Sustainable Human Resource in Vietnam: Necessity and Research Proposal

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SUSTAINABLE HUMAN RESOURCE IN VIETNAM: NECESSITY AND RESEARCH

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SUSTAINABLE HUMAN RESOURCE IN VIETNAM:

NECESSITY AND RESEARCH PROPOSAL
Tran Huy Phuong

Hanoi School of Business and Management, Vietnam National University Hanoi
ABSTRACT
Human resource has long been recognized as the most important asset of the firms in surviving and can be the
source of sustainable advantage (Hitt, Bierman, Shimizu, & Kochhar, 2001). Strategic human resource
management (SHRM) has been used to engage the employee’s effort towards the attainment of organizational
goals (Combs et al., 2006). However, authors criticize the use of SHRM in that it only focuses on the
organization but not on the well-being of the employees (Kramar, 2014; Ehnert et al., 2016). In response to the
call, a recent approach to HRM, namely sustainable HRM, has emerged, which focuses on a wider range of
outcomes such as human and social outcomes besides financial outcomes. Vietnam provides a useful context
for the study of sustainable HRM for a few reasons. Previous studies pointed out that Vietnam has excess
supply of non-skilled and semi-skilled labor, while there is a continuing shortage of skilled labor (Cox, 2014;
Budwar et al., 2016). With the inevitable arrival of the fourth industrial revolution, these unskilled labors may
face risks of losing jobs, causing social and economic problems. On the other hand, the lack of talents enables
highly qualified employees with numerous opportunities for economic success, which effectively reduces work-
life balance and thus results in health, psychological and social problems. This research aims to review the
current research on sustainable HRM, the HRM situation in Vietnam and propose research agenda for
studying the issue in Vietnam.
Keywords: Sustainable, human resource management, Vietnam.
1. Introduction
HRM plays a critical role in the success or failure of every organization (Bloom et al., 2012). According to
Resource-Based View (Wernerfelt, 1984; Barney, 1986), human resources constitute a source of competitive
advantage because they are a valuable, rare, inimitable and non-substitutable resource. For the last three
decades, strategic HRM have advocated that the implementation of a bundle of HR practices, such as high
performance work system, high involvement work system or best practices could improve organizational
performance (Delery & Shaw, 2001; Huselid, 1995; Becker and Huselid, 1998; Chang, 2015; Cooke et
al.,2016; Van de Voorde et al., 2016; Zhang et al., 2016). Despite evidences of the positive linkage between
strategic HRM and firm financial and market outcomes (Boselie et al., 2005; Combs, et al., 2006; Jiang et al.,
2012; Shin and Konrad, 2017), literature also pointed out that the outcomes only contributed to the wealth of
the organization rather than added value to the employees (Miles and Snow, 1995; Kramar, 2014). Moreover,
there are concerns about the dark side of Strategic HRM such as the shortages of highly skilled and motivated
human resources and the unintended impacts of management practices on employees such as high levels of
stress, work-related illnesses, work-life imbalance or joblessness (Zaugg et al., 2001; Docherty et al., 2002;
Kira, 2003; Mariappanadar, 2003). Therefore, authors questioned the appropriateness of strategic HRM for the
long-term viability and sustainable development of the firms (Wilkinson et al., 2001). This necessitates the
development of HR activities and practices which ensure the sustainable development of the organizations
(Ehnert, 2009; Kramar, 2014). In response to this call, a more recent approach to managing people has emerged
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which acknowledges the impacts of HR practices on both human and financial outcomes. The approach is often
referred to as sustainable HRM (Mariappanadar, 2003), sustainable management of HR (Ehnert, 2009), or
sustainable work systems (Docherty, Forslin, (Rami) Shani, & Kira, 2002). Sustainable human resource
management (HRM), defined as people-management practices that take the development of social,
environmental and human capital into account, has emerged in contrast to strategic HRM, which is mostly
focused on achieving economic goals and maximizing profitability (Ehnert, 2009; Kramar, 2014). In order to
get a thorough understanding of the concept, it is necessary to review the origin and development of sustainable
HRM.
2. Literature review
2.1. The concept of Sustainable HRM
For the last decade, sustainability and sustainable development have become a “buzz word” for the world and
for businesses as well. Companies have found themselves in need of developing more sustainable business
models, in which the HR function has a key role to play (Mazur, 2013). The terms “sustainability” and
“sustainable development” can be tracked back to the definition of The United Nation’s World Commission on
Environment and Development (WCED), also called the “Brundtland Commission”: sustainable development
is a development that meets the needs of the present without compromising the ability of future generations to
meet their own needs (WCED, 1987, p.43). The definition took a broad view of sustainable development which
was global, long term and took into account a variety of stakeholders. The commission has identified three
pillars of sustainable development: economic, social and environmental. Elkington (1997) proposed the “triple
bottom line” which comprises three broad focus of organizational performance financial, environmental and
social. Elkington (1997) also argued that focusing only on financial outcomes is insufficient for organizations’
long-term viability and sustainable development. Instead, he proposed that the ecological and social “bottom
lines” have to be equally considered or “integrated” – at least in the long run. Based on the definition of
sustainability, writers have put forwards a number of sustainable HRM definitions. Mariappanadar (2003)
defined sustainable HM as “the management of human resources to meet the optimal needs of the organization
and the community of the present without compromising the ability to meet the needs of the future
requirements of employees, their families, and the community”. The author looked at the issue of sustainability
by pointing out unsustainable management practices which produce negative externality. Negative externality
was conceptualized as cost that an organization’s practices impose on employees, their families and the
community. Mariappanadar (2003) identified three types of harms that were caused by unsustainable
management practices on employees including psychological, social and health related harm. Overall, this
definition focused more on the problems of sustainability from the employees’ perspective.
Zaugg et al. (2001) put forward the definition of sustainable HRM as “long term socially and economically
efficient recruitment, development, retention and dismissal of employees”. In this view, the focus of sustainable
HRM was not only economical but also social outcomes. However, this definition only limited to practices in
the areas of recruitment and selection, development, deployment, and downsizing of employees and did not
focus on the employees’ family as compared to the previous definition.
Later, Ehnert (2009) redefined Sustainable HRM as “the pattern of planned or emerging human resource
strategies and practices intended to enable a organizational goal achievement while simultaneously reproducing
the human resource base over a long-lasting calendar time and controlling for self-induced side and feedback
effect on the HR systems on the HR base and thus on the company itself”. According to Ehnert, the main
objectives of sustainable HRM are (1) to balance the ambiguities and duality of efficiency and sustainability
over a long-lasting calendar year; (2) to sustain, develop and reproduce an organization’s human and social
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resource base, e.g. help the mutual exchange relationships; and (3) to evaluate and assess negative effects of
HR activities on the HR base and on the sources for HR’ (Ehnert 2006, p. 14). Kramar (2014) believed that this
definition extends the previous definitions which focus primarily on outcomes, by also acknowledging the
processes involved in sustainable HRM.
Karmar (2014) reviewed the development of sustainable HRM body of knowledge and suggested that although
these terms differ in the extent to which they attempt to reconcile the goals of economic competitiveness,
positive human/social outcomes and ecological outcomes, they are all concerned with acknowledging either
explicitly or implicitly human and social outcomes of the organization. They all recognize the impact HR
outcomes have on the survival and success of the organization.
A related concept that has been found regularly in the HRM literature is Green HRM which was proposed by
Renwick et al. (2008). Renwick and colleagues defined Green HRM as “a set of specific HRM practices that
enable and sustain a proactive approach to environmental management and the achievement of high
performance outcomes in relation to environmental sustainability and other types of business objectives”.
According to the definition, GHRM comprises a set of practices that focus mainly on the environmental
sustainability and underestimate the other pillars of sustainability mentioned by previous definitions. Green
HRM is effectively, a concept that is nested within the broad stream of sustainable HRM (Guerci and Carollo,
2016).
To sum up, based on literature on sustainability and HRM, in this project, we define sustainable HRM as
“human resource management strategies and practices intended to enable a organizational to achieve their long-
term multiple goals of quality of work; quality of the organization; and quality of natural and social
environment affected by its operation”.
2.2. Research in Sustainable HRM
Kramar (2014) reviewed the literature on sustainable HRM and found that although the research seemed to
agree that sustainability refers to long-term and durable outcomes, the writers understand sustainability and its
relationship to HRM in different ways. There are scholars who mainly concentrate on aspects of economic and
social sustainability touching key HRM tasks, meaning the sustained future supply with qualified and
motivated people (the economic aspect) and an emphasis on how companies treat their employees (the social
aspect) while leaving out environmental issues (Zaugg, Blom, & Thom, 2001; Ehnert, 2009). Also, other
scholars combine these aspects with a focus on how HRM can contribute to Corporate Sustainability in general,
through the engagement of employees in corporate social responsibility practices, i.e. Green HRM (Renwick et
al., 2008). Kramar (2014), therefore, categorized the literature into three groups in terms of their outcomes.
The first group, referred to as Capability Reproduction emphasizes economic outcomes and the creation of
“sustainable competitive advantage”. This group focuses on the impacts of HRM policies on internal outcomes,
particularly economic Wilkinson et al. 2001; Ehnert 2009; Clarke 2011). Writers in this group identify two
performance outcomes for the organization: economic and social/human. They paid attention to the
improvement of economic outcomes and organizational sustainability in the longer term through HRM
practices which contribute to positive human/social outcomes. A wide variety of HRM practices have been
found to contribute to these positive internal and external outcomes. These include HRM practices such as
collaborative HR development (Browning and Delahaye, 2011), organizational structures which facilitate
employee participation and direct communication with employees (Donnelly and Proctor - Thomson, 2011),
work roles and performance evaluation which focus on building on employee strengths and facilitating
performance (Wells, 2011). Other researchers attempted to develop sustainable work system based on the
identification of negative impacts that management practices may exert on individuals, organizations and the
society (Docherty et al. 2002; Docherty, Kira and Shani 2009; Kira 2002). The main purpose of these
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researches is to build and enhance the human and social capital which can ensure the long-term viability and
development of organizations. The authors recognized the negative impacts of HR developments such as
overwork, temporary employment, unreasonable performance standards and job roles ambiguity on individual
well-being, family and community health and satisfaction. The development of HRM practices that generate
positive human/social outcomes such as work–life balance, organizational financial and market outcomes and
sustainable change processes is the primary concern of the group (Docherty et al. 2002; Ehnert 2006).
However, they are not concerned with ecological outcomes.
The second stream of research on sustainable HRM labeled as “Promoting social and environmental health”
investigates the link between HRM and external outcomes which represent the triple bottom line (economic,
social and environmental outcomes). The fundamental idea of the studies in this group was that they focused on
the way in which social/human outcomes and/or environmental outcomes contribute to economic and financial
outcomes. Therefore, many of these writers regard this as the efficiency-oriented approach to sustainability.
Orlitzky, M., Schmidt, F., and Rynes, S. (2003) carried out a meta-analysis of the impacts of corporate social
responsibility on organizational performance and found that good social/human and ecological/environmental
practices have a positive impact on a business’s financial performance. Similarly, Branco and Rodrigues (2006)
argued that investments in socially responsible activities may have both internal and external benefits. Internal
benefit includes the development of new resources and capabilities which are related namely to know-how and
corporate culture. External benefits consist of improved corporate reputation, better attraction of potential
employees and enhanced motivation, morale, commitment and loyalty of the current employees. Other writers
(Mariappanadar 2003, 2012) focused on the impact of HRM on externalities, particularly social and human
externalities. These outcomes include family and community well-being, employee health, government policy
and expenditure. According to Kramar (2014), writers in this stream raised the importance of HRM policies on
outcomes other than social/human outcomes. In most cases, these are ecological outcomes. Most writers,
however, fail to adequately address the influence of broader macroeconomic factors and they view non-
financial outcomes as mediating factors for financial outcomes.
The third group of studies, referred to as “Connections” examines the interrelationships between management
practices, including HRM and organizational outcomes. These outcomes include both internal and external
outcomes, such as environmental, social and financial outcomes. The central idea of these researches is a moral
concern with organization’s behaving responsibly. Researchers argued that environmental and human/social
outcomes are interrelated and contribute to organizational sustainability. Thus, the development and
implementation of advanced environmental policies and capabilities are dependent on the creation of HRM
policies that create trust between employees, management and the communities in which the organization
operates (Kramar, 2014). Dunphy et al. (2007) proposed six-stage model to represent the phases of human and
ecological/environmental sustainability in order for organization’s to provide positive ecological/environmental
outcomes. These stages are rejection, non responsiveness, compliance, efficiency, strategic proactivity and the
sustaining organization. In the same vein, Green HRM literature also recognizes the relationships between
environmental management and HRM (Jabbour and Santos 2008). The literature aims to incorporate
sustainability issues in to HRM policies and practices (Osland and Osland 2007; Kramar 2012). Writers
stressed the role of HRM on environmental outcomes such as pollution prevention, ecological balance and
diversity (Bunge, Cohen-Rosenthal and Ruiz-Quintanilla 1996; Jackson et al. 2011; Renwick et al. 2010).
Renwick et al. (2011) proposed a wide variety of HRM policies associated with attracting and selecting,
training and development, performance managing, pay and reward systems, employee involvement,
empowerment and engagement. These practices have been found to create cultures, climates and capabilities
required for positive environmental outcomes.
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Overall, the literature on sustainable HRM is not only scarce but also inconclusive. However, one central idea
to all of the literature is a clear focus on the purpose of the HRM practices. In strategic HRM, the focus is on
furthering organizational performance, primarily in terms of economic outcomes. The sustainable HRM
literature highlights other significant aspects of organizational outcomes which challenge the SHRM view of
outcomes. Human outcomes, social outcomes and environmental outcome are the central idea of these
researches. In the current project, we aim to contribute to the third group of studies on sustainable HRM by
providing more insights into the bidirectional relationships between management practices and various
outcomes.
3. HRM in the Vietnamese Context

HRM in Vietnamese context has attracted attention from both domestic and foreign researchers. Most of the
extant research focused on the changes in HRM policies and practice over time and the applications of Western
practices to the context of Vietnam (Budhwar & Debrah, 2009; Cooke, 2018). The main streams of research
were on the impact of firm ownerships on utilization of HRM practices (Kamoche, 2001; Thang & Quang,
2005; Zhu, Collins, Webber, & Benson, 2008), HRM in small and medium-sized enterprises (King-Kauanui,
Ngoc, & Ashley-Cotleur, 2006; Thang & Bryant, 2004), and impacts of HRM practice such as training on firm
performance (Nguyen, Truong, & Buyens, 2011). Overall, previous research suggested that HRM in Vietnam is
still dominated by personnel management, with some diffusion of HRM and there was the emergence of
Strategic HRM (Nguyen et al., 2017). Review of existing literature did not provide a clear sight of many
research efforts in the field of sustainable HRM except the research by Luu (2018) who studied the impact of
Green HRM on preserving culture in tourism industry. Despite the scarcity of research in the field, literature
did provide evidences for the need of a more long-term approach to HRM.
Montague (2013) investigated the situation of human resource in Vietnam and identified skill shortages in the
labor as a significant challenge for the Vietnamese businesses and policy makers. He proposed that added to the
skill shortage is the lack of management knowledge practices. Many managers in Vietnam are broadly unaware
of contemporary global “best practices” in management within most industry sectors (Nguyen and Robinson,
2010). Montague (2013) suggested that investment in human resource development and increasing qualification
levels is crucial for Vietnam to sustain and improve individual employment, health and well- being,
productivity, and global competitiveness. He proposed that solution should include substantial revisions to the
national education and training systems in consultation with numerous associated stakeholders. Another
solution involves government and industry to bring together education experts in apprenticeship training and
other areas of technical/vocational education and training (TVET) on a regular basis to enable people to qualify
for the relevants jobs. Furthermore, it is also vital to train and develop skills in order to close any identified
gaps, resulting in a nationally recognized vocational qualification.
Nguyen et al. (2017) also indicated the weaknesses of Vietnam’s education system in improving the quality of
human resources that is considered as the country’s strength in global competition. They suggested that future
studies should make an effort to examine the integration of the strategy of creating a competent workforce and
the development of skill-delivered curriculums in education and tertiary institutions. Moreover, scholars could
examine the role of political systems in crafting the policies necessary for skill development and formation in
universities and colleges. Future studies also could investigate the roles and interrelations of all agencies, such
as the Ministry of Education and Training, educational institutions, and enterprises in Vietnam involved in
training and skill formation within the country’s workforce.
Budwar et al. (2016) studied HRM practice in Asia-Pacific economies and identified work-life balance as a
major concern. He argued that because in rapidly growing economies, talented employees are always in
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demand, they are generally presented with increased opportunities to earn more, which brings with it the
danger of going overboard and ignoring family and social life in the pursuit of economic success. The area of
work-life balance is then rapidly becoming a major challenge for the HR function in the Asia-Pacific context
where emerging evidence is highlighting lots of health, psychological and social problems being experienced
by staff. Budwar et al. (2006) also pointed out the role of national culture on the aggravation of the issue by
citing the existence of high power distance culture in the Asia-Pacific societies where subordinates struggle to
say ‘no’ to the increased work demands pushed on them by their superiors, resulting in a serious work-life
imbalance.
Nguyen, Teo and Ho (2017) suggested that Vietnam has high power distance that is reflected in management
structures and interrelationships within organizations. Employees in Vietnam tend to accept overqualified tasks
or those that fall outside their job descriptions and perceive superiors’ abuse of power and unfair treatment as
legitimately. Nguyen et al (2017) also stated that the culture of respect for seniority leads to centralized
decision making and practices that focus on control and a lack of authority delegation. Overall, these cultural
factors reflected in management practices may create negative behaviors and undesirable outcomes in terms of
psychological health and safety because employees have deference for power and authority distribution and
acceptance of unfair treatment.
Luu (2018) acknowledged the need for green behaviors among employees in the tourism industry. He found
that Green HRM practices such as training; empowerment and rewarding for pro-environmental behaviors
positively influence employees’ green recovery performance. Luu (2018) provided practical implication for the
application of Green HRM and its relationships with sustainable development of the tourism industry. He also
called for more research attempts on Green HRM in other sectors in the services industry as well as in other
industries such as manufacturing.
Overall, the current situation of HRM in Vietnam signifies the need for long-term sustainable HRM practices.
There are at least three reasons for developing a sustainable work system in Vietnamese firms. First, literature
in Vietnam indicated that there is a serious lack of skilled workers and qualified managers, while at the same
time there is generous supply of unskilled workers. The situation may lead to the problems of unemployment,
low wage, poor working conditions, and ignored benefits for unskilled workers. At the same time, it may cause
overwork, stress, and work-life imbalance for skilled employees. Second, the studies in Vietnam recognized
that the causes for the above problems need long-term, systematic solutions which involve various stakeholders
such as the government, educational institution and the firms. These call for a broader view of stakeholder
interests in management practice including HRM. Third, the impacts of industry on the environment have been
acknowledged in previous research. Authors have called for more research attempts in Green HRM and its
relationship with sustainable development.
4. Research Proposal
4.1. Research aims
Our above comprehensive and up-to-date review demonstrated, that for the context of Vietnam the following
issues are relatively under-researched and require more investigattion:
i. The attitude of managers, employees, governmental agencies, university and educational institutes attitudes
towards sustainable HRM. An applicable model for sustainable HRM in Vietnamese context. The content and
latent structure of sustainable HRM practices in Vietnamese context;
ii. The antecedents of sustainable HRM implementation in Vietnamese firms. The influence of contextual
characteristics such as ownership, industry, firm size and firm age on sustainable HRM adoption.
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iii. The impact of sustainable HRM strategies and practices on individual, corporate and social and ecological
outcomes. The moderating impacts of industry-university linkage on the relationships.
4.2. Originality, relevance and scientific significance
Firstly, this project would be one of the first few researches on the issue of sustainable HRM in Vietnam.
Previous literature suggested that HRM in Vietnam is under-developed with the mixture of personnel
management, traditional HRM and strategic HRM. The implementation of modern HRM practices in
Vietnamese firms is still limited. Strategic HRM has been the focus of researchers for the last few decades; on
the other hand, sustainable HRM is an emerging theme of research. Thus, our study will bring an important
contribution to the existing knowledge of sustainable HRM in a developing country. In this project, we expect
to propose a workable conceptual framework to understand the concept of sustainable HRM in Vietnam.
Moreover, most current HRM practices in Vietnamese context focused mainly on firm’s economic
performance, this research explores the influence of HRM on multiple outcomes such as economic, social and
ecological outcomes. This research is, therefore, a multi-level analysis of HRM in Vietnam.
Secondly, most of the extant research on HRM in Vietnam was exploratory, which used case study method and
tended to be qualitative. The current study will provide a more thorough investigation into a new approach to
HRM by incorporating exploratory, descriptive and explanatory research using a qualitative-quantitative
design. Qualitative data from in-depth interviews and group discussions will shed light into the issue and used
to develop instruments for subsequent survey. Quantitative data from questionnaire survey will be used to test
the relationships between sustainable HRM practices and multiple outcomes.
Thirdly, while previous HRM research in Vietnam was able to point out the challenges faced by the industries
and the government, no practical direction have been proposed. In this research, we seek a feasible solution for
the challenges by combining different points of view from business management, employees, educational
institutions and governmental agencies.
Fourthly, the application of HRM practice in Vietnamese firms were diverse, however, reasons for these
diversity have not been clearly defined. In this research we expect to apply different theories (social exchange
theory, the resource-based view, and institutional theory) to better explain the causes and the effects of HRM
adoptions in Vietnamese firms. Thus, our study will fill the lack of strong theoretical-driven studies of HRM in
Vietnam, and contributes to the test and development of existing theories of sustainable HRM that are mainly
grounded from the context of developed countries.
Practically, our study is also timely and has important implications because of the serious problems identified
in the development of human resource in Vietnamese firms. The problems of skill shortage, oversupply of
unskilled labor and the ineffectiveness of the educational systems require a new approach to HRM which
requires the integration and collaboration of multiple stakeholders.
4.3. Research method
We will use both qualitative and quantitative methods for data collection and analyses. For data collection, we
have one pilot survey using in-depth interview and group discussion methods, one pilot quantitative survey
using the forms of questionnaires for exploratory factor analysis of the sustainable HRM construct and a main
quantitative survey to test the hypotheses. Regarding the pilot survey, we will select a sample of 10 firms
including those of different ownerships and operating in different sectors. In-depth interview will be carried out
with the top management or managers in charge of human resource. Besides, 10 group discussions with
employees in these firms will also be conducted. For government agencies we plan to survey with 10
delegations from provincial employment promotion centers. For university and educational institutes, we
interview with top management at 5 institutes of each types. Convenience sampling techniques will be used to
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select target firms. Findings will be used for the first paper and information will be used to develop instrument
for the quantitative survey.
The pilot quantitative survey using the instruments developed from the results of qualitative interviews will
feature the list of sustainable HRM practices. Questionnaire will be delivered to a sample of 200 companies in
Hanoi, Ho Chi Minh city and Da Nang where gathers large numbers of firms. Questionnaires will be sent by
email attentively to HR managers or top management. We will ask the respondent about their opinions on the
necessity of each practice in their organization. Telephone and email reminder will be used to ensure response
rate.
The main survey will be conducted after the pilot quantitative survey. Target respondents will also be top
management or the person in charge of HR in the firms selected. The sample size will be determined later based
on the actual population of firms in chosen areas of Hanoi, Ho Chi Minh city and Da Nang (tentatively, 500).
The data collection will be undertaken by using direct interview (interviewer-administered) to ensure data
reliability and response rate.
We will use different descriptive and inferential statistic techniques including exploratory factor analysis
(EFA), confirmatory factor analysis (CFA), path analysis using structural equation modeling (SEM) to analyze
the relationships between the constructs with the support of statistical software such as Stata, SPSS and AMOS
or SmartPLS.
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