine this in detail.
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Treating employees fairly translates into better financial performance (Orlitzky, Schmidt &Rynes, 2003). For
example, companies in the “100 Best Companies” had significantly higher financial performance compared with
industry competitors, and their employees had more positive attitudes toward work. Positive employee relations
are an intangible and enduring asset and a source of sustained competitive advantage (Fulmer, Gerhard & Scott,
2003).
A socially responsible HRM focuses on the practical aspects of how to implement ethics, equity, ecology, and
social responsibility into business relationships.
Applicant perceptions of corporate social responsibility can affect attracting the right people to critical jobs.
Kingfisher Airlines has and Union Carbide had a negative reputation for social responsibility. A focused
campaign highlighting Tata’s socially responsible behaviour helped them getting the best talents. Programs that
highlight a firm’s affirmative action, diversity and environmental policies can also be used to help attract
desirable recruits.
Green HRM can meet its full potential only by considering employees in their two fold role as producers and
consumers. Employees learn different kinds of behaviour not exclusively at the workplace, but also in private
life. Since reciprocal interactions between working life and private life occur, a “green work-life balance
concept” is suggested to facilitate environmentally friendly behaviour in both life domains. Here the decisions
by the HR managers which can be called “green decisions” are playing a very important role.
Consumption is understood as the process of selection, purchase, usage and disposal of products (e.g.
Blackwell, Miniard, & Engel, 2006). Since it is the very nature of consumption to use resources, all
consumption behaviour is likewise environmentally relevant behaviour (e.g. Hansen & Schrader, 1997). If
environmentally relevant behaviour is practiced in working life and private life, it is likely that employees’
environmental attitudes and activities are generated from experiences in both life spheres.
The impact of Green HRM on “greening employees” will always be influenced by employees’ personal
environmental experiences. As a result, Green HRM might fail in realizing its full potential if they focus merely
on employees in their working role.
On one side, many research has been conducted into the interface of working life and private life (Edwards
&Rothbard, 2000). On the other hand, the implementation and prevalence of work-life balance policies in
companies have considerably increased (Kossek& Lambert, 2005). Therefore, for a successful implementation
of green HRM policies, linkages between working life and private life is an unavoidable ingredient. Green
work-life balance policies to aim at decreasing imbalances in environmentally friendly behaviour by promoting
positive influences both from work-to life and from life-to-work. On the one hand, a company can promote
environment friendly consumer behaviour in the private life of employees, which can be called work-to-life
interventions.On the other hand, companies can encourage employees to use environmentally relevant ideas and
experiences they have developed in their private life within their working life which can be called as life-to-
work interventions.
However, until recently, few organisations have made a concerted effort to leverage its environmental stance
as a critical point in recruiting pitches. Firms like Google and even old-school General Electric have led the way
by undertaking major efforts to make being environmentally friendly a critical element of their employment
brand. Google leads the way not just in its environmental practices but also in publicizing their environmental
record and approach. Like many emerging green companies, Google has hired a director who coordinates
corporate environmental efforts in an attempt to match their corporate business strategy with their
environmental efforts.
$5,000 subsidies for employees buying hybrid cars (Timberland offers $3,000)
Company dining facilities that serve organic sustainable foods
Charitable contributions to organizations that fight global warming
On-site farmers markets
On-site composting of food waste
Use of green fuels and solar power
Fully subsidized employee bus pools for commuting employees
Gen Y demands it. This generation has learned about the importance of the environment and recycling
in classes since elementary school. They filter both product purchasing and job selection choices with
their green mindset.
Educated class demands it
Many job candidates care about it. Although no one has yet quantified the impact that being
environmentally friendly has on recruits, if you ask candidates whether working for an environmentally
friendly company is important to them, a vast majority will respond with an affirmative.
Global candidates can be passionate about it. Some countries around the world are extremely
passionate about the environment like Germany, Australia, Finland etc. As a result, if you expect to
recruit the best from around the world, you must be prepared to meet a growing set of eco-expectations
as an employer.
Green recruiting is a chance to differentiate yourself in a recruiting marketplace where standing out
from the crowd is already extremely difficult. Incidentally, not only does green recruiting improve your
chances of attracting and selling candidates, it’s also your chance as a recruiter to do your part to
improve the environment by showing senior management the dollar impact it has on recruiting,
retention, and product sales.
B. Performance Measurement:For current employees, the presence of rigorous metrics for assessing
environmentalperformance signals that environmental rhetoric is likely to be backed up with
meaningfulaction. In addition to meeting the criteria of reliability, validity, and fairness, effective
performance appraisals provide useful feedback to employees and support continuous improvements in
the firm’s environmental outcome
C. Training, Development, and Learning: When managers determine that organizational change is
necessary to facilitate green HRM, training activities are often among the first area for HRM
involvement. A survey of managers’ beliefs about management best practices that result in employees
becoming engaged in eco-initiatives revealed that environmental training and education and
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establishing a culture in which employees feel they are accountable for environmental outcomes
werethe most salient HRM practices for achieving environmental goals (Ramus, 2002).
Organizations should develop a cadre of managers and executives capable of leading sustainability
initiatives and learning throughout the process. The development of skills such as system thinking and
negotiation may take years of experience working within a broad ecosystem of stakeholders (e.g., see
Worley, Feyerherm, & Knudsen, 2010)
D. Compensation and Rewards: Monetary and nonmonetary rewards are another potentially powerful
tool for supporting green HRM activities. Nevertheless, developing effective monetary incentives can
be challenging due to the difficulty of accurately and fairly evaluating environmental behaviours and
performance (Fernandez, Junquera, &Ordiz, 2003). In addition, organizations must strive to find the
right balance between the use of motivational “carrots” and “sticks.”
Among the many HR practices available, incentives and rewards are often presumedto be the most
powerful means for connecting organizational interests to employees’interests.
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Commute time for 100 workers equals 23,333 hours per year, with a time value of $700,000 per year
(US Department of Transportation).
Telecommuting saves an average of 52 minutes of commuting per day as well as an $840 gas
expenditure per year (Department of Transportation).
33% of workers select employers offering flexible schedules over those who do not offer
telecommuting (Robert Half International Survey).
Telecommuting increases productivity by 31% based on fewer disruptions, less stress, and reduced
commuting time (British Telecom Internal Survey).
Office space can cost $6,000 per worker per year, based on square foot costs across US office space
used per worker. Telecommuting can cut real estate costs by 25% to 90% (PC World).
Avaya then initiated a plan to hire teleworkers globally, while avoiding business disruption. As a result:
Carbon emissions were reduced by over 8,000 tons per year through reduction of employee travel by
over 15 million miles annually.
Over 2,200 employees are full-time teleworkers.
75% of Avaya’s employee base telework at least part of the week.
Teleworkers collaborate as effectively from a remote work site as they do when in the office.
Avaya experienced zero down time during Hurricane Charley
Improved employee retention translates in to low replacement costs : Many green companies these days
boast low turnover rates compared to their non-sustainable counterparts. That's not just talk. In a green
workplace survey conducted by the Society for Human Resource Management (SHRM), 61 percent of
respondents who worked for an environmentally conscientious company said they were "likely" or "very likely"
to stay at the business because of those practices
higher profits than comparable low-wage companies in their industries. When workers are encouraged to
participate in decision making, training, profit sharing, and stock ownership they are more productive which
offsets higher costs for salaries and benefits (O’Toole & Lawler, 2006),making the organisation competitive in
the market place.
Positive financial outcomes are more likely to be experienced in firms that effectively align their HRM
systems to support their environmental initiatives. Gradually, leading firms around the world are beginning to
shift from reliance on processes that exploit the environment toward those that are environmentally sustainable
(Schot& Fischer, 1993; Winn, 1995). Better environmental performance can lead to an increase in revenues
through three channels: (a) better access to certain markets; (b) differentiating products; and (c) selling pollution
control technology.
Second, better environmental performance can lead to reductions in cost in four categories: (a) risk
management and relations with external stakeholders; (b) cost of material, energy, and services; (c) cost of
capital; and (d)cost of labour.
Socially responsible and sustainable service sector organisations who employs green HRM practices reap
benefits by attracting and retaining good employees.Improved employee retention translates in to low
replacement costs. Many green companies these days boast low employee turnover rates compared to their non-
sustainable counterparts. They have advantages since they take a longer term view that includes employee
stakeholders and make financial gains in the process. This is all the more important in an economy in which
resources are depleted, operations are globalized, and where the right people make the difference between
success and failure on a long term basis in a competitive marketplace in service sector-to survive, to sustain and
to flourish.
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