1. Introduction
Organizations are currently shifting their strategies and goals to be more environmentally conscious [
1], as the significant literature focused on larger firms rather than SMEs despite SMEs highly impacting the environment due to their commercial activities. However, continuous pressure from stakeholders forces SME management to implement environment-related initiatives. The literature highlights that top management plays a vital role and human resources management (HRM) practitioners have the high latitude to influence the environmental performance of the organizations. Accordingly, the top management of SMEs reconsiders their objectives and broadens the scope of their operations by including green HRM practices to improve environmental performance [
2]. GHRM has been defined as a way to manage and streamline HRM practices to pursue sustainability [
3]. It influences the actions, attitudes, awareness, and motivation of people to have a greener environment [
4,
5]. Organizations and employees both benefit from the adoption of GHRM practices because it boosts employee morale and productivity [
6]. The organization’s financial and environmental performance can both be enhanced by using GHRM [
3,
7].
GHRM involves practices such as green recruitment and selection (GRS), green training (GT), and green pay and reward (GPR) to increase green employee performance [
8]. Hence, GHRM in the organizational setting can improve green performance (GP) by recruiting environmentally concerned employees, providing green training, encouraging employees to be involved in green activities by establishing green reward structures, and creating a platform where employees can engage in green initiatives [
9]. Few studies have investigated the impact of GHRM on a company’s GP with a mediation–moderation model [
5,
10]. Thus, researchers need to identify that GHRM alone is not always enough to enhance performance [
11]. In addition, a green work climate (GWC) is essential for increasing green work engagement (GWE) and performance [
12]. GWC, GWE, and green employee behavior (GEB) are among the significant constructs in enhancing GP [
13,
14].
The relationship between GHRM practices, GWC, GWE, GEB, and GP has been built on the basis of abilities, motivation, and opportunities (AMO) theory [
15]. According to AMO theory, HRM is carried out by increasing employee ability by motivating employees to become high-performers and boosting employee performance by providing them with a platform through which they can avail opportunities and become more productive [
16]. Based on the grounds of AMO theory, the objective of green performance can be achieved if employees are provided with GHRM practices such as GT, are recruited on the basis of green values, and are rewarded conditionally by carrying out an effective performance management system [
17]. When these green initiatives are taken by the organizations, employees’ abilities are enhanced and they are motivated because they know that their organization is supportive enough in providing green opportunities [
18]. These GHRM practices provide a healthy work atmosphere that makes employees engaged towards their work and that engagement is reflected in their behavior which is the urge to achieve green performance [
6,
13,
19].
Besides these variables, individual green values (IGV) are considered to be an important variable in the organizational context, but they vary from person to person [
20]. Contemporary individual values have been emphasized in the literature as a significant construct in explaining individual attitudes and behavior [
21]. Individuals nowadays are concerned about the well-being of the environment, which has a major impact on their positive environmental behaviors [
22]. Individual green values are extremely important in shaping an individual’s behavior. When an employee’s values are aligned with organizational green values, his/her green behavior would certainly become enhanced [
23].
Recently, there has been an increase in the number of manufacturing SMEs around the globe but, unfortunately, very few institutes have attempted to make green practices an integral part of their system [
24]. Manufacturing SMEs harm the environment in a variety of ways, e.g., improper hazardous waste disposal, excessive use of resources, e.g., waste, enormous energy use, and lack of awareness of greening the environment.
There is limited research in the context of manufacturing SMEs on the relationship between GHRM and GP through GWC, GWE, and GEB [
25,
26,
27,
28]. Moreover, in recent years, GHRM research has flourished, with studies conducted in a variety of industries, including tourism and hospitality [
29], the information and technology sector [
30], and the automobile sector [
31]. Nonetheless, there is a lack of research on GHRM in manufacturing SMEs [
24]. This stance was supported by a recent study by [
32], who also researched a variety of service sectors.
Therefore, to fill the gaps that have been found, this study proposes the following research objectives that empirically link GHRM practices and GP: to evaluate the impact of GHRM practices on GP through the mediating role of GWC, GWE, and GEB, and to examine the moderating role of IGV on the relationship between GWC and GEB in the SMEs of Pakistan. Pakistan, like many other nations, is dealing with environmental issues. In Pakistan, environmental contamination is rising quickly [
26]. The Pakistani government is working to put several legal provisions in the Pakistan Environmental Protection Act into effect in order to address these risks and decrease the harm that environmental pollution causes [
33]. In today’s globalized world, environmental issues are essential to avoid long-term or legal consequences because, in such a fiercely competitive atmosphere, focusing solely on profit cannot support organizations [
5].
In addition, this paper discusses how the hypotheses were tested and justifies why the research strategy was chosen. The findings are presented and analyzed and the most important ones are also discussed. This paper finishes by demonstrating important contributions to theory and practice, as well as suggesting some potential research avenues. Moreover, this research contributes to the existing empirical literature on the relationship between GHRM and green performance, making it unique and useful for solving green organizational challenges. Prior studies have only looked at the direct relationships, rather than investigating how the interaction between GHRM and GWC, GWE, and GEB leads to improved GP [
10,
11]. In reality, research suggests that SMEs are responsible for around 70% of industrial pollution [
34]. Manufacturing SMEs are particularly important for a green transition as they are responsible for producing a great amount of the world’s waste, pollution, and resource consumption [
35]. Thus, this study reveals how GHRM practices help an organization’s management improve its GP to contribute to society and the literature on GHRM in general and in manufacturing SMEs in particular.
5. Discussion
The findings of this study are highlighted and discussed on the basis of the research objectives. Firstly, the findings signify that the three GHRM practices (GRS, GT, and GPR) lead to GWC which is in line with the study of [
56]. Secondly, GRS, GT, and GPR also have a positive relationship with GWE, as when employees are provided with GHRM practices their engagement level increases. The study of Aboramadan [
54] also supports the same relation. Moreover, the findings also reveal that when GWC is ensured by an organization, it results in GWE. The results of this relationship are also supported in the research of [
32]. Support for the hypothesis suggests that employees may be more engaged, passionate, and dedicated to carrying out environment-related tasks at work if they have a positive perception of their organization’s dedication to environmental protection and believe their organization is operating in an environmentally responsible manner. The direct relation of GWC with GEB and GP is also positive and significant, and the results are in line with the work of [
6,
56]. Expanding the discussion to the next relationship of GWE with GEB and GP, the findings show that GWC leads to both GEB and GP. The former relation is supported by the study of [
9], and the latter relationship is in line with the research of [
30]. The last direct relationship between GEB and GP is positive and significant and is supported by [
31].
Based on the findings, the study confirms that GHRM practices (GRS, GT, and GPR) are important enablers for strengthening GP in the manufacturing sector. Therefore, strategies such as offering proper training to employees, e.g., on waste recycling, waste reduction, energy saving, etc., and providing opportunities for them to participate in green schemes, e.g., creating recycling programs, green events, etc., could help in improving GEB, as well as their GP. Moreover, employees who come up with the successful implementation of green behaviors, i.e., eco-centric, eco-civil and eco-helping behaviors, can be provided with monetary and non-monetary rewards. Our findings further reveal a link between GHRM practices and environmental performance. Organizations should implement policies related to environmental sustainability targeted at improving employees’ competencies (e.g., effective GRS policies, training programs, and a smooth incentive and pay system) to encourage individual responsibility and improve workplace performance [
6].
Through the mediation of GWC, GWE, and GEB, our findings also demonstrate linkages between GHRM practices and green performance. Thus, implementing a green work climate, green employee involvement, and green employee behavior help to improve green [
21,
69,
70,
84]. Manufacturing SMEs should adopt the Go Green idea to promote an environmentally friendly workplace climate [
50]. Manufacturing SME employees, including teaching, research, and administrative personnel, should use green and environmentally friendly techniques in their daily activities [
54]. Furthermore, this study proves the benefits of GHRM practices on GP via mediating variables. The findings are in line with the studies of [
8,
13,
45]. As a result, the findings of this study are consistent with the previous GHRM literature.
GHRM methods, apart from having a direct impact on green performance, also indirectly influence green performance. For example, providing a healthy workplace environment, engaging them through GHRM practices, and appraising performance may help to improve environmental knowledge, skills, and abilities, resulting in higher GP [
39]. These practices also encourage employees to become involved in sustainable practices [
14]. Hence, this is the first study in which such mediating effects have been examined to fill the research gap in published studies. The empirical findings show that through the mediating influence of GWC, GWE, and GEB, the three green HRM practices result in stronger GP. As a result, increasing the effectiveness of GP aimed at attaining the organization’s green goals requires encouraging employees’ commitment to green policies and encouraging them to change their green behavior at work.
In addition, the results confirm the premise that integrating IGV considerably increases GP, especially when IGV is high. High green values enhance the positive impact of GWC on green behavior. The research of [
56] also supports this relationship. This fills in the gaps in the research on the interaction of individual green values. Therefore, organizations must hire those individuals whose individual values are aligned with organizational green values. Lastly, by investigating the AMO theory [
18], parts of GHRM, and how they contribute to the firm’s green performance, our study provides a substantial contribution to green management research. The paper also proposes a novel paradigm for maximizing GP by combining GHRM and GP. Thus, the findings of this study contribute to a better understanding of how manufacturing SMEs might achieve optimal GP. The study also presents an integrated research framework through which firms can make efficient strategic green management decisions, opening up new research opportunities for future green management research.
5.1. Implications of the Research
5.1.1. Implications for Scholars
In the following respects, this work contributes to the literature on green performance. To begin, it applies the AMO arguments to green management by looking at how companies use GHRM practices, a green work climate, green employee engagement, and green employee behavior to achieve optimal green performance. Other GP research [
13,
38,
42] focuses on GHRM and GP relationships without looking at the moderating influence of individual green values. The research presents a theoretical underpinning for how organizations might adopt GHRM practices to achieve optimum GP in terms of GHRM practices.
As a result, the study proposes that by incorporating GHRM principles, manufacturing SMEs can achieve an ideal level of GP while also complying with regulatory authorities. By making this suggestion, the study broadens the AMO theory’s relevance to GP. In order to better understand environmental performance and give institutes a way to think about implementing GHRM techniques, the study leverages the AMO as a theoretical foundation. Second, by proposing an integrated framework within which to evaluate how organizations achieve increased GP by integrating IGV and GHRM practices, the study contributes to the green management literature. Previous studies have simply looked at the GHRM and GP link without taking into account the mediation of GWC, GWE, and GEB with the moderating influence of IGV. As a result, the report provides a broader view of the firm’s GP and expands on prior research that did not take these factors into account.
5.1.2. Implications for Managers and Policymakers
The research has implications for senior management as well as academia. According to the findings, human resource managers may establish green competencies through hiring, training, and the development of staff. They can also inspire employees to be more environmentally conscious by implementing effective recruitment and selection processes, as well as developing reward and pay systems for employees who are more environmentally conscious. They can also give green opportunities by including staff in green planning, appreciating their green knowledge, and empowering them to implement fundamental green practices. The insights will also assist managers in creating a green work environment. This will result in increased green work engagement, employee behavior, and performance.
Moreover, green individual values are the subject of research. Academia will use the study’s findings to teach students and future managers about the potential of green individual values (GIV), as well as the interactional effect of GIV on green climate and green employee behavior. The teaching of green values has been difficult due to a lack of scientific evidence, must-know principles, and best practices. Even though the literature portrays green individual values as a critical topic, it lacks sufficient empirical evidence (surveys and case studies) to justify manufacturing SMEs.
Lastly, the study also provides evidence-based knowledge to top management on how different parts of GHRM affect an organization’s GP, as well as the impact of the combined effect of GHRM, GWC, GWE, and GEB on a company’s GP. As a result of this presentation, they can prioritize resource allocation for the sake of GP. The findings also offer a proactive way for manufacturing SMEs to improve their GP while complying with legal requirements.
5.2. Limitations and Future Research
Despite substantial contributions, this research has a number of limitations. First, the sample size is limited; therefore, the results’ applicability to a broader scale may be limited. This is because the employee population of Pakistan’s manufacturing SMEs is too large to allow such broad generalization.
Second, the study is cross-sectional; therefore, it is suggested that future researchers who want to build on our work can do so by using a different data source. They may use longitudinal data to determine the direction of causality and gain a clear picture of how GHRM qualities, green work climate, green work engagement, and green employee behavior connect to GP at diverse manufacturing SMEs. Future research should investigate using secondary data drawn from publicly available information and annual reports, according to our recommendation.
Finally, our research focuses solely on manufacturing SMEs in a single province. This could create cultural and industrial barriers, limiting the generalizability of our findings. Researchers may investigate duplicating our study in different backgrounds and circumstances to check our hypotheses, even though we assume that organizations in other nations and industries may come up with similar results.
6. Conclusions
This study aimed to investigate the role of GHRM practices, i.e., GRS, GT, and GPR on GP through the intervening roles of GWC, GWE, and GEB. The findings of the study provide realistic insights concerning the dire need for ensuring a sustainable environment through the implementation of GHRM practices to enhance GP. However, it is essential to understand that GHRM practices may not directly enhance GP; it is instead a series of sequential paths involving significant contemporary variables that aid increasing GP. Thus, the findings reveal that GHRM practices help in providing a GWC and enable GWE of employees. When GWC and GWE are ensured, it ultimately enables GEB and enhances GP. Surprisingly, individual green values have been found to significantly moderate the relationship between GWC and GEB. Second, by looking at IGV as an underlying mechanism explaining the connection between GWC and GEB, this research aims to add to the emergent body of literature on GHRM.
This paper presents some key research contributions to deepen the understanding of GHRM practices. First, the study establishes a unique conceptual framework connecting GHRM practices with GP by empirically supporting the sequential mediation and moderation model. Second, by taking into account GWE, GEB, and GWE in the model, the study aims to enhance the scarce GHRM literature by determining the circumstances that may strengthen the association between GHRM and GP. Third, this study looks at individual green values as an underlying mechanism explaining the association between GWC and GEB in an attempt to add to the emerging literature on GHRM. Last, this study provides unique and realistic insights for managers, practitioners, and policymakers to switch from traditional to contemporary GHRM practices and ensure GP for the betterment of society as a whole. Hence, organizations must ensure the adoption of GHRM practices and encourage the development of GWC to enable GEB and GWE among employees in line with the organizational green goals to successfully achieve EP.