HRM and Sustainability - Essay Example

HRM AND SUSTAINABILITY “Talent management, leadership, and knowledge sharing are where HRM and sustainability create an integral whole” This report will explain the links between HRM and sustainability, with a brief description of CSR and Global Warming, and provide six recommendations to assist managers in achieving sustainability through HRM November 2011 Table of contents Executive summary – synopsis 3 Introduction 4 Research: sustainability and HRM 4 What is sustainability? 4 How sustainability links to HRM 5 Talentship, management, leadership, and knowledge: toward sustainability through HRM 6 Methodology 7 Discussion 7 Conclusion 8 Recommendations 8 References 9 Questions and answers 11 Executive summary – synopsis Purpose – The purpose of this research report is to explore the links between HRM and sustainability and propose recommendations to let organizations achieve sustainability through HRM. Scope – this report covers a broad range of peer-reviewed journal articles, books, and case studies and is focused on the analysis of three important subtopics: (1) the view of sustainability in organizations; (2) how organizations link HRM and sustainability; and (3) moving beyond traditional HRM toward sustainability, through talentship, leadership, and knowledge management. The research also uses case studies that expose the nature and implications of HRM-sustainability relations Methodology – the report reviews previous studies on the role of sustainability in organizations, the relationship between sustainability and HRM, and the strategies and systems linking HRM to sustainability within organizations. Findings – the relationship between HRM and sustainability is extremely complex. Traditionally, HR contributes to organizations’ performance, by having HR policies aligned with the strategic goals of the organization, legal compliance, better customer satisfaction, and effective service delivery. Sustainability requires that HRM moves beyond the boundaries of traditional HR policies, toward leadership development, talent management, and knowledge management. These are the main aspects of HRM to drive future sustainability among organizations. Recommendations – this report suggests that organizations must focus on six basic areas: leadership development, management of employee capabilities, communications and relationships, HR-strategy fit, knowledge sharing, and talent management. These are the areas that, on the one hand, will allow for a stronger link between HRM and sustainability and, on the other hand, drive sustainability across organizations. Introduction The term sustainability is widely used in almost all sciences (Ehnert 2009). The notion of sustainability has already become a synonym of profitability and long-term development in organizations (Ehnert 2009). Apart from the fact that different organizations define the concept of sustainability in entirely different ways, the link between HRM and sustainability remains poorly understood. The body of research on Human Resource Management and its relation to sustainability is very scarce (Wehling et al. 2009). As such it is high time to re-evaluate the topic of the HRM-sustainability relationship in more detail. The purpose of this research report is to explore the links between HRM and sustainability and propose recommendations to let organizations achieve sustainability through HRM. The significance of sustainability initiatives in organizations cannot be overstated. The main benefits of achieving sustainability in organizations include cost reduction through efficient resource allocation and use; the development of a strong and sustained competitive advantage; the creation of unique, inimitable environmental strategies; contribution to public relations through the development of a social corporate image; and positive impacts on the environment and separate ecosystems (Wehling et al. 2009). With this in mind, organizations must realize what it takes to become sustainable and how practical HR policies, instruments, and approaches can move organizations toward sustainability and, consequentially, improve their bottom line. Research: Sustainability and HRM Sustainability is a buzzword in contemporary research and practice. The term ‘sustainability’ is widely used in almost all sciences (Ehnert 2009). Ehnert (2009) writes that the multitude of meanings incorporated in the sustainability concept makes it difficult to apply the concept in practice. Boudreau and Ramstad (2005) suggest that sustainability is an emerging concept, but it already includes governance and values, ethics and transparency, as well as the goals of social responsibility, diversity, employee and human rights, environmental protection, and community development. The threat of global warming increases organizations’ fight for limited resources (Wehling et al. 2009). For this reason, organizations develop corporate social policies to meet the challenge of environmental protection and use community development and sustainability as the drivers of strategic and profitability growth. Ehnert (2009) writes that the term ‘sustainability’ originates from the Latin word ‘sus-tenere’, which literally means “to maintain” or “to strengthen”; this being said, sustainability can be defined as “the ability to develop, strengthen, and maintain from within” (Ehnert 2009, p.35). The body of literature on sustainability and its implications for organizational development and growth constantly expands. Researchers are becoming more interested in the relationship between sustainability and HRM. Again, as organizations interpret sustainability in different ways, the way they link sustainability ton HRM also varies. More often than not, the HRM-sustainability link operates through Corporate Social Responsibility (Wehling et al. 2009). However, researchers also mention other ways to connect sustainability to HRM. Boudreau and Ramstad (2005) claim that, traditionally, the contribution of HRM to organizational performance was defined by the ability of the organization to achieve its financial goals. The traditional HR paradigm emphasized legal and regulatory compliance, HR process efficiency, client satisfaction with the quality of HR practices, effectiveness of HR strategies in enhancing employee talents and skills, and was measured through the changes in ROI (Return on Investment) (Boudreau & Ramstad 2005). Traditional models of service delivery were a typical way to connect sustainability to HRM (Boudreau & Ramstad 2005). Simultaneously, organizations used and continue using various approaches to HRM, depending on how they view sustainability. Boudreau (2003) developed a system of four main HRM-sustainability models. The first model covers organizations with the traditional view of HRM; these organizations focus on financial goals and measure their achievements by the quality of their financial results (Boudreau 2003). The second model implies that organizations are at the initial stage of recognizing sustainability: here, HRM policies and approaches meet the basic standards of quality, corporate social responsibility, equity, and fairness (Boudreau 2003). The third model is rare but becoming more popular across organizations; here, organizations shift to adopt new decision-making paradigms for the sake of better talent management and knowledge sharing (Boudreau 2003). Boudreau (2003) uses the example of Shell, to show how large organizations define the logical connections between their financial goals, the resources affecting these goals, and the talent pool responsible for and required to implement these goals. The fourth model is the ultimate point and the desired goal for those organizations which strive for sustainability: here, organizations shift their HR and talent paradigms to turn their talent management models into an organizational prize (Boudreau 2003). As organizations are moving closer to sustainability awareness, how to implement sustainability initiatives through HRM remains the major question. Gloet (2006) asserts that “at present it is not well understood how sustainability knowledge can be effectively brought together, managed and shared for effective decision-making in a sustainability context” (p.403). Simultaneously, organizations cannot simply ignore the meaning of sustainability, since the emerging challenge of financial, social, and environmental issues changes the structure and efficiency of business operations (Bansal 2002; Hart & Milstein 2003; Sharma 2005; Taylor, Egri & Osland 2010). Different researchers propose different solutions to the HRM-sustainability problem. Boudreau (2003) and Boudreau and Ramstad (2005) focus on the importance of talent management for achieving a strategic HRM-sustainability fit. The example of Aquablock shows how training works for the benefit of sustainability in organizations, by letting employees understand what role they play in the environment and environmental protection (NSW Government 2011). Wehling et al. (2009) explored the process of values transfer from German organizations to Brazilian business contexts and developed a detailed list of the major HRM activities in sustainability management; these include but are not limited to clarifying corporate motivation for sustainability involvement; facilitating the choice of conceptual models that guide sustainability development; determining the lines of responsibility within the sustainability movement; organizing training sessions and selecting employees who share the organization’s sustainability values, etc. Gloet (2005) proposes crossing the boundaries of traditional HRM and focusing on knowledge management as the way to achieve sustainability in organizations. Methodology For the purpose of this research report, a total of 11 sources of information were used. Peer-reviewed journal articles, one book and one case study were used to develop recommendations and implications for sustainability in business. The main limitation of the literature review method is that the use of secondary findings does not allow addressing other researchers’ prejudice and bias. However, the use of more than one source of information allows developing recommendations to link sustainability to HRM. Discussion The current state of literature suggests that sustainability is becoming a popular topic of organization studies. Sustainability is turning into the source of competitive advantage, and many organizations look for the ways and methods to turn sustainability into tangible profits. Despite certain limitations, it is clear that talent management is the dominant trend in the HRM-sustainability research. Many researchers believe in the importance of finding and selecting employees who are committed to sustainability goals (Boudreau 2003; Boudreau & Ramstad 2005; Wehling et al. 2009). Knowledge management and leadership exemplify two important paradigms that link HRM to sustainability and facilitate sustainable development in organizations (Gloet 2005). Simultaneously, how to link sustainability to knowledge management remains unclear (Gloet 2005). Meanings of sustainability vary across organizations (Ehnert 2009). Therefore, future researchers must focus on the development of relevant sustainability frameworks to be applied in more than one organization. Conclusion The term sustainability is widely used in almost all sciences. Organizations develop corporate social policies to meet the challenge of environmental protection and use community development and sustainability as the drivers of strategic and profitability growth. Different researchers propose different solutions to the HRM-sustainability problem. Talent management, knowledge management, and leadership development were found to be the main strategies to link sustainability to HRM, and vice versa. Unfortunately, organizations hold different perceptions of sustainability and not all of them can successfully move beyond traditional HR paradigms. Future researchers must focus on the development of relevant sustainability frameworks to be applied in more than one organization. Recommendations To ensure that HRM works for the benefit and facilitates sustainability organizations should: Invest resources in leadership develop and growth (Gloet 2005); Manage and expand employee capabilities (Gloet 2005); Develop effective communications and relationships between employees and between them and their leaders; Ensure a strategy-HRM fit; Encourage critical inquiry; Fine-tune organizational policies and systems, to encourage and reward knowledge generation and sharedness. References Bansal, P 2002, ‘The corporate challenge of sustainable development’, Academy of Management Executive, vol.16, no.2, pp.122-131. Boudreau, JW 2003, ‘Sustainability and the talentship paradigm: Strategic human resource management beyond the bottom line’, Working Paper 03-21. Boudreau, JW & Ramstad, PM 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.293-310. Ehnert, I 2006, ‘Sustainability issues in human resource management: Linkages, theoretical approaches, and outlines for an emerging field’, Paper prepared for the 21st EIASM SHRM Workshop, Birmingham, 28-29 March. Ehnert, I 2009, Sustainable human resource management: A conceptual and exploratory analysis from a paradox, Springer. Gloet, M 2005, ‘Knowledge management and the links to HRM: Developing leadership and management capabilities to support sustainability’, Management Research News, vol.29, no.7, pp.402-413. Hart, S &Milstein, M 2003, ‘Creating sustainable value’, Academy of Management Executive, vol.172, no.2, pp.56-69. NSW Government 2011, Case study: Dawning of a plum idea, NSW Business Guide. Sharma, S & Henriques, I 2005, ‘Stakeholder influences on sustainability practices in the Canadian forest products industry’, Strategic Management Journal, vol.26, no.2, pp.159-180. Taylor, S, Egri, C & Osland, J 2010, ‘HRM’s role in sustainability: Systems, strategies & practices’, Human Resource Management, vol.49, no.1, pp.1-2. Wehling, C, Hernandez, AG, Osland, J, Osland, A, Deller, J, Tanure, B, Neto, AC & 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. Questions and answers 1. How did sustainability for Aquablock begin? 2. How did Aquablock take its people to move on to an environmental edge? 3. How exactly did training help the company to achieve sustainability? 4. What types of training programs are available to employees? 5. What are the benefits and risks of HRM-sustainability relationships? 1. Seven years ago Aquablock managers noticed that the shortage of water in plumbing services was under way. 2. Through training the company moved its people onto the environmental edge. 3. Training allowed reducing energy and water use at Aquablock: training programs help employees to understand their role in public health and environmental protection. 4. Green plumbing practices for plumbers and the Environmental solutions course; plus the GreenPlumber training course and in-house training. 5. If not for HRM and sustainability, the company would have missed huge business opportunities. However, at times of economic downturns, Green specifications may come under threat. Read More