The current issue and full text archive of this journal is available at

www.emeraldinsight.com/1757-4323.htm

Cost measures of
A conceptual framework harm of HRM
for cost measures of harm practices
of HRM practices
103
Sugumar Mariappanadar
School of Business (Melbourne), Australian Catholic University,
Melbourne, Australia

Abstract
Purpose – The purpose of this paper is to propose a costs framework for harm of human resource
management (HRM) practices to develop the cost measures for the psychological, social and
work-related health aspects of harm of HRM practices on stakeholders (employees, their family and
communities) so as to understand the implications of harm on the stakeholders.
Design/methodology/approach – Initially, the cost components of health care are used to
theoretically develop a costs framework for harm of HRM practices to measure cost for each of the
psychological and the social aspects of harm of HRM practices. Subsequently, employee relative
deprivation, spill over and crossover effects of work on family are the theories used to develop the cost
measure for the psychological and the social harm of HRM practices. Finally, the direct costs
associated with the psychological and the social harm of HRM practices on stakeholders are valuated
using published research.
Findings – The proposed costs framework of harm of HRM practices is a useful theoretical
framework to identify, measure and valuate the cost of psychological and social harm of HRM
practices on the stakeholders.
Practical implications – The costs component framework of harm of HRM practices can facilitate
the capture of the associated costs of the harm of HRM practices so as to understand organisations’
ethics of care for stakeholders.
Originality/value – The theoretical costs framework for harm of HRM practices provides a new
technique to measure the cost of psychological and social harm of certain HRM practices imposed on
the stakeholders so as to minimise the harm in the future.
Keywords Harm of HRM practices, Social costs of HRM practices, Psychological harm of HRM practices,
Sustainable HRM, Social issues in management, Human resource management, Costs
Paper type Conceptual paper

Introduction
There are many studies in the literature which suggest that the harm of human resources
management (HRM) practices on employees triggers employee turnover and reduced
productivity, which costs the organization (Goetzel et al., 2003; Dewa et al., 2004).
However, there is very limited research in the literature exploring harm and the costs of
such harm or negative externality (NE) of HRM practices imposed by organizations on
the stakeholders (employees, their families and communities) as third parties.
Mariappanadar (2012c) defined NE of HRM practices as an organization’s failure to
assimilate the social cost of their business and HRM practices imposed on stakeholders, Asia-Pacific Journal of Business
Administration
Vol. 5 No. 2, 2013
The author thanks the two anonymous reviewers and the Editor of APJBA for their comments to pp. 103-114
q Emerald Group Publishing Limited
improve the quality of this article. The author also extends his appreciation to Nancy Reid for her 1757-4323
useful suggestions on the earlier version of this article. DOI 10.1108/17574321311321595
APJBA such as employees, their family members and communities. There is growing interest
5,2 among practitioners and researchers (Mariappanadar, 2003; Ehnert, 2009; Wehling et al.,
2009; Pfeffer, 2010; Wagner, 2012) in understanding the harm of HRM practices and
sustainable HRM practices to counter the harm. Sustainable HRM practices are those
practices that both enhance profit maximization for the organization and also reduce the
harm on employees, their families and communities (Mariappanadar, 2003; Ehnert, 2006;
104 Wagner, 2012). Therefore, this article aims to theoretically develop cost measures to
capture the harmful aspects of HRM practices to analyze the aggregate costs of harm
imposed by organizations on the stakeholders.
The aim of the article is achieved by initially exploring the theoretical basis for
developing a framework to appraise the costs of harm using the costs components for
health care effectiveness by Smith and Brown (2000). This can help to capture the
aggregate costs of harm of HRM practices. An understanding of the aggregate costs of
harm of HRM practices can help managers be aware of the practices that highlight the
need for ethics of care for stakeholders (Kramar, 2006; Mariappanadar, 2012a; Ehnert
and Harry, 2012). Also, the proposed framework can also facilitate the promotion of
sustainable HRM practices as corporate social responsibility initiatives to minimize the
psychological, social and work-related health aspects of harm imposed by HRM
practices on the stakeholders.

Background
Externality
Economists have defined externality in many ways and by many names (Papandreou,
1994). Papandreou has provided a standard definition of externality, “as being present
when the actions of one agent directly affect the environment of another agent, i.e. the
effect is not transmitted through prices” (p. 5). That is, externality is something that,
while it does not monetarily affect the company that produces goods, does harm the
living standard of society as a whole. The rationale for discussing externality is because
organizations that use certain management practices to internalize all their actions with
respect to maximizing employee productivity disregard the impact it has on the
wellbeing of employees, their families, and the community. In this research, NE is the
cost of harm of HRM practices imposed on or transferred by organisations to third
parties or stakeholders (employees, their families and the community) to pay for
managing the harm (Mariappanadar, 2012a; Ehnert and Harry, 2012).

Sustainability and HRM practice

A high-performing employee is identified at a subsequent point in time as “dead wood”
by an organisation due to his/her inability to cope with the increased workload and
begins showing work-related health issues or inefficiency caused by conflict in family
relationships. The organisation may consider dismissing that employee to reduce
payroll costs, ignoring the fact that an organisational driver such as increased workload
has negatively impacted on the employee’s performance (Mariappanadar, 2003; Ehnert,
2012). Hence, it is critical for managers and researchers in HRM to understand that
overworking of such valued employees based on the strategic HRM approach for the
company’s internal referenced efficiency or profit maximization at the cost of employees’
and their family’s wellbeing is an unsustainable HRM practice. These unsustainable
practices may lead to voluntary employee turnover or redundancy (Ehnert, 2009).
 Kramar and Steane (2012) attempted to recast the role of HRM in organizational Cost measures of
success from a financial to a more sustainable focus. They suggested that sustainability of harm of HRM
HRM is a concept that “includes values, governance, transparency, ethics, diversity, social
responsibility, employee and human rights, supporting the community and protecting the practices
environment” (p. 146). This definition of sustainability is different to traditional
approaches to sustainability in HRM, which connects sustainability to human resource
service delivery within an organization. Furthermore, Kramar and Steane’s study of the 105
role of HRM functions in an Australian business context revealed that line managers in
Australia have very few expectations about the sustainability role of HRM departments.
HRM departments instead increasingly focus on the responsibilities of developing human
capital as a strategic imperative of business (Bourdreau and Ramstad, 2005), as well as the
traditional operational executor/functional expert roles.
The sustainable leadership pyramid framework proposed by Avery and Bergsteiner
(2011) for examining an organization’s current sustainable practices depicts a system in
which the 23 elements or practices mutually influence each other in different directions
to shape sustainable organisational practices. Trust is one such element of the
higher-level practices, which is expected to shape sustainable practices to enhance the
caring for people. Absence of trust jeopardizes ethics and a stakeholder approach for
organisational sustainability. Therefore, from a macro level, sustainable leadership
could shape sustainable practices at different management functional levels (e.g. HRM,
environmental responsibilities, etc.).

Harm of HRM practices

The harm of organizational practices is understood based on the model of harm of HRM
practices proposed by Mariappanadar (2012b), which was used to evaluate the harm of
downsizing on survivors and retrenched employees. The attributes of harm and the
harm indicators are the two components of the model that are used in this article. The
attributes of harm of HRM practices are the characteristics of harm of practices that
negatively impact on the stakeholders (employees, their families and the community).
The attributes of harm of HRM practices are: level of harm; manifestation of harm;
impact of harm; and avoidability of harm of HRM practices on the stakeholders.
The level of harm of HRM practices is about an employee’s evaluation of how high or
low the level of harm is on himself/herself, their family or the community. The
dimensions of the manifestation of harm, instantaneous and time-lagged, are based on a
time perspective. The dimension of the instantaneous harm refers to the manifestation of
harm on employees and the community within six months after the introduction of the
HRM practices. The long-term time frame of one to two years is used to understand the
time-lagged manifestation of harm after the introduction of the HRM practices in an
organisation. The impact of harm attribute can either be temporary or enduring. The
temporary harm dimension of the impact attribute of harm of HRM on employees and
the community is that which may result in no permanent harm or harm with minimal
severity. The enduring harm dimension, however, has a relatively permanent impact
that causes great discomfort, damage, or distress to employees, their families, and the
community. The avoidability attribute aims to identify the external environmental
factors as the cause of harm of HRM practices. An avoidability attribute attempts to
identify whether the harm of HRM practices is due to avoidable or unavoidable external
environmental conditions.
APJBA The harm indicators (Mariappanadar, 2012c; Ehnert and Harry, 2012) are those data or
information that raises the awareness of managers and researchers about the consequence
5,2 of the attributes of harm of HRM practices on the stakeholders. The harm indicators are
grouped into three domains to represent the manifestation of harm within the
psychological and the social aspects of employees’ work life, and the work-related health
aspect of harm on employees and their families. For example, harm associated with
106 cognitive work stress, such as problems with clear thinking and decision making, are
clustered in the psychological aspects of harm indicators. The harm indicators like family
breakdown/divorce and child neglect are grouped in the social aspect of harm indicators.
In summary, the purpose of using the model of harm of HRM practices
(Mariappanadar, 2012b) is to evaluate the NE of HRM practices on the stakeholders.
This could highlight the need for stronger moral responsibility on the part of
organizations to take care of their employees, family members of employees and the
community as stakeholders. Clark et al. (1998) have clearly indicated that the voice of
those at the receiving end of an organisation’s profit maximization focused management
practices has tended to be under-represented in the HRM literature.

Theoretical basis of costs framework for harm of HRM practices

The cost components for health care effectiveness by Smith and Brown (2000) are used
to develop a costs framework for harm of HRM practices (Figure 1) to valuate cost
for each of the psychological and the social aspects of harm of HRM practices.

Valuate the costs of

harm
• Direct costs or
market price
• Indirect costs

Stage 3

Identification and
allocation of costs to
appropriate levels
• Employee level
• Family level
• Community level

Stage 2

Cost measure for harm

of HRM practices
• Psychological
harm
• Social and work
related health harm
Figure 1.
The costs framework for Stage 1
harm of HRM practices
The framework proposes three stages to valuate the cost of harm of HRM. They are: Cost measures of
cost measures for the harm, identification and allocation of the cost of harm, and harm of HRM
valuation of cost of harm, and they are discussed in this section to explain how they are
used to appraise the costs of harm of HRM practices. practices
In stage 1 of the framework (Figure 1), the measurement of costs for natural or health
outcomes suggested by Smith and Brown (2000) is based on improvements of some
status of physical, social or emotional functioning. However, in this article, to measure 107
the costs of harm, I have chosen to use welfare “loss” instead of welfare “improvement”
of some status of physical, social and emotional functioning by employees and their
family members. Welfare loss is a situation where marginal social benefit is not equal to
marginal social cost and society does not achieve maximum utility (Khanna, 2000).
Welfare loss in the HRM context is about an employee being restricted by the harmful
aspects of HRM practices and does not allow for maximizing of the utility function of
paid work for improving individual psychological, social and health wellbeing
outcomes. The reason for using welfare loss in HRM is because harm of HRM practices is
about the harm it causes on employees and their family members, which impairs their
effective utility function of paid and unpaid work. Hence, it is appropriate to use reduced
future personal outcomes of paid work of some status of functioning due to the aspects of
harm as a measurement of costs of harm.
In stage 2, identification and allocation of cost of harm of the costs framework
(Figure 1) for harm relates to badging the cost of harm of HRM practices to the
organizational, individual or/and societal level. As per the definition of NE of HRM by
Mariappanadar (2012c), provided earlier in this article, NE is the cost the third parties,
such as employees, their families and the community, pay for harm imposed by HRM
practices of organizations. Hence, this component of costs framework provides the
basis to understand who pays for the costs imposed by the harmful aspects of NE
caused by organizational practices. In stage 3, the evaluation of costs stage of the
framework explains local prices for goods or services using market prices, indirect
costs, lost productivity and reviews of policymakers’ overall perceptions of costs.

Cost measures for the harm of HRM practices

The cost measures for harm highlight the welfare loss caused by the harmful aspects
of the attributes of harm of HRM (Mariappanadar, 2012b). As there is limited research on
the cost measures of harm of HRM practices, in this article, cost measures for the
psychological aspect of harm of HRM practices are developed based on reduced future
personal outcomes for employees due to supervisors’ biased evaluation of the causes for
reduced employees’ performances. Further, cost measures for the social aspect of harm
of HRM practices are identified as in accordance with the negative impacts of work on
social wellbeing outcomes for employees and their family members.

Cost measure for the psychological aspect of harm of HRM practices

A cost measure for the psychological aspect of harm is developed using an employee’s
reduced future personal outcomes of paid work or welfare loss due to the psychological
aspect of harm indicators that are caused by the attributes of harm of HRM practices.
That is, a supervisor may introduce work intensification practices to employees under
his/her supervision based on employees’ previous high work performance. However, the
supervisor may perceive that those employees under his/her supervision who exhibit
APJBA the psychological aspect of harm, for example burnout and lack of concentration,
subsequent to the introduction of work intensification practices have limited personal
5,2 capabilities to cope with work intensification. Hence, the supervisor may deprive those
employees of the opportunities for improving their future personal outcomes due to the
supervisor’s biased evaluation of limited personal capability to cope with work
intensification as a cause for reduced employees’ performances. This is explained as a
108 “longitudinal relative deprivation”. The definition of longitudinal relative deprivation is
developed based on individual relative deprivation theory (Crosby, 1976; Pettigrew,
2002), which focuses on the recognition or perception of disadvantages imposed by
supervisors on individual employees. Therefore, in this article the longitudinal relative
deprivation of employees’ career growth opportunities is defined as:
[. . .] supervisors’ disadvantage some employees over a long period of time by depriving
opportunities for challenging job experiences because of the supervisor’s bias to disregard the
psychological harm of HRM practices and attribute employees’ limited personal capabilities
to cope with the harm of HRM practices as a reason for deprived opportunities.
It is important to understand how the attributes of harm of HRM practices trigger the
psychological aspect of harm indicators among employees and eventually lead to
longitudinal relative deprivation by their supervisor. Therefore, initially the link
between the attributes of harm of HRM practices and the psychological harm indicators
is theoretically explored for a few of the attributes of harm. Subsequently, the reduced
personal outcomes or welfare loss for an employee due to the relative longitudinal
deprivation of future opportunities for the employee is discussed to provide the
theoretical basis for the cost measure for the psychological aspect of harm of HRM
practices.
It is extrapolated from the work stress literature that reduced personal outcomes of
employees are caused by the psychological aspect of harm indicators, which are
triggered by different attributes of harm. It is identified that when employees are
confronted with emotional dissonance in their job due to the conflict experienced
between not been able to perform to the best of their capabilities due to the perceived
high level of harm, one of the attributes of harm of HRM practices exists in their job. At
the same time employees might want to avoid punitive action by managers for not
achieving the required performance standard determined by the organisation. This
emotional dissonance caused by internal referenced efficiency as well as the high level
of harm of HRM practices leads to employee burnout.
The time-lagged manifestation as an attribute of harm is understood from the
manifestation of harm on employees over a long-term time frame (e.g. approximately one
or two years) after the introduction of HRM practices. Employees’ problems with thinking
clearly caused by the cognitive work stress may over a period of time start negatively
impacting employees’ decision-making capabilities and their work performance
(Albertsen et al., 2010). Therefore, the time-lagged manifestation of reduced employees’
decision-making capabilities due to the harm of HRM practices (e.g. work intensification)
may impact on work performance and that leads to reduced personal outcomes for
employees such as lack of opportunities for career progression in the organisation.
The psychological aspect of harm indicators of HRM practices such as burnout,
problems with concentration, reduced clear thinking and decision making may be
caused by work stress due to work intensification. These psychological indicators of
harm may affect an employee’s work performance and that leads to reduced personal
outcomes (welfare loss) such as opportunities for career development and progressions, Cost measures of
and performance-based rewards in the organisation (Mariappanadar, 2010). The harm of HRM
reduced personal outcomes for an employee (e.g. reduced future rewards, career growth,
etc.) are the costs which that employee has to incur due to longitudinal relative practices
deprivation caused by the psychological aspect of harm of HRM practices. Cooper and
Kurland (2002) have suggested in their study that professional employees fear that when
they are “not seen” by their supervisors in actions to complete challenging projects, then 109
this will limit their opportunities for reward and promotions. The affected employee
is therefore a passive receiver of the psychological aspect of harm of HRM practices,
and subsequently may be disadvantaged by his/her supervisor with reduced
opportunities for professional development and growth, leading to reduced future
personal outcomes. Is this disadvantage caused by the harm of the psychological aspect
of HRM practices or due to the employee’s inability to perform or the harm of work
practices introduced by the organization? I argue that the affected employee was
disadvantaged for career growth by no fault of his/her individual capabilities to cope
with cognitive work stress but it is an outcome of longitudinal relative deprivation
triggered by harm of HRM practices, which is an organizational factor or driver.
The psychological aspect of harm negatively impacts an employee’s future personal
outcomes due to sustained or longitudinal relative deprivation. The reduced future
personal outcomes or welfare loss in a work context are a measure to calculate the costs
of the psychological aspect of harm of HRM practices to employees.

Cost measures for social aspect of harm of HRM practices

This section explores the theoretical basis for a cost measure for the social aspect of harm
of HRM practices. This cost measure is developed based on the relationship between the
social aspect of harm indicators of HRM practices and reduced work-related health,
emotional and social outcomes for employees and their family members as a set of criteria
for welfare loss. For example, a decrease in quality of interaction with family members as a
harm indicator of the social aspect of harm of HRM practices is due to the spillover effect of
work-family conflict. Therefore, any social issues such as work-related divorce, separation
or child neglect are included in the cost measure for the social aspect of HRM practices.
The social aspect of harm of HRM practices is explained by the spillover effect of
work-to-family influences (Hughes and Parkes, 2007; Mariappanadar, 2012b). That is,
the spillover effect explains how the attributes of harm of work impact the social aspect
of harm on employees. The spillover effect of the social aspect of harm of HRM
practices does not stop with the decreased work-related health wellbeing outcomes on
employees alone, it may also crossover (Sears and Galambos, 1992; Cinamon et al.,
2007) to employees’ social aspect, which includes their family members (e.g. spouse,
child, mother, etc.). The increased work-related health issues for employees due to the
social aspect of harm HRM practices also crosses over and reduces employees’ family
members’ wellbeing outcomes.
It is evident from the literature that work stress has different types of crossover
effect on employees’ family members (Westman and Vinokur, 1998; Eckenrode and
Gore, 1981; Westman et al., 2001). However, there is limited study in the literature to
highlight how the harm of HRM practices have a crossover effect of work to family that
negatively affects employees’ and their family members’ social and work-related health
outcomes. Hence, the crossover effect of the social aspect of harm on the affected
APJBA employees and their family members is considered as another cost measure for the
5,2 social aspect of harm of HRM practices. It is clear that HRM practices used by
organizations to increase employee efficiency may negatively spillover onto the social
outcomes of employees, and also crossover to work-related health aspects of health
outcomes (e.g. work-related depression and psychosomatic disorders) of employees
and their family members.
110 To summarize the cost measures for the psychological and the social aspects of harm of
HRM practices, it is initially explained how lost opportunity for improved future personal
outcomes is considered as a cost measure for the psychological aspect of harm of HRM
practices on employees using career promotion as an example. The longitudinal relative
deprivation is used to explain how the psychological aspect of harm of HRM practices
leads to reduced future personal outcomes through diminished work performance.
Reduced future personal outcomes are the cost measures that could help in determining
the costs of the psychological aspect of harm of HRM practices to employees.
In the cost measure for the psychological aspect of harm section, an argument is put
forward to highlight that employees are disadvantaged for future personal outcomes
due to the harm of HRM practices. Furthermore, it is argued in this section that the
social and work-related health issues for employees and their family members are
caused by the spillover and the crossover effects of harm, and hence welfare loss due to
those issues is used as the cost measure for the social aspect of harm of HRM practices.

Level to which the cost measures for harm of HRM practices is allocated
Once the cost measures for harm of HRM practices are developed, it is important to
understand the level (individual, organizational or society level) to which the costs of
these cost measures are attributed. The level of costs of harm is important because, as
according to the definition of harm or NE of HRM practices, the NE relates to the costs
imposed by HRM practices on the stakeholders or third parties, such as employees, their
family members (individual level) and the community (society level). The third parties
pay the price for reduced future personal outcomes in a work context. Hence, the costs of
the psychological aspect of harm of HRM practices are attributed to the individual level.
The cost measure for the social aspect of harm of HRM practices is the social and
work-related health treatment costs that are attributed to the stakeholders or third
parties, such as employees and their family members (individual level) and
community/government (societal level). The social issues (e.g. work-related divorce,
etc.) within this cost measure are attributed to the individual level of costs because the
affected employees and their family members as the stakeholders pay the costs for
managing the social issues. Furthermore, the work-related health issues within this cost
measure are attributed to the societal or community/government level. The work-related
health treatment costs are attributed to the societal level, because, in Australia as well as
other countries with a universal health care system, the government pays for the health
care costs of the residents. In the next section, the third cost components of health care
cost effectiveness study by Smith and Brown (2000) is used to evaluate the costs of the
psychological and the social aspects of harm of HRM practices.

Valuation of costs of harm of HRM practices

The valuation of costs of harm of HRM practices should be relevant to the measurement of
costs of the psychological and the social aspects of harm of HRM practices to the
stakeholders (employees, their families and the community). Therefore, the market price Cost measures of
or/and indirect cost approaches to the valuation of costs in health care suggested by Smith harm of HRM
and Brown (2000) are used. Market price is about actual or proxy price for lost
opportunities for improved future personal outcomes (e.g. promotion, reward, etc.) due to practices
the psychological aspect of harm of HRM practices for employees. An example of an
employee on an annual salary of $70,000 who has been efficient and effective in achieving
set performance standards before the introduction of increased workload in his/her current 111
position will be used to illustrate this point. This employee’s supervisor decides to increase
the workload to his/her current position because it is commonly assumed in practice by
supervisors that the best performing employees are capable of effectively handling the
increased workload due to the employees’ intrinsic motivation as well as for improved
internal referenced efficiency (i.e. profits) for the organisation. On introduction of work
intensification for this employee, he/she may start exhibiting any of the psychological
harm indicators of HRM practices, such as lack of concentration and problems of clear
thinking and decision making, and his/her work performance starts suffering.
There is evidence in the literature to suggest that employees’ work performance
starts suffering after the introduction of work intensification (Cameron, 1998). The
supervisor for this employee may get frustrated or disappointed with the employee and
develop performance evaluation bias towards the employee. Hence, the supervisor may
relatively deprive or disadvantage the employee’s involvement in any future
challenging projects. This might cost the employee future career promotion, leading
to lost earnings from the position higher than his/her current position as well as welfare
loss of using that additional income in leisure activities to improve his/her wellbeing.
Assuming that the annual salary of $85,000 for the promoted position is higher than the
current one on an annual salary of $70,000, then the employee has lost annually $15,000
in earnings as well as the welfare loss due to the lost additional income. If this relative
deprivation of opportunities for a challenging project by the supervisor continues
beyond a year, then the loss in earnings and equivalent welfare loss to the employee
cumulates to the years of relative deprivation (e.g. $15,000 multiplied by say two years of
relative deprivation is equal to $30,000 loss of earnings or welfare loss for the employee).
Another employee for example may seriously consider changing his/her career due to
burnout, one of the psychological aspects of harm, caused by work intensification in the
current job. Mirvis and Hall (1996) indicated that employees are confronted with the
tension associated with “hanging on” versus “letting go” their current job with less
opportunity to progress due to longitudinal relative deprivation. Mirvis and Hall
suggested that people who restart their career in a new occupation will have less overall
lifetime earnings than they would accrue in the traditional single career path.
Furthermore, in a career change choice early retired executives earn on average less than
85 per cent of their former salary and skilled manufacturing workers earn an even lesser
percentage when they move to the service sector. Apart from this, it is important to take
into account the costs of retraining and redeployment, plus the value of lost earnings.
Direct costs for health care or indirect costs are based on computing the time lost due to
physical, psychological or emotional conditions by employees and their family members
due to the spillover and the crossover effect of the social aspect of harm of HRM practices.
For example, divorce caused by the spillover and crossover effect of social harm of HRM
practices has a direct cost of approximately $30,000 to an individual (employee and his/her
partner each) in the USA (Schramm, 2006). Furthermore, Shaw and Creed (1991) estimated
APJBA that in the UK it costs an equivalent amount of approximately US$3,070 for psychosomatic
5,2 patients referred to psychiatrists for treatment. Furthermore, the neurotic disorder caused
by the spillover and crossover effect of the unavoidable social harm on employees and their
spouses is one of the most expensive treatment costs to the community among mental
health disorders. Goetzel et al. (2003) revealed that in the USA, mental health problems
including neurotic disorder cost an average of $3,703 for treatment.
112 These direct and indirect approaches of valuation of costs to employees and their
family members (individual level) and communities (societal level) due to the measures
of the psychological and the social aspects of harm of HRM practices are considered to
be relevant to the evaluation of the costs of harm of HRM practices.

Conclusion
This article has made an attempt to indicate to HR practitioners and researchers that it is
important to understand that the over-utilization of human resources by using internal
efficiency or profit maximization focused HRM practices is unsustainable. The
unsustainable HRM practices impose various types of harm on the stakeholders
(employees, their families, and communities) for which the stakeholders, as a third party,
pay the price to manage the harm.
The costs component framework for harm of HRM practices suggests a sophisticated
method to valuate the costs of harm to the stakeholders so that the costs could be captured.
Reduced future personal outcomes due to longitudinal relative deprivation of employees
by their supervisor are developed as a cost measure for the psychological aspect of harm
of HRM practices. Subsequently, reduced social outcomes due to spillover and crossover
effects of harm are used as a cost measure for the social aspect of harm of HRM practices.
It is proposed that the costs component framework for harm of HRM practices can
facilitate capturing the associated costs of the negative impact of harm of HRM
practices so as to understand the ethics of care for stakeholders. An awareness of the
level of ethics of care for stakeholders can subsequently encourage managers to
introduce sustainable HRM strategies to both enhance profit maximization for the
organization and also reduce the harm on the stakeholders. Furthermore, the captured
costs of harm can highlight to organisations the “lack of care” for stakeholders, and
this could facilitate both line and HR managers’ better understanding of the role of
sustainability in HRM as suggested by Kramar and Steane (2012). The proposed cost
component framework for harm of HRM practices sets a new agenda for more
empirical and theoretical research to unravel the harm or NE of internal referenced
efficiency based HRM practices.

References
Albertsen, K., Rugulies, R., Garde, A.H. and Burr, H. (2010), “The effect of the work environment
and performance-based self-esteem on cognitive stress symptoms among Anish
knowledge workers”, Scandinavian Journal of Public Health, Vol. 38, pp. 81-89.
Avery, G. and Bergsteiner, H. (2011), “Sustainable leadership practices for enhancing business
resilience and performance”, Strategy & Leadership, Vol. 39 No. 3, pp. 5-15.
Bourdreau, J.W. and Ramstad, P.M. (2005), “Talentship, talent segmentation, and sustainability:
a new HR decision science paradigm for a new strategy definition”, Human Resource
Management, Vol. 44 No. 2, pp. 129-136.
Cameron, A. (1998), “The elasticity of endurance: work intensification and workplace flexibility Cost measures of
in the Queensland public hospital system”, New Zealand Journal of Industrial Relations,
Vol. 23, pp. 133-151. harm of HRM
Cinamon, R.G., Weisel, A. and Tzuk, K. (2007), “Work-family conflict within the family: crossover practices
effects, perceived parent-child interaction quality, parental self-efficacy, and life role
attributions”, Journal of Career Development, Vol. 34, pp. 79-100.
Clark, T., Mabey, C. and Skinner, D. (1998), “Experiencing HRM: the importance of the inside 113
story”, in Mabey, C., Mabey, D. and Clark, T. (Eds), Experiencing Human Resource
Management, Sage, London, pp. 1-13.
Cooper, C.D. and Kurland, N.B. (2002), “Telecommuting, professional isolation, and employee
development in public and private organizations”, Journal of Organizational Behavior,
Vol. 23, pp. 511-532.
Crosby, F. (1976), “A model of egoistical relative deprivation”, Psychological Review, Vol. 83, pp. 85-113.
Dewa, C.S., Lasage, A., Goering, P. and Caveen, M. (2004), “Nature and prevalence of mental
illness in the workplace”, Healthcare Papers, Vol. 5 No. 2, pp. 12-25.
Eckenrode, J. and Gore, S. (1981), “Stressful events and social supports: the significance of
context”, in Gottlieb, B. (Ed.), Social Networks and Social Support, Sage, Beverly Hills, CA.
Ehnert, I. (2006), “Sustainability issues in human resource management: linkages, theoretical
approaches, and outlines for an emerging field”, paper prepared for 21st EIASM SHRM
Workshop, Birmingham, 28-29 March, available at: www.sfb637.uni-bremen.de/pubdb/
repository/SFB637-A2-06-004-IC.pdf (accessed 10 October 2012).
Ehnert, I. (2009), Sustainable Human Resource Management: A Conceptual and Exploratory
Analysis from a Paradox Perspective, Springer, Heidelberg.
Ehnert, I. (2012), “Readings in HRM and sustainability (1st ed.)”, Personnel Review, Vol. 41 No. 6,
pp. 849-852.
Ehnert, I. and Harry, W. (2012), “Recent developments and future prospects on sustainable
human resource management: introduction to the special issue”, Management Revue,
Vol. 23 No. 3, pp. 221-238.
Goetzel, R.Z., Hawkins, K., Ozminkowski, R.J. and Wang, S. (2003), “The health and productivity
cost burden of the ‘top 10’ physical and mental health conditions affecting six large US
employers in 1999”, Journal of Occupational & Environmental Medicine, Vol. 45, pp. 5-14.
Hughes, E.L. and Parkes, K.R. (2007), “Work hours and well-being: the roles of work-time control
and work-family interference”, Work & Stress, Vol. 21, pp. 264-278.
Khanna, N. (2000), “Measuring environmental quality: an index of pollution”, Ecological
Economics, Vol. 35, pp. 191-202.
Kramar, R. (2006), “HRM at the crossroads: editor’s note – recent developments and ethics”,
Asia Pacific Journal of Human Resources, Vol. 44 No. 2, pp. 130-131.
Kramar, R. and Steane, P. (2012), “Emerging HRM skills in Australia”, Asia-Pacific Journal of
Business Administration, Vol. 4 No. 2, pp. 139-157.
Mariappanadar, S. (2003), “Sustainable human resource management: the sustainable and
unsustainable dilemmas of downsizing”, International Journal of Social Economics, Vol. 30,
pp. 906-923.
Mariappanadar, S. (2010), “Sustainable HRM: a perspective to counter the harm of efficiency
focused organisational practices”, Proceedings of the 24th Annual and Australia
New Zealand Academy of Management Conference, Adelaide, Australia, 8-10 December.
Mariappanadar, S. (2012a), “Harm of efficiency oriented HRM practices on stakeholders:
an ethical issue for sustainability”, Society and Business Review, Vol. 7 No. 2, pp. 168-184.
APJBA Mariappanadar, S. (2012b), “Sustainable HRM: a counter to minimize the externality of
downsizing”, in Ehnert, I., Harr, W. and Zink, K.J. (Eds), Handbook of Sustainability and
5,2 Human Resource Management, Springer, Berlin.
Mariappanadar, S. (2012c), “The harm indicators of negative externality of efficiency focused
organisational practices”, International Journal of Social Economics, Vol. 39 No. 3, pp. 209-220.
Mirvis, P.H. and Hall, D.T. (1996), “Psychological success and the boundaryless career”,
114 in Arthur, M.B. and Rousseau, D.M. (Eds), The Boundaryless Career: A New Employment
Principle for a New Organizational Era, Oxford University Press, New York, NY, pp. 237-255.
Papandreou, A.A. (1994), Externality and Institutions, Clarendon Press, Oxford.
Pettigrew, T.F. (2002), “Summing up: relative deprivation as a key social psychological concept”,
in Walker, I. and Smith, H.J. (Eds), Relative Deprivation: Specification, Development, and
Integration, Cambridge University Press, New York, NY, pp. 351-374.
Pfeffer, J. (2010), “Building sustainable organizations: the human factor”, Academy of
Management Perspectives, Vol. 24, pp. 34-45.
Schramm, D.G. (2006), “Individual and social costs of divorce in Utah”, Journal of Family and
Economic Issues, Vol. 27, pp. 133-151.
Sears, H.A. and Galambos, N.L. (1992), “Women’s work conditions and marital adjustment in
two-earner couples: a structural model”, Journal of Marriage and the Family, Vol. 54, pp. 789-797.
Shaw, J. and Creed, F. (1991), “The cost of somatization”, Journal of Psychosomatic Research,
Vol. 35, pp. 307-312.
Smith, A.F. and Brown, C.G. (2000), “Understanding cost effectiveness: a detailed review”,
British Journal of Ophthalmology, Vol. 84, pp. 794-798.
Wagner, M. (2012), “‘Green’ human resource benefits: do they matter as determinants of environmental
management system implementation?”, Journal of Business Ethics (in press).
Wehling, C., Hernandez, A., Osland, J., Osland, A., Deller, J., Tanure, B., Neto, A. and Sairaj, A.
(2009), “An exploratory study of the role of HRM and the transfer of German MNC
sustainability values to Brazil”, European Journal of International Management, Vol. 3
No. 2, pp. 176-198.
Westman, M. and Vinokur, A.D. (1998), “Unraveling the relationship of distress levels within
couples: common stressors, empathic reactions or crossover via social interaction?”,
Human Relations, Vol. 51, pp. 137-156.
Westman, M., Etzion, D. and Danon, E. (2001), “Job insecurity and crossover of burnout in
married couples”, Journal of Organizational Behaviour, Vol. 22, pp. 467-481.

About the author

Dr Sugumar Mariappanadar is a Senior Lecturer in Management/HRM in the School of Business at
Australian Catholic University in Melbourne. His teaching and publications cover sustainable
human resource management, human resource measurement, organizational behaviour, and
culturally indigenous management practices. He has had broad management consulting experience
in Australia and India. His consultancy includes employee turnover study for call centres and
business process analysis and management systems development. He has been involved along with
other IT systems experts in developing eMonstrow, business management (HR) software.
Sugumar Mariappanadar can be contacted at: sugumar.mariappanadar@acu.edu.au

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

Or visit our web site for further details: www.emeraldinsight.com/reprints
Reproduced with permission of the copyright owner. Further reproduction prohibited without
permission.