A Human Growth Perspective on Sustainable HRM Practices, Worker Well-Being and Organizational Performance

Abstract

Care services pose new challenges and opportunities for the implementation of sustainable HRM practices related to worker involvement and well-being because of their relational nature. The article is framed in terms of the job demands and resources model and discusses the impact of sustainable HRM (SHRM) practices on organizational performance in terms of service quality and organizational innovation in social and care services. A possible mediating role of immaterial satisfaction between SHRM and performance is also considered. We use national survey data including 4134 workers in 310 matched nonprofit social enterprises in Italy. The results show that HRM practices linked to task autonomy, teamwork, and involvement positively influence immaterial satisfaction, while at the same time immaterial satisfaction and HRM features related to involvement and workload support performance. The mediating role of immaterial satisfaction is not confirmed, but its effect adds positively to involvement in improving performance. This work contributes to the literature on organizational performance and HRM sustainability, which are particularly important in the face of ongoing social change and organizational innovation in social and relational service delivery.

1. Introduction

Sustainable human resource management (SHRM) combines the joint pursuit of economic, financial and social elements in the design of HRM practices to achieve long-term sustainability in the use of human resources [1,2,3]. Dual or triple bottom lines were introduced to show how different goals need not be mutually exclusive but need coordination and ordering of objectives that can be achieved simultaneously. In the multilevel perspective advocated by Docherty et al. [4] and endorsed in this paper, sustainability at the system level (organizational or societal) can balance the needs and goals of individuals and stakeholders. For example, in the job demands and resources model, burnout due to organizational demands can be offset by regenerative processes and the deployment of organizational resources [5,6,7]. For Ehnert [8], sustainability corresponds to a model of human resource utilization that promotes regeneration and positive performance [9]. Organizational resources that support professional growth, participation, and psychological well-being can offset the strain associated with workload and support organizational resilience [10,11].

In the context of sustainability studies, Kramar [12] defines sustainable HRM practices as “the pattern of planned or emerging HRM strategies and practices designed to enable the achievement of financial, social, and ecological goals while simultaneously reproducing human resource fundamentals over the long term” (p. 1084). SHRM emphasizes the importance of human and social outcomes in addition to economic and financial ones, with the goal of preserving and improving human resources. Effects on a variety of stakeholders are recognized, and attention is paid to the processes associated with implementing HRM policies and reconciling conflicting organizational needs. SHRM can take an explicit moral stance on the desired organizational outcomes, especially in the long term, and relates to sustainable labor relations, employee well-being (particularly satisfaction and engagement), and quality of life [13,14,15,16]. Employers drive corporate sustainability when HRM achieves regulatory relevance and supports talent attraction, employee participation, and work motivation [17]. Consequently, organizations must develop HRM practices that lead to higher levels of immaterial job satisfaction, but at the same time also ensure a balance between economic, social and environmental goals. The same literature points out that “policies associated with attraction and selection, training and development, performance management, compensation and reward systems, and especially employee engagement, empowerment, and commitment have been found to create cultures, climates, and capabilities necessary for positive environmental outcomes” [12] (p. 1079). Sustainability lies in the ability of HRM practices to support creative intelligence and well-being, thereby renewing motivational capital and promoting performance without the need for high-intensity financial incentives. The triangulation between SHRM, job satisfaction and organizational performance depends on and is reflected in human growth as an exquisitely qualitative feature of individual psychology in a social (organizational) context.

Research on the relationship between SHRM practices and organizational performance is extensive and well established. In general, HRM practices have been instrumental in improving employee skills, commitment, and effort, with the aim of improving organizational performance [18]. Complementary, research has also addressed the impact of HRM practices on satisfaction [19], while in other works, satisfaction has been considered as a factor influencing performance directly and as a mediator [11,20,21]. One consequential development in this literature is the study of the interrelationships between HRM practices, employee well-being, and performance in organizations that have a social aim (nonprofit and social enterprises) [22].

In this article, we analyze the sustainability of HR utilization and organizational performance in social enterprises (SEs) in Italy. According to the definition of Law 381/1991, social cooperatives (SCs) are multi-stakeholder nonprofit SEs, in that they can accommodate different groups of patrons and stakeholders (e.g., paid workers, volunteers, clients, beneficiaries, associations, etc.) in their membership and governance bodies in the pursuit of social aims [23,24,25,26]. The organizational characteristics of SEs contribute to social sustainability from a multi-stakeholder perspective, as they are able to increase social value for customers and beneficiaries, such as providing some services for free or below cost, and to generate employment opportunities and a fair organizational environment for workers [27].

We use data from the 2007 SISC survey (Survey of Italian Social Cooperatives) that includes information on 4134 workers matched to 320 Italian SCs. The study is carried out in the context of the job demands and resources model [5,6,7]. Sustainability in the implementation of HRM practices stems from the balance between the demands coming from the organization (workload) and the resources it contributes in terms of autonomy, teamwork, and involvement [5,6,7]. Furthermore, the achievement of social goals and missions requires the constant preservation of human and motivational capital, particularly intrinsic and social motivation [11,22]. A multilevel SEM model is developed that tests the mediating role of immaterial satisfaction between SHRM practices and performance, separating the impacts of HRM practices on employee well-being at the individual and organizational levels from the effects of satisfaction and HRM on performance at the organizational level.

The results show that HRM practices influence immaterial satisfaction, which, in turn, is able to influence performance significantly. The mediating effect of satisfaction is positive but not statistically significant for individual practices. However, it adds to the direct positive effect of worker involvement in producing a strong impetus on performance. The impact of selected practices is not uniform, as only worker involvement and workload pressure, and not task autonomy and collaborative teamwork, show a significant impact on performance. Our contribution to the extant literature is twofold. First, by confirming the crucial role of worker involvement in improving service quality and innovation even with the use of a multilevel methodology, involvement-based management practices that increase satisfaction and stimulate commitment are justified. Better engagement, in turn, induces workers to accept stricter demands from the organization. Second, our results were tested on a sample of SCs, whose values are strongly aligned with social sustainability goals and provide the context for expanding fields of research due to the relational nature of the services provided, which are difficult to standardize and monitor, while the use of high-powered monetary incentives can be ineffective [28,29,30]. Given these characteristics, inclusion-based HRM practices can contribute to achieving social innovation and better service quality [31,32].

The remainder of the paper is structured as follows. Section 2 reviews the existing literature on SHRM practices, job satisfaction, and organizational performance, presenting the different hypotheses. Section 3 presents the data, variables and descriptive statistics, and statistical techniques used to test the hypotheses. Section 4 discusses the theoretical and managerial implications of the results. Section 5 is the conclusion.

2. Theoretical Framework and Hypotheses

A company’s attractiveness as an employer can be related to the sustainability of its HR practices and their level of job satisfaction, as SHRM helps companies attract talented employees, retain them, and invest in their skills over the long term [18]. As a precursor to the literature on SHRM and its impact on employee behavior, let us consider some contributions of Dewey [33,34] who established that human satisfaction is achieved when individuals can express creativity and critical thinking. These aspects converge in his notion of “creative intelligence,” which is the ability of individuals to challenge existing beliefs and habits of thought by evaluating and shaping action [35]. In the context of organizations, the use of creative intelligence (CI) takes the form of meaningful interaction between the individual and the organizational environment as the individual strives to realize particular aspirations [36]. The exercise of CI is a potential that, as argued by Dewey and consistent with the later work of Amabile [37], can be developed by HRM practices. In this sense, HRM can be interpreted as an organizational domain in which workers can apply CI to achieve motivational resilience and immaterial satisfaction, thereby affecting business performance [11,38].

Against this theoretical background, several contributions test the link between HRM practices and performance [39]. The results, however, are not always unambiguous [40], leaving a question as to what conditions make certain organizational characteristics (dis)effective [21]. While empowerment and high-performance work systems (HPWSs) are understood as organizational processes that can positively impact both well-being and performance, other studies highlighted the stress-generating potential of HPWSs. The Job Demands and Resources Model (JD-R model; [5,6,7]) was developed to allow the positive and potentially negative effects of HPWSs to be separated and compared. High work demands induce stress and health impairment (health impairment process), while high work resources lead to increased well-being and productivity (motivational process; [7,41,42,43,44]). The immaterial elements of well-being can be related to CI and are higher: (a) when the organizational context fosters inclusion as a way to promote sense making, critical inquiry, deliberation, learning, and compatibility between individual and organizational goals; (b) when individuals have or can develop the skills that enable them to engage meaningfully in both autonomous and collaborative work. This positive association will be even stronger in the context of SHRM, where organizations emphasize the value of individuals [45].

Other contributions have assessed employee involvement and creative performance within teams [46] in relation to the impact of job demands and resources [10]. We evaluate the nature of work and HRM using composite assessments of satisfaction, based on worker terms rather than on a particular action or project by managers, experts, or researchers [47]. Our goal is to go beyond the existing knowledge on job characteristics, job satisfaction, and performance by focusing explicitly on the “immaterial” side of satisfaction and its differential relationship to firm performance.

2.1. Immaterial Satisfaction

The construct of “immaterial” satisfaction differs from more standard concepts of job satisfaction in that it refers more closely to the variety and creativity of work in terms of the level of personal accomplishment and professional growth achieved by the worker. This approach can be located within the lively debate on early attempts to measure job satisfaction [48,49]. Thompson and Phua [50] studied the link between aspects of work and social relations in the workplace with job satisfaction and well-being; Kottwitz and Hünenez [51] studied job satisfaction, organizational citizenship behaviors, and job performance; Judge et al. [52] affective job satisfaction; Sacchetti and Tortia [38] worker motivation, perceived fairness, and satisfaction with creativity; also, Iqbal [53] reports that creative climate mediates the relation between HRM practices and organizational performance; finally, Harter, Schmidt, and Hayes [54] job satisfaction and information flows in multiple work tasks.

The link between job satisfaction and job performance has been established in meta-analytic studies on both individuals [55] and at the organization level [56]. In particular, Harter and colleagues found a generalizable positive relationship between job satisfaction and corporate performance measures such as customer satisfaction, productivity, and profits [54]. Similarly, in the organizational literature, work based on Hackman and Oldham’s job characteristics model [57] and related theories [58] provided empirically verified insights into which job characteristics promote job satisfaction. In addition, satisfaction has been particularly highlighted as a key outcome of sustainable HRM [59].

When the organizational context fosters inclusion as a way to promote sense making, critical inquiry, learning, and compatibility between individual and organizational goals, and when individuals have or can develop the skills to engage meaningfully in both autonomous and collaborative work, we hypothesize that immaterial satisfaction is higher.

Hypothesis 1.

Sustainable HRM practices positively influence immaterial satisfaction.

Performance is measured through directors’ self-reports on service quality and organizational innovation over a three-year period. This choice depends on the proven interconnection of service quality and innovation with organizational processes and managerial policies based on inclusion and creativity [46,60]. The study of the contribution of job demands/resources to organizational performance [45] has tested various mediating effects and how work climate influences performance [61,62], sharing the idea that satisfaction can be an important link between HR policies and organizational outcomes [63]. Accordingly, we can postulate our second hypothesis:

Hypothesis 2.

Immaterial satisfaction positively impacts on organizational performance.

2.2. Organizational Processes and Performance

We consider workload pressure, task autonomy, collaborative teamwork and involvement the job demands and resources that play a critical role in achieving individual well-being and corporate sustainability [64,65,66].

2.2.1. Task Autonomy

In conventional HR approaches, task autonomy implies that the individual can enjoy substantial freedom, independence, and discretion in planning his or her work and determining the procedures to be used to perform it [56]. However, in the context of sustainable HRM, autonomy implies more than the degree of discretion exercised in carrying out daily activities. More fundamentally, autonomy addresses the use of autonomous thinking, creative knowledge and intelligence to problematize situations, find appropriate ways of acting, and set goals that reflect desired outcomes. This means that workers can not only select routines that are relevant to solving particular problems but can discover new situations and are more likely to act intelligently and morally when the organizational context allows or requires them to do so [67,68,69].

Existing findings on task autonomy indicate a positive impact on satisfaction [70,71,72] and organizational performance [46,64,65]. However, the economic literature has also pointed to some negative impacts related to satisfaction [66] and business performance [73,74] because, in addition to expanding the set of behavioral options, performing autonomous tasks without supervision can also limit coordination, encourage free riding, shirking and other opportunistic hazards, or create obstacles to the proper circulation of information, lead to the exacerbation of divergent interests and the pursuit of incompatible goals. To the extent that autonomy shows both positive and negative impacts, its combined results need to be tested. Positive impacts are hypothesized to outweigh negative ones.

Hypothesis 3.

Task autonomy positively impacts on organizational performance.

Hypothesis 3a.

Immaterial satisfaction is a mediator between task autonomy and performance.

2.2.2. Collaborative Teamwork

An additional HRM practice highlighted in the context of corporate sustainability is collaborative teamwork, which can substantially expand the quantity and quality of resources available to workers, especially in terms of supportive relationships, mutual trust, and knowledge sharing. Through these resources, the team defines an area where engagement and participation support the transposition of CI into new actions in general, with a possible impact on satisfaction, even in its intangible dimensions. For example, the non-confrontational interaction between individuals with different attitudes (e.g., the “innovator” versus the “adaptor,” [74]) and the combination of different and complementary skills [75] contribute to West’s analysis of the team climate for innovation, which includes (a) commitment to specific goals; (b) participation in decision-making; (c) purposefulness; and (d) support for innovation ([76]; see also [77,78,79]).

Regarding performance, an overall positive relationship is observed. Using managerial assessments of leader support, teamwork cohesion, and organizational performance, Montes, Moreno and Morales [80] find a strong positive link between teamwork cohesion, organizational learning, and technical and administrative innovation as measures of organizational performance. Lee, Lee and Wu [81] find a positive impact of HRM practices, including teamwork, on firm performance (measured as productive efficiency), but the specific effect of teamwork is not singled out. Hoegl and Gemuenden [82] show that the quality of teamwork in terms of communication, coordination, balance of members’ contributions, mutual support, effort, and cohesion improves the implementation of innovative tasks and projects. More recently, Lee [83] considers the mediating role of teamwork, employee satisfaction, and job motivation in the relationship between sustainability-oriented HRM practices and organizational performance. Analysis of the 2015 federal employee perspective survey in the United States reveals that sustainable management has indirect effects on organizational performance through a complex interplay between teamwork, satisfaction, and motivation. This performance-enhancing potential of HRM practices informed by organizational justice and cooperation through employee collaboration and well-being is confirmed. The effect on performance is hypothesized to be positive.

Hypothesis 4.

Teamwork has a positive impact on organizational performance.

Hypothesis 4a.

Immaterial satisfaction is a mediator between teamwork and performance.

2.2.3. Involvement

A behavioral framework in which people are encouraged to articulate and communicate their views, share knowledge about the consequences of previous decisions, and reflect on feedback, thus influencing each other’s perspectives and preferences [84] may be suitable for analyzing engagement in decision-making and organizational processes. A “social” process aimed at understanding problems and conditions is activated, and engagement becomes an act of CI, which is expected to increase the individual’s sense of control (self-determination) and accomplishment, not least because it gives voice to insights and ideas that can then be verified and reflected in further action [84]. Consistently, involvement has been considered a key determinant of worker satisfaction [45]. Villajos, Tordera, and Peiro [65] also conclude that involvement is crucial in a sustainable HRM framework, as it can improve well-being and CI.

Research findings, however, are not unambiguous in this regard [85,86,87,88]. A negative relationship has been found between indirect (negative) objective measures of performance, such as voluntary turnover even in the presence of workplace hazards, and engagement [89,90]. Other studies show a positive relationship between involvement and productive performance. Wang, Liu and Zhu [91] find that HRM practices, employee attitudes and job involvement are positively related to firm performance (while satisfaction is not significant). Diamantidis and Chatzoglou [92] find an indirect link between involvement and firm performance, while Lawler [93] and Arthur [94] identify employee involvement as a key determinant of performance [45,95,96,97]. In more recent contributions, Saks [98] presents a conceptual framework in which caring HRM practices (among which job design, training and development, flexible work arrangements, participation in decision making, career development) result in an organizational climate of care and concern for employees, who reciprocate by caring for the organization. At the empirical level, Johansen and Sowa [99] find that employee involvement in decision making at different organizational levels affects managers’ and stakeholders’ perceptions of organizational performance in nonprofit hospitals. Finally, some authors find that high degrees of worker involvement in the absence of basic HR functions and practices in areas such as staff recruitment and performance management can result in poor management, inconsistent training, staff burnout, high labor turnover and sub-optimal performance, failing to deliver equity and efficiency outcomes [100].

Our survey targets a sample of workers employed in cooperative enterprises with a social purpose. About three-quarters of these workers are members who vote in regular annual assemblies and are involved both formally and informally in day-to-day decision-making processes. Consistently, we hypothesize that:

Hypothesis 5a.

Worker involvement has a positive impact on organizational performance.

Hypothesis 5b.

Immaterial satisfaction is a mediator between involvement and performance.

2.2.4. Workload Pressure

The demands organizations place on workers define workload pressure in terms of pace and intensity of work, meeting tight deadlines, and accountability to customers and users [101,102]. While theory holds that creativity and innovative thinking emerge from compression [103,104], field research has shown that workload pressure above a certain threshold is a hindrance to team performance and creativity and can cause stress and exhaustion in workers, thereby reducing their performance and professional growth potential [76]. Moreover, in a SHRM framework, workload can reduce employee satisfaction and loyalty to the organization [104]. Topcic, Baum and Kabst [41] compared the results of a company survey and an individual survey of a representative sample of the German population. They found that high job demands worsen stress. In contrast, de Reuver, Van de Voorde, and Kilroy [42] show that high workload can reduce negative employee outcomes, such as absenteeism, when opportunity-enhancing HPWSs are introduced, while skill- and motivation-enhancing HPWSs show no significant impact. Kaya, Koc, and Topcu [105] and Robinson, Roth, and Brown [106] found a positive link between workload and employee satisfaction, considered as an index of job performance.

In the field of public service and nonprofit studies, which is closest to our work, Bakker [43] shows that workers driven by public service motivations manage high workload demands and eschew burnout. However, excessive job demands and insufficient resources generate a cycle of loss and exhaustion that can reduce motivation and well-being. Clarke and Hill [44] studied HRM strategies that can reduce the negative effects (burnout, absenteeism and turnover) of work pressures faced by health care workers and their impact on well-being and service quality. Workload may not adversely affect individual and organizational outcomes when it does not cause undue stress. Finally, recent findings in the public and private service sector show that effective HRM can reduce emotional exhaustion and improve organizational commitment and employee performance [107,108]. Overall, the relationship between workload and performance should be positive, but needs further verification.

Hypothesis 6.

Workload pressure has a positive impact on organizational performance.

Hypothesis 6a.

Immaterial satisfaction is a mediator between teamwork and performance.

Non-rejection of H3, H4, H5 and H6 implies the presence of a significant direct effect of SHRM practices on organizational performance. However, non-rejection of H3a, H4a H5a and H6a implies the existence of a significant indirect effect passing through immaterial satisfaction, which is the result of the interaction between HRM practices and well-being at the organizational level. If the signs of direct and indirect effects are different, the total effect may be non-significant or negative. When total effects are positive and significant, managerial considerations recommend that HR managers promote HRM practices that improve individual well-being and performance.

The path diagram of our empirical model is reproduced in Figure 1.

Within the job demands and resources framework, studies have researched the impact of organizational processes as job resources on work engagement [109] and have also widened the scope of the model including the impact of work engagement on employees’ happiness and performance [110], even though this effect is usually studied at the individual more than organizational level [111]. Although the use of a multilevel SEM model and an organization survey questionnaire enabled the study of the impact of worker-level data on organizational performance, the precise choice of topic was supported by the large size and types of variables in the worker questionnaire.

3. Sample and Methodology

3.1. Sample

The 2008 SISC survey of Italian social cooperatives includes four different questionnaires, targeting paid workers, volunteers, organizations and managers. The survey was conducted between 2004 and 2007 by the Universities of Brescia, Milan, Naples, Reggio Calabria and Trento with financial support from the Italian Ministry of University and Scientific Research (MIUR). The sample of paid workers includes 4134 workers from 310 organizations, drawn from the ISTAT (National Agency for Statistics) 2003 census on social cooperatives in Italy [112]. The census counted 6168 active cooperatives employing at least one employee. The sample is nationally representative and stratified according to three different dimensions: (a) type of cooperative (A and B); (b) geographic representativeness by province (Italy has 20 regions and 107 provinces); and (c) size (number of employees). The questionnaires were filled out directly by workers on paper and given in anonymous envelopes to the survey staff. An average of 85 percent of workers answered 90 percent of the 87 questions (56 single choice and 31 multiple choice). A description of the socioeconomic characteristics of the workforce shows that they are workers in their 30s, predominantly women (74 percent), with permanent contracts (80 percent). Education is secondary school or university in 69% of cases. On average, the hourly wage is EUR 6.6, and the duration of employment is almost 6 years. The average company size is 33 employees.

Italian legislation defines two types of social cooperatives: Type A (78.0 percent) provides social services, while Type B (22.0 percent) is an enterprise that reintegrates weak individuals such as the disabled, victims of addiction, ex-convicts and the mentally ill into the labor market. The social cooperatives under study were located in different regions (40.2 percent in the Northwest, 21.8 percent in the Northeast, 22.0 percent in the Center and 16.0 percent in the South of the country). In relation to size, we consider the number of employees and observe that 25.5% were small cooperatives, 31.5% were medium cooperatives, and 43.0% could be considered large cooperatives.

3.2. Main Variables

Given the structure of the database, we studied two levels of variables. In the within level, we selected some HRM dimensions and immaterial satisfaction, while in the between level, we analyzed the organizational performance of each cooperative.

The measurement of the degree of autonomy perceived by individual workers is based on three indicators related to daily tasks, management of relationships with customers and users, and problem solving. The measurement of collaborative teamwork considers the resources available to workers in terms of supportive and quality relationships, mutual trust and knowledge sharing. The perceived intensity of involvement was measured, basically, through the level of development of interpersonal relationships and participation in the organization’s mission and decision-making processes. Finally, workload pressure refers to the pace and intensity of work (difficult goals and involvement in different activities), meeting tight deadlines, and responsibilities to customers and users. These job characteristics are in line with commonly accepted definitions of sustainable HRM practices [105]. Immaterial satisfaction corresponds to the indicators of creativity, personal fulfillment and growth, and autonomy at work. Finally, we measured organizational performance based on directors’ self-reports of whether the organization has improved service quality and introduced service, technological, and organizational innovations in the past three years.

3.3. Methodology

Given the objectives of this study, we initially performed a descriptive analysis of the observed variables in terms of positional measures and used exploratory analysis techniques to evaluate their covariance matrix. We then used confirmatory factor analysis in Stata 14.0 to examine the size structure of the theoretical constructs involved in our hypotheses [113,114,115]. The working hypotheses are tested by a multilevel SEM model in which workers (first level) are nested within organizations (second level). The model is based on two sets of equations that specify worker-level and organization-level effects on organizational performance [116].

At the worker or within level, the relationship between HRM practices and immaterial satisfaction are analyzed (1):

S_ij = a_1j + b_1jHRM_ij + e_ij

(1)

where the immaterial satisfaction of the ith worker in the jth organization, S_ij, is determined by SHRM practices (HRM_ij). The coefficients of the model are the intercept (a) and slopes (b), which are interpreted as direct effects of the model at the within level. At the organization or between level, the slopes (β) are modeled to vary according to the main characteristics of the organization (2):

S_j = α + β₁HRM_j + μ_j

P_j = α + β₂S_j + β₃HRM_j + ω_j

(2)

Equation (2) is also a regression model, being S_j the immaterial satisfaction, HRM_j the HRM practices, and P_j the organizational performance of the jth organization. The expressions in (2) suggest that the slopes of the model vary across organizations and that the changes can be explained by HRM practices and immaterial satisfaction. The coefficients are the intercept (α) and slopes (β), which are interpreted as direct effects in the between level.

The estimation method is Robust Maximum Likelihood (MLR), obtained using the TYPE = GENERAL TWOLEVEL option of Mplus 7.4. The MLR estimator is based on maximum likelihood parameter estimates with standard errors robust to non-normality. This statistical approach allows one to obtain, test and estimate measurement and/or structural models based on robust statistics with multivariate non-normality and non-independence of observations [117,118,119]. At the same time, to evaluate the overall fit of these models, robust χ² statistics as well as goodness-of-fit statistics and indices were calculated (Root Mean Square Error of Approximation (RMSEA), Comparative Fit Index (CFI), and Standardized Root Mean Square Residual (SRMR) [120,121]).

4. Results

The descriptive statistics of the organizations under study are shown in

Table 1. Description of the sample.

Variable *	Description	%
	Northwest	40.2
	Northeast	21.8
Region	Center	21.9
	South	16.1
	Lower than 15	25.5
Size	Between 16 and 50	31.5
	Higher than 50	43.0
	Type A	78.2
Legal Form	Type B	21.8

* Total number of observations is 320 organizations.

. Regarding the indicators specified in the previous section, which are a first approximation to our database, we find organizations that have developed a high degree of task autonomy (4.25–4.70; 1–7 Likert scale), teamwork (5.49–5.85; 1–7 Likert scale) and workload pressure (4.32–5.17; 1–7 Likert scale). The lowest value is observed in relation to involvement (2.88–3.27; 1–5 Likert scale). These organizations achieve important levels of immaterial satisfaction (4.64–5.20; 1–7 Likert scale) and performance (3.78–4.31; 1–5 Likert scale). In each case, high standard deviations are observed that justify the use of robust estimators.

Table A1. Descriptive Statistics and Correlation Matrix.

		Mean	Range	Std.Dev	Task	Users	P. Solv	Coop	Support	Quality	Trust	KShar	Involv	Respon	Diffic	WPace	Relation	Mission	DecMak	PersDev	Auton	SelfFul	Creativ	ProdQual	InnoServ	InnoTech
	Task	4.70	1–7	1.96
AT	Users	4.68	1–7	1.88	0.53
	P. Solv	4.25	1–7	1.95	0.52	0.51
	Coop	5.49	1–7	1.56	0.12	0.09	0.03
	Support	5.72	1–7	1.48	0.13	0.12	0.05	0.36
TW	Quality	5.85	1–7	1.46	0.14	0.09	0.05	0.39	0.42
	Trust	5.55	1–7	1.43	0.20	0.13	0.08	0.55	0.38	0.40
	KShar.	5.61	1–7	1.40	0.18	0.14	0.06	0.56	0.43	0.43	0.68
	Involv	4.92	1–7	1.90	0.09	0.04	0.03	0.16	0.17	0.21	0.17	0.19
WP	Respon	5.17	1–7	2.04	−0.01	0.00	−0.06	0.08	0.09	0.11	0.07	0.14	0.40
	Diffic	4.32	1–7	1.85	−0.02	−0.01	−0.03	0.01	0.05	0.06	0.01	0.02	0.33	0.45
	WPace	4.62	1–7	1.80	−0.02	−0.01	0.03	0.01	0.05	0.07	0.01	0.01	0.39	0.28	0.45
	Relation	3.27	1–5	1.09	0.17	0.09	0.09	0.22	0.30	0.21	0.29	0.27	0.10	0.06	0.07	0.02
I	Mission	3.13	1–5	1.24	0.19	0.05	0.11	0.12	0.21	0.19	0.19	0.19	0.10	0.09	0.10	0.06	0.45
	Decision	2.88	1–5	1.26	0.21	0.09	0.13	0.12	0.22	0.20	0.21	0.20	0.10	0.08	0.11	0.09	0.41	0.74
	PersDev	5.20	1–7	1.67	0.21	0.14	0.12	0.24	0.32	0.26	0.28	0.30	0.10	0.08	0.03	0.02	0.37	0.37	0.36
S	Auton	4.92	1–7	1.49	0.46	0.32	0.31	0.22	0.26	0.22	0.31	0.30	0.12	0.04	0.01	0.01	0.30	0.28	0.30	0.51
	SelfFul	4.64	1–7	1.59	0.23	0.13	0.13	0.25	0.33	0.25	0.29	0.31	0.16	0.11	0.06	0.07	0.31	0.29	0.29	0.54	0.52
	Creativ	5.07	1–7	1.48	0.23	0.12	0.11	0.25	0.27	0.25	0.32	0.32	0.25	0.18	0.16	0.10	0.27	0.25	0.25	0.37	0.37	0.44
	ProdQual	4.31	1–5	0.75	−0.04	−0.04	−0.05	0.00	0.05	0.01	0.01	0.00	0.02	0.06	0.00	0.07	0.04	0.01	0.02	0.04	0.00	0.04	0.00
P	InnoServ	4.23	1–5	0.73	−0.01	−0.03	−0.02	0.04	0.08	0.06	0.04	0.05	0.07	0.07	0.03	0.04	0.06	0.07	0.05	0.08	0.03	0.07	0.06	0.51
	InnoTech	3.98	1–5	0.80	−0.04	−0.03	0.00	−0.01	0.02	−0.03	0.00	0.00	0.06	0.06	0.07	0.12	0.03	0.02	0.02	0.06	0.01	0.06	0.06	0.33	0.50
	InnOrg	3.78	1–5	0.80	−0.04	−0.06	−0.03	−0.04	0.02	−0.08	−0.02	−0.02	0.04	0.05	0.07	0.08	0.06	0.03	0.03	0.02	0.00	0.01	0.03	0.41	0.44	0.54

Source: Authors’ calculations on SISC 2008 (Survey on Italian Social Cooperatives 2008).

in Appendix A also presents the correlation matrix between the six indicators, which are highly correlated with each other. Therefore, we conducted confirmatory factor analysis (CFA) separately on all six latent dimensions to demonstrate the convergent validity of our measures.

Table 2. Measurement model.

Latent Dimension	Indicators	Factor Loading	Cronbach’s Alfa	CRC	AVE	Goodness-of-Fit
Task autonomy (TA)	Autonomy in organizing job tasks	0.727 ***	0.770	0.709	0.503
	Autonomy in relations with clients and users	0.710 ***
	Autonomy in problem-solving	0.691 ***
Collaborative teamwork (CT)	Cooperation	0.698 ***	0.800	0.702	0.500
	Support by the management	0.562 ***
	The quality of results	0.554 ***
	Widespread feelings of trust and respect	0.870 ***
	Sharing of knowledge and experience	0.810 ***
Workload pressure (WP)	Involvement in different activities	0.658 ***	0.720	0.703	0.500	c2: 1831.76 (432) RMSEA: 0.039 CFI: 0.901 SRMR: 0.047
	High responsibilities	0.664 ***
	Reaching difficult objectives	0.802 ***
	Working at a fast pace	0.687 ***
Involvement (I)	Development of interpersonal relations	0.518 ***	0.770	0.739	0.546
	Involvement in the mission	0.869 ***
	Involvement in decision making	0.830 ***
Satisfaction (S)	Variety and creativity of work	0.569 ***	0.770	0.655	0.428
	Professional growth	0.650 ***
	Personal fulfilment	0.685 ***
	On-the-job autonomy	0.714 ***
Performance (P)	Service quality	0.927 ***	0.770	0.884	0.781
	Service innovation	0.903 ***
	Technological Innovation	0.856 ***
	Organizational innovation	0.850 ***

*** p < 0.01.

presents the results of the estimated CFA model. The statistics show a reasonable fit (χ² (13) = 1.831.76, RMSEA = 0.039, SRMR = 0.047 and CFI = 0.901). The internal consistency given by the reliability analysis is reasonable (Cronbach’s alpha > 0.7; CRC > 0.7 and AVE > 0.5) for all dimensions, and this also indicates a prima-facie confirmation of construct–identification validity.

In addition, the analyzed structure provides sufficient evidence of discriminant validity, as the factor loadings exceed the observed correlations between dimensions on the validity of multidimensional constructs [115,122,123].

After testing the measurement model, we test our working hypotheses.

Table 3. Results of multilevel model.

Model	Est.	R2	Goodness-of-Fit
Task autonomy			c2(54): 213.75 RMSEA: 0.033 CFI: 0.956 SRMR: 0.036
Workers level
Task Autonomy → Satisfaction	0.226 ***	0.051
Organizational level
Task Autonomy → Satisfaction	−0.126	0.004
Satisfaction → Performance	0.055	0.018
Task Autonomy → Performance	0.065
Indirect	0.003
Total	−0.091
Collaborative teamwork			c2(88): 314.662 RMSEA: 0.034 CFI: 0.948 SRMR: 0.035
Workers level
Collaborative teamwork → Satisfaction	0.377 ***	0.142
Organizational level
Collaborative teamwork → Satisfaction	0.383 **	0.147
Satisfaction → Performance	0.054	0.008
Collaborative teamwork → Performance	0.055
Indirect	0.036
Total	0.130
Involvement			c2(88): 355.85 RMSEA: 0.033 CFI: 0.939 SRMR: 0.032
Workers level
Involvement → Satisfaction	0.335 ***	0.112
Organizational level
Involvement → Satisfaction	0.154	0.024
Satisfaction → Performance	0.014	0.048
Involvement → Performance	0.217 **
Indirect	0.004
Total	0.384 **
Workload pressure			c2(88): 355.85 RMSEA: 0.033 CFI: 0.939 SRMR: 0.032
Workers level
Workload pressure → Satisfaction	−0.033	0.001
Organizational level
Workload pressure → Satisfaction	−0.337 ***	0.113
Satisfaction → Performance	0.170	0.096
Workload pressure → Performance	0.322 ***
Indirect	−0.243
Total	0.265 ***

Significance levels: ** p < 0.05; *** p < 0.01.

shows the results of the multilevel SEM model for each practice.

We hypothesize that worker empowerment in an HRM system is the combined result of more intense demands from the organization, which increase workload, and of the job resources deployed by the organization. In both cases, empowerment can improve worker productivity, affecting the ability to use creative intelligence and increasing well-being.

The results show that the relationship between job resources embodied by SHRM practices and immaterial satisfaction at the within level is strong and positive (Task Autonomy → Satisfaction: 0.226; Collaborative Teamwork → Satisfaction: 0.377; Involvement → Satisfaction: 0.335). Compared with autonomy, practices that show a high degree of relationality, such as teamwork and involvement, play a better role in influencing satisfaction. However, no relationship was found between workload pressure and satisfaction at the within level, thus confirming the purely instrumental role of job demands in achieving organizational goals (Workload Pressure → Satisfaction: −0.033). We cannot reject H1 because of the positive influence of job resources on immaterial satisfaction.

The between level shows the relationship between sustainable HRM and organizational performance, taking into account the mediating role of immaterial satisfaction. Table 3 shows the total effects, which are the sum of direct and indirect effects. Direct effects run from HRM practices to performance, while indirect effects can be seen as the product of the impacts of these practices on satisfaction and satisfaction on performance. The total effect of immaterial satisfaction on performance is positive and significant. The direct effect is positive but not significant. However, if we consider the total model, we find that the sum of the direct and indirect effects is positive and significant; thus, we cannot reject Hypothesis 2 either [122].

The overall relationship between autonomy and performance is not significant (total: −0.091). While the impact of autonomy on well-being is positively high and significant at the individual level, its organizational (between) effect on satisfaction is negative but not significant, implying a possible negative role in terms of lack of coordination, exchange of knowledge and learning from peers, dissemination of information, and emergence of divergent goals. It could also be related to the specific governance structure of social cooperatives, where most workers are members and may enjoy a high degree of discretion in the execution of tasks. Such discretion however, may negatively affect satisfaction at the organization level. Indirect effects are negligible and the total effect is still negative, but small and not significant.

The total effect of collaborative teamwork on performance is positive but negligible (total: 0.130). Consequently, the main function of teamwork lies in its potential to increase workers’ well-being and improve their capabilities, as its impact on satisfaction is positive and significant at both the individual and organizational levels (Collaborative Teamwork → Satisfaction: 0.383). The impact of involvement, however, is positive and significant (total: 0.384), implying that participatory processes significantly improve well-being (Involvement → Satisfaction: 0.335), while also influencing product quality and innovation (Involvement → Performance: 0.217). Although a mediating effect of satisfaction cannot be demonstrated, the total effect at the between level is the combined result of a positive (but not significant) effect of involvement on satisfaction and a positive and significant direct impact on performance. The effects of satisfaction reinforce the direct impact of involvement on performance, as the total impact is substantially higher than the direct impact. The direct effect can be interpreted by saying that cooperative governance, as it is based on inclusion, is able to create new organizational knowledge and organizational routines, which support performance at the microsystem level [123]. The strong managerial implication is that social cooperatives should promote organizational processes formed and sustained by involvement.

Workload pressure (WP) shows a positive and significant total impact on organizational performance (total: 0.265). The total effect is the result of opposing forces, as at the organizational level WP decreases employee well-being (WP → Satisfaction: −0.337), but at the same time directly increases performance (WP → Performance: 0.322). This is clearly in line with the idea that WP directly increases productivity in a quantitative and mechanical way (workers have to work harder), but also that the goals in the organization of work should be challenging for the worker [124]. The balance between the direct positive effect and a weaker indirect negative effect is positive and significant and confirms the importance of balancing organizational pressures (job demands), which can increase stress and exhaustion, and reduce consensus, with the inclusiveness of organizational relationships, which can foster human growth.

Table 4. Results in terms of working hypothesis.

H	Hypothesis	Expected Sign	Result
H1	HRM characteristics positively influence immaterial satisfaction.	+	Non-reject
H2	Satisfaction positively impacts on firm performance	+	Non-reject
H3	Task autonomy positively impacts on firm performance	+	Reject
H3a	Immaterial satisfaction mediates the relation between autonomy and performance	+	Reject
H4	Teamwork has a positive impact on firm performance	+	Reject
H4a	Immaterial satisfaction mediates the relation between teamwork and performance	+	Reject
H5	Worker involvement has a positive impact on firm performance	+	Non-reject
H5a	Immaterial satisfaction mediates the relation between involvement and performance	+	Reject
H6	Workload pressure has a positive impact on firm performance	+	Non-reject
H6a	Immaterial satisfaction mediates the relation between workload pressure and performance	+	Reject

confirms the non-rejection of hypotheses 5 and 6 regarding involvement and workload.

The multilevel structure of the model showed that both involvement and workload have a positive and significant impact at the organization level. The positive impact of involvement at the between level relates to the governance structure and HRM practices. It emerges as the one organizational characteristic that promotes both individual well-being and performance. In contrast, workload pressure improves performance but curbs satisfaction at the organization level, generating potentially unsustainable effects on employee well-being. The role of immaterial satisfaction as a mediator between SHRM practices and performance is not confirmed. This is because autonomy, teamwork and involvement have a strong positive effect at the individual level, while the combined (indirect) effect of HRM practices on satisfaction and satisfaction on performance at the between level is generally negligible.

Discussion of Results and Theoretical Implications

Discussion of our results leads us to emphasize that organizational performance, and innovation in particular, must be analyzed under the assumption that markets cannot be “perfect,” as in the neoclassical paradigm, and that firms do not build their internal capabilities to take advantage of “market failures.” In line with Maxfield [125] and Lee and Maxfield [126], we argue that markets are not “completed”, and imperfections are not exploited to increase gains. Instead, governance and organizational routines are set up to achieve survival and social goals through the sustainable production of economic and social value (increasing employment, supporting beneficiaries and other weaker stakeholders, and, according to Hansmann’s [127] theory of nonprofit organizations, producing welfare services without exploiting asymmetric information).

In social service sectors, profits are close to zero, and the nonprofit nature of the organization does not allow for significant private gains. Given the relational nature of the services provided, HRM practices assume a particularly strategic role, as they can improve relational quality by supporting the maintenance or enhancement of better attitudes (particularly well-being, social and relational motivations). Moreover, HRM practices based on engagement and collaboration have been shown to improve service quality and innovation directly, perhaps through a positive impact on the ability to build specialized resources, dedicated organizational routines, and dynamic capabilities, as in Maxfield [127], Tortia and Troisi [128]). Dedicated routines embedded in HR practices are needed to build appropriate organizational and human resources from an evolutionary perspective. Organizational resources (in our case, job resources) are used to create new value and ways of interacting with different publics (customers, beneficiaries, and the local community, as in Sacchetti and Sugden [129]) through contracts, networks, and public-private partnerships. This process of change and innovation requires an increase in productivity and workload, of which a positive impact on performance is also expected.

Our results are also in line with those of Ostroff [18], in that they show a positive relationship between HRM practices and immaterial job satisfaction and also between some practices and firm performance. Furthermore, Messersmith et al. [20] find a mediating effect of worker attitudes (job satisfaction, organizational commitment and psychological empowerment) and organizational citizenship behavior in the HRM-performance nexus. Our contribution differs from theirs in terms of the practices considered, economic sector (nonprofit vs. public sector), measures used (self-reported vs. administrative), and satisfaction components considered (immaterial satisfaction instead of general job satisfaction and wage satisfaction). In a meta-analytic study, Jiang et al. [130] show that HR systems are related to financial and operational performance both directly and indirectly through their influence on human capital and employee motivation, as well as voluntary turnover. Along the same line, more recent contributions show that several behavioral elements, such as intrinsic motivation [131], trust and organizational justice [132,133] and well-being [134], mediate the relationship between high-performance work systems (HPWS) and both individual outcomes (e.g., employee satisfaction and organizational citizenship behavior) and organizational outcomes (e.g., service quality and innovation).

Recently, HPWS have been partially incorporated into a sustainable HR framework [135], allowing to further develop existing findings. Most contributions exploit similar methodologies to ours, namely multilevel or longitudinal SEM modeling, as in Shen, Messersmith, Jiang [136]. Wang and Tseng [137], for example, use a job demands and resources model to conclude that work engagement is a significant mediator between some sustainable HR practices and service quality in the hospitality industry. These findings are coherent with the conclusion that sustainable HRM supports both the intangible elements of satisfaction and service innovation through the likely intervention of intrinsic motivation, creative intelligence, and professional growth, while controlling the negative effects of workload pressure.

The theoretical implications of our work relate to the Deweyan approach to human growth for the study of the determinants of organizational performance and worker outcomes [138,139,140,141]. CI use and associated performance are linked to dimensions of sustainable HRM, which can make a difference on the quality of services provided to users, a crucial outcome in the social service sector. In light of our findings, the human growth perspective can refine the current understanding of organizational resources, demands, and performance that account for employee achievement in a manner consistent with the organization’s interests. Through the involvement factor, we interpreted the “engagement of body and mind” advocated by Dewey. Involvement is the most powerful way to increase innovation and service quality, which have the unique potential to improve users’ quality of life. This is probably because involvement can support engagement. Engagement implies and emphasizes the importance of deliberative mechanisms to support autonomous thinking, along with the complementary principles of interconnectedness and intersubjective understanding of reality. By definition, it must contain elements of coordination with others. Here, the Deweyan notion of the relationship, or interconnectedness, of the individual with the environment plays an important explanatory role. Through deliberation, the perspectives and needs of others can be integrated into the evaluation of situations and problems. This is especially true when deliberation concerns values and CI and is used to shape the organization’s strategic choices, rather than being confined to specific teamwork tasks defined by superiors. Consequently, our approach underscores why users can be seen as one of the constituencies interested in organizational choices regarding the human growth of employees.

5. Conclusions

According to Goal 8.5 of the Sustainable Development Goals, organizations should promote inclusive and sustainable economic growth, employment and decent work for all. Decent work requires a minimum level of job satisfaction, which can only be achieved through appropriate HRM and other inclusive organizational processes. Inclusion-based sustainable HRM promotes better organizational performance, corporate and social sustainability with the help of enhanced employee well-being. Consistently, the objective of our work was to analyze the impact of some selected SHRM practices on well-being and performance and the mediating role of immaterial satisfaction using a sample of employees of Italian social enterprises. Worker involvement and workload pressure both promote performance, although a balance between them is needed to ensure adequate levels of job satisfaction. Similarly, work resources, rather than work demands, emerge as more crucial dimensions for sustaining performance. The organizational effects of collaborative teamwork are positive but are not significant.

The study’s limitations include its national character. Care should be taken in generalizing the results, as most of the workers in the sample are women and members of their cooperative. The formal right to participate in general meetings and to elect representatives to the board of directors may give special weight to the processes of involvement in influencing the performance of the enterprise, unlike in most other organizational forms. However, there are good reasons to believe that our results can be relevant in other organizational contexts, especially in activities where interpersonal relationships in service delivery and service quality play a key role. It would also be interesting to consider other outcomes, purely economic as well as social and environmental.

Methodologically, in the absence of controlled randomized experiments, we are unable to establish causation. Furthermore, the cross-sectional design of the study does not allow to detect unobservable heterogeneity and endogeneity biases, such as cumulative or reverse causality and temporal dynamics. We add that the performance question is phrased in terms of quality improvement and innovation over three years, while the measurement of HRM practices and job satisfaction does not refer to a specific time frame (it can be assumed that they refer to recent worker perceptions). Therefore, to appreciate the impact of HRM practices on performance, we are forced to assume that workers’ perceptions have not changed significantly in recent years. That said, since we assume that HRM practices are defined almost exclusively by managerial discretion, they are identified as exogenous factors beyond workers’ control. In this sense, it is correct to analyze their impact on well-being as an intermediate outcome and on service quality and innovation as an end result.

Finally, regarding common method variance (CMV) due to systematic bias and spurious correlations between different responses [142], overestimation of parameters is not a necessary outcome of self-rating, which instead can lead to underestimation due to lack of reliability and measurement error [143,144]. Besides, the multi-rater and asynchronous nature of the data (workers’ perceived evaluations of HRM practices and subjective well-being, and directors’ evaluation of organizational performance took place in different contexts at different times), the strict anonymity of respondents, national coverage, and large questionnaire size are probably sufficient methodological guarantees. In principle, some bias might persist, since satisfaction and HRM practices are both evaluated by workers. However, we have shown that the indirect effects of practices that pass through satisfaction are minimal and not significant.