Introduction into

Sustainability and HRM

Agenda of todays discussion
Introduction .
◦ 1.1 Limitations of the Traditional Market Model
◦ 1.2 Importance of Sustainability for HRM

2 Sustainability and Sustainable Development: An Overview

◦ 2.1 Historical Roots of Sustainability and Its Dimensions
◦ 2.2 Defining Sustainability for the Business Context .

3 Sustainability and HRM

◦ 3.1 Key Concepts and Levels of Analysis
◦ 3.2 Key Research Areas on Sustainability and HRM

4 The Research Agenda on Sustainability and HRM

◦ 4.1 Objectives and Scope of this Volume
◦ 4.2 Content and Outline of this Volume
Introduction
Limitations of the Traditional Market Model
Slowly but gradually, the view is gaining wider acceptance that an overly strong
focus on a rather short-termed efficient and effective exploitation of natural,
social and human resources in organizations – as suggested by the tradition
model – is not enough to ensure organizational viability in the long run:
◦ A big part of the problem lies with companies themselves, which remain trapped in an
◦ outdated approach to value creation that has emerged over the past few decades. They
◦ continue to view value creation narrowly, optimizing short-term financial performance
◦ [. . .] while [. . .] ignoring the broader influences that determine their longer-term success.
Introduction
Limitations of the Traditional Market Model
Sustaining the human resource base becomes a strategic management task
(Ehnert 2009a). Not sustaining the human and overall corporate resource base is
problematic for individual companies in at least one of the following three
cases:
when corporate choices guided by the traditional market model affect
1. The willingness of institutions or individuals to provide critical resources to the organization,
and/or
2. The ability of institutions or individuals to provide critical resources to the organization, and
3. When side effects and feedback effects (‘externalities’) from business activities affect the
resources, i.e. their quality or ability to regenerate themselves or the origin of these resources.
 Introduction
Limitations of the Traditional Market Model

In other words, organizations face three kinds of problems – often simultaneously:

• Problems of maintaining social legitimacy (or the ‘license to operate’),

• Problems of controlling the externalities on resources and organizational
environments created also by organizations themselves and
• Problems of sustaining long-term supply of resources.
Introduction:
Importance of Sustainability for HRM:
Many enterprises communicate the importance of sustainability for HRM as way to reach one or several of the
following objectives:

1. Attracting and retaining talent and being recognized as an ‘employer of choice’,

2. Maintaining employee health and safety.
3. Investing into the skills of the workforce on a long-term basis by developing critical competencies and
lifelong learning.
4. Supporting employees’ work-life-balance and work-family-balance.
5. Managing aging workforces,
6. Creating employee trust, employer trustworthiness and sustained employment relationships.
7. Exhibiting and fostering (corporate) social responsibility towards employees and the communities in which
they are operating.
8. Maintaining a high quality of life for employees and communities.
 Sustainability and Sustainable
Development: An Overview
▪Historical Roots of Sustainability and Its Dimensions:
⮚ Sustainability
refers to the ideas of ‘reproduction’ and ‘self-sustainment’ in order to
ensure a system’s long-term viability or survival.
⮚The etymological origin of the term ‘sustainability’ is the Latin word ‘sus-tenere’ (to
sustain) with the suffix ‘able’ refers to an ability In this sense, sustainable
development can be interpreted as the ability of a society,
⮚An organization or an individual to maintain, strengthen and to develop itself (its
resources, capital etc.)
 Sustainability and Sustainable
Development: An Overview
▪Historical Roots of Sustainability and Its Dimensions:
⮚Although Aristotle did not explicitly use the term sustainability, he has
already used these ideas to develop his concept of a ‘household’ (Greek
okoi or oikos)..
⮚His oikos was characterized by the ability to (re-)produce what was
needed for a living and in this sense was at least to some extent self-
sustaining
 Sustainability and Sustainable
Development: An Overview
▪Historical Roots of Sustainability and Its Dimensions:
⮚while in Japan forests were protected from the sixteenth century
onwards.
⮚In these industries, sustainability was applied as an economic principle
in the first place because the resources
⮚(e.g. wood as a source of energy while a supply of fish provides
sustenance) were vital for doing business on a long-term basis.
 Sustainability and Sustainable
Development: An Overview
Economically Rational Interpretations of Sustainability:
The traditional economic rationale is to use corporate resources efficiently and effectively
and to maximize shareholder value within the legal framework.
In this case, the rational economic choices of business organizations do not include
considerations beyond individual, profit maximizing behavior – no matter what the
ecological or societal costs or downsides.
But, as Hardin (1968) has already emphasized in his ‘Tragedy of the Commons’, individual
rationality can lead to collective irrationality and this also seems to be the case with
individual economic actors only following the traditional economic rationality of efficiency
and effectiveness in terms of finance and profit.
What is individually rational from an efficiency-oriented perspective can become collectively
irrational from a sustainability perspective.
 Sustainability and Sustainable
Development: An Overview
One of the key arguments in the ‘business case’ discussion for sustainability is
that sustainable business behavior can either help
⮚To reduce costs (by reducing the consumption of resources such as energy or
by reducing waste)
⮚ To reduce risks of losing social legitimacy (by internalizing costs from the
impact on natural and societal environments)
⮚To create value (by greening the product/service and thereby attract
consumers willing to pay higher prices or by addressing needs such as those ‘at
the bottom of the pyramid’ which had not been addressed before).
 Sustainability and Sustainable
Development: An Overview
Relationship of Sustainability Rationales and Dimensions:
1. This first assumption about the sustainability dimensions is often illustrated by three
overlapping circles (the three ‘pillars’) which implicitly indicate that win-win-win-
situations between the three pillars can be created. This assumption seems to be
widely accepted in business practice and Research Agenda on sustainability of HRM
academia as long as it is formulated at an abstract level.
2. Accordingly, the second view on the relationship of the sustainability dimensions is
based on the assumption that economic sustainability is the most important
dimension and that ecological or social sustainability are only important as long as
they contribute to an increase in economic success.
Sustainability and Sustainable
Development: An Overview
Relationship of Sustainability Rationales and Dimensions:
A third view on the relationship between sustainability dimensions
has argued that the ecological dimension is in fact the limiting pillar
and therefore needs to be imagined as a ‘circle’ and that the societal
and economic ‘circles’ need to be placed into the ecological circle.
This figure with three circles, one in the center of the other, clearly
emphasizes that – at a global level – we all depend on the functioning
of the natural eco-systems that surround us.
Sustainability and HRM
Key Concepts and Levels of Analysis:
⮚ Defining Human Resources, Human Factors, HRM and Work Systems:
The terms used to describe people in organizations are usually linked to certain
disciplines and basic assumptions. The terms ‘human resources’ and ‘Human
Resource Management (HRM)’ are used in the HRM field.
The objective of this field is to describe, explore and design the value of HRM
systems for achieving organizational goals and to provide suggestions about how to
treat individuals, groups or mangers in order to ensure their ability and willingness
to contribute to organizational goals efficiently and effectively over the long term.
Sustainability and HRM
The term ‘human factors’ which stems from the discipline of ergonomics (or human factors) and
can be defined as “the scientific discipline concerned with the understanding of interactions
among humans and other elements of a system, and the profession that applies theory,
principles, data and methods to design in order to optimize human well-being and overall
system performance”
Ergonomics or human factors as an inter- and multidisciplinary science accepts the uniqueness
of man which excludes using people “only” as a production factor, but includes that work (also)
leads to economic results. Though, there exists a different normative basis between ergonomics
and the traditional approaches to HRM, some developments in recent years (like the
demographic challenge i.e. more people with greater expectations of material consumption)
show a need for (a further) collaboration or even integration of both fields. The work in this
volume on sustainability and human resources can serve as an example for the increasing need
to step beyond disciplinary boundaries.
Sustainability and HRM
⮚Sustainable HRM as an Umbrella Concept and Levels of Analysis:
As described in the section on sustainability definitions, not only do multiple definitions exist of
sustainability but, depending on the kind of definition, overlaps also exist with concepts such as
social responsibility.
For the practitioner as well as for some academics it might not be easy to identify immediately
the key messages in this diversity of interpretations
Sustainability and HRM
3.2: Key Research Areas on Sustainability and HRM:
⮚Early work on sustainability and human resources covered thoughts on how to link the
sustainability idea to HR issues from Mariappanadar (2003) on Sustainable HR strategy, and from
Zaugg and colleagues (2001) and Mu¨ller-Christ and Remer (1999) on Sustainable HRM.
⮚Docherty and colleagues (2002, 2009) and Kira (2003) have approached work-related side and
feedback effects such as health problems from a Sustainable Work Systems perspective and
explore how to design work systems in order to develop and regenerate employees instead of
‘consuming’ and exploiting them.
⮚The key contribution of this work is to show the relevance of corporate sustainability issues for
HRM and to reflect on the idea of using sustainability as a concept for HRM itself. Following
these early contributions, in particular two streams of work began to emerge (see also Ehnert
and Harry 2012).
Sustainability and HRM
3.2.1: Research on the Role of HRM in Developing Sustainable Organizations:
From an instrumental view, ecological and social sustainability include the belief or intention
that organizations reduce the impact of their activities on their natural and social environments
because it might prevent them from doing business in the long run or because unsustainable
behavior poses certain risks to the viability of their business model.
association to corporate sustainability literature, the authors assert that sustainability sheds new
light on understanding organizational success by going beyond the traditional focus on financial
results.
Finally, Mariappanadar (2003) developed a Sustainable HR strategy which he defines as “the
management of human resources to meet the optimal needs of the company and community of
the present without compromising the ability to meet the needs of the future” (p. 910).
 Sustainability and HRM
3.2.2: Research on the Role of HRM in Developing Sustainable HRM Systems:
Wilkinson et al. (2001) have raised several questions for research on sustainability and Human Resource
Management which are still of relevance today and which have also inspired the work in this book:
1. How do organizations currently utilize and apply human resources?
2. How do organizations deteriorate or renew these resources and what are the implications of such
approaches for their employers and their employees?
3. How can we redefine the ways organizations use their human resources in order to ensure human
sustainability?
4. To what extent do corporations need to exercise social responsibility as well as economic
responsibility?
5. How can employers balance the interests of different stakeholders in organizations while maintaining
a sustainable work environment for employees?
 Sustainability and HRM
4. The Research Agenda on Sustainability and HRM:
Challenges for managing human resources sustainably become apparent as soon as the measures
proposed require a paradigm shift and as soon as they contradict the traditional economic market model
I. First, the challenge of designing organization structures, work systems and HRM systems in a way
that allows control of the impact of work on employees and to maintain and develop the
qualifications, skills, personalities and internal resources of people working for an organization –
directly or indirectly via supply chains.
II. The second challenge for enterprises engaging in sustainability is to maintain not only the social
legitimacy, accountability and trustworthiness of the organization in order to maintain its license to
operate.
III. The third challenge of managing human resources sustainably is to be able to do this across
organizational and national boundaries and to balance global vs. local sustainable HR practices and
strategies
Research Agenda on sustainability of HRM
These key challenges are addressed in this volume and we have chosen an interdisciplinary
approach to advance our research agenda. We are convinced that implementing sustainable HR
practices in organizations and HRM is necessary to advance a sustainable development in
organizations and societies.
4.1. Objectives and Scope of this Volume:
Our perspective is based on an integrative perspective of sustainability and HRM because the
aim and scope of this book is to deal with the key questions raised:
“How can HRM contribute to the sustainability of business organizations (external role of
Sustainable HRM)?”
“How can HRM systems themselves become sustainable (internal role of Sustainable HRM)?”
“How can Sustainable HRM be interpreted in different cultural contexts?”
Research Agenda on sustainability of
HRM
The research and thinking presented in this volume provides latest
insights in ‘the state of the art’ on sustainability and human resource
management and on how to manage the human resource base
sustainably.

However, we would also like to point out that the efforts made in this
book are only first steps to bring research and practice together from
diverse backgrounds and to crystallize attempts towards a rich
research agenda for an emerging field of Sustainable HRM.
Conclusion:
The focus of all three definitions is to make HRM systems themselves
sustainable.
For this volume, we open up the discussion on sustainability and
HRM and refer to Sustainable HRM as a new approach to the
employment relationship considering corporate and societal goals of
ecological, social, human and economic sustainability.
To conclude, we understand Sustainable HRM as a design option for
the employment relationship and as a contribution to sustainable
corporate development.