GREEN HUMAN RESOURCE MANAGEMENT PRACTICES AND ORGANIZATIONAL SUSTAINABILITY: A PATHWAY TO ENVIRONMENTAL AND FINANCIAL PERFORMANCE

Abstract

Sustainability is a global concern, and it forces organizations to align business strategies with environment and financial goals. Green Human Resource Management (GHRM) has emerged as an essential approach that does not ignore the impact of practices on the environment in HR activities such as recruitment, training, appraisal and remuneration. Despite its growing relevance, empirical studies about the twofold impact of GHRM on both environmental and financial performance have not been done, particularly in emerging economies. This gap is addressed in this study by examining how the practices of GHRM influence the sustainability of organizations in a Pakistani context where environmental performance is theorized to mediate the relationship. The quantitative, cross-sectional design was used in this study to sample 300 employees and HR managers (in manufacturing and service companies in Lahore, Karachi and Islamabad). The data collected was analyzed using SPSS and SEM and structured questionnaire was used. The results affirm the argument that GHRM practices significantly affect the performance of the business regarding environmental and financial performance. Further, the relationship between GHRM and financial performance is mediated by environmental performance and significance of sustainable practices in improving profitability. The findings contribute to the body of knowledge by including the Resource-Based View, Stakeholder Theory and Triple Bottom Line therapies and by stating practical implications to organizations on how competitive advantage is achieved through the application of sustainability-based HR practices.