Companies Could Benefit When They Focus on Employee Wellbeing and the Environment: A Systematic Review of Sustainable Human Resource Management

Abstract

Purpose: We reviewed the scholarly literature that examines the role of sustainable practices for employee health and the environment. The study also examined the negative impact of the workplace on the wellbeing of employees and its indirect effect on Sustainable Development Goals (SDGs). Design/methodology/approach: This was a literature review with data from the Scopus scholarly database. We found 65 results from 2008 to 2022. After eliminating duplicates and other search fields, we were left with 30 final documents. Findings: The study provided evidence that sustainable practices in the workplace increase the wellbeing of employees and reduce pollution in the environment, while also benefiting company viability. Research limitations/implications: Using other database sources besides Scopus and Web of Science could yield additional results. Practical implications: The study highlighted the need for organizations to develop sustainable HRM practices to minimize the negative effects on employee wellbeing and capitalize on the savings that are generated through sustainable initiatives. This finding could contribute to better corporate practices and the further development of research in this field. Originality/value: The HRM literature revealed the importance of having employee wellbeing practices which increase work productivity and engagement. This also empirically proved the positive impact of companies that implement sustainable HRM practices. This research provided a theoretical model that depicts the interrelation between corporate viability, employee wellbeing, and sustainable human resource management.

1. Introduction

With the increasing pollution in the world and the negative effects of climate change, the study of sustainability and wellbeing has drawn increasing attention in recent years. In 1987, the United Nations adopted the term “sustainability” to denote meeting the needs of the present without compromising the needs of the future; nevertheless, unmeasured consumption and destructive corporate practices have led to 6.8 deaths per year due to air pollution [1]. In order to address the urgency of these changes in the environment, the United Nations developed 17 Sustainable Development Goals (SDGs) [2]. For instance, Goal 3 “excellent health and well-being” encourages access to health services and endeavors to reduce illnesses from pollution. Similarly, we can consider Goal 11, “sustainable cities and communities”, which aims to decrease by 75% the greenhouse gas emissions generated by cities [3,4].

The Organization for Economic and Cooperation Development (OECD) releases the “How’s Life” report every two years [5], which provides a country-by-country account of national wellbeing level indicators. Their most recent report emphasized that while OECD countries typically perform reasonably well, most of these nations could still take further steps to enhance the general population’s wellbeing.

An area of research that crosses many disciplines, including economics, industrial and organizational psychology, anthropology, and sociology, is the study of wellbeing at work. As a result, it might be difficult to conceptualize precisely what is meant by wellbeing; to illustrate, the OECD has 11 areas, focused on (1) wellbeing, (2) income and wealth, (3) job and work quality, (4) housing, (5) health, (6) knowledge and skills, (7) environmental quality, (8) safety, (9) work–life balance, (10) social connections, and (11) civil engagement. Furthermore, while it is widely acknowledged that having a job improves one’s physical and mental health compared to being unemployed [6], the connection between work and wellbeing is far from clear-cut, with poor employee satisfaction being a major cause of absences from the workplace.

On the other hand, as a developing field, sustainable human resource management (sustainable HRM) enables companies to raise employee standards of living in order to promote societal sustainability. However, when it comes to some high-performance work systems (HPWPs), the negative impact of work on employee health hinders their professional development and personal growth [7].

SDGs such as SDG 3 (good health and wellbeing), SDG 5 (gender equality), SDG 8 (decent work and economic growth), and SDG 13 (climate action) support sustainable HRM. In particular, SDG 5 establishes and encourages opportunities for lifelong equity learning to achieve gender equality. SDG 8 strives to foster full and productive employment; sustained, inclusive, and sustainable economic growth; and decent work for everyone, including adequate workplace training, non-discrimination in hiring, fair and non-discriminatory pay, and flexible work schedules that promote job stability and allow for an adequate work–life balance. SDG 11 (sustainable cities and communities) seeks to reduce pollution by promoting socially responsible labor practices in cities.

2. Method

The review and conceptual analysis involved two main steps: first, we created a database by conducting an extensive and methodical search to find and extract all pertinent literature about sustainable human resource management and employee wellbeing that had been published in the field’s peer-reviewed academic journals. The results of a content analysis were then reported, with a focus on the United Nation’s SDGs.

To discover the major research papers dealing with sustainable HRM and wellbeing, we comprehensively searched for articles in significant journals in the fields of HRM, organizational behavior, sustainability, management, personnel behavior, and wellbeing. The results from several topic search queries in Scopus with the most recent update on 1 November 2022 were combined to create the input data for the review. The primary information source was a database search on Google Scholar and Scopus online. To find the papers, sustainable HRM scholars examined a preliminary set of search terms. Five search terms and their variations were used, including: (1) Sustainable Human Resource Management and Wellbeing, (2) Wellbeing HRM and Sustainable, (3) Wellbeing and Human Capital and Sustainable, (4) Human Capital and Sustainable, (5) Wellbeing Human Resource Management and Sustainability.

This procedure resulted in 65 hits on Scopus, or 56 papers after we eliminated duplicates. We then identified the articles from the specific fields of sustainable HRM and wellbeing in business and management, removing those from other fields besides HRM, resulting on 30 final documents (Appendix A).

The article entitled “The new dimensions of collaboration: Mega and intelligent communities, ICT and wellbeing” described the relationships between human capital, wellbeing, and the environment, explaining them as drivers of a high-level growth in mega communities [8]. This topic is a recent development, but authors have begun to produce more publications related to sustainable HRM and wellbeing, and the subject is staring to generate public interest (see Figure 1). With 91 citations, we next address the paper “A review of limitations of GDP and alternative indices to monitor human wellbeing and to manage eco-system functionality” by Giannetti, which introduced the possible indicators of wellbeing [9].

In total, the authors in our findings had published only one paper related to sustainability: “Assessing local-scale inclusive wealth: a case study of Sado Island, Japan”. Nonetheless, the journal review presented a different context with significantly more publications related to sustainable HRM and wellbeing. Specifically, the journal Sustainability presented 7 papers, including “Human Capital Sustainability Leadership to promote sustainable development and healthy organizations: A new scale” [10]. Next, we found that the Asia-Pacific Journal of Business Administration yielded 2 papers, including one of the most cited papers in sustainable HRM research: “The synthesis effect of high performance work systems on organizational performance and employee harm” [11]. Additionally, we found that the Contemporary Studies in Economic and Financial Analysis journal, the International Journal of Environmental Research and Public Health, the Journal of Cleaner Production, the Problems and Perspectives in Management journal, and Social Sciences yielded 2 papers each, which, compared with other fields, was a relatively low number (see

Table 1. Main journals with sustainable HRM and wellbeing studies.

Journal	Number of Papers
Sustainability (Switzerland)	7
Asia-Pacific Journal of Business Administration	2
Contemporary Studies in Economic and Financial Analysis	2
International Journal of Environmental Research and Public Health	2
Journal of Cleaner Production	2
Problems and Perspectives in Management	2
Social Sciences	2
Advances in Intelligent Systems and Computing	1
BMC Health Services Research	1

).

In this research, we did not find many different countries with relevant publications; the lack of papers per country was noticeable when compared with other fields (see Figure 2).

We observed that there were 13 main universities around the world that focused on sustainable HRM and wellbeing, including the Institut National de la Recherche and the University Pau et de Pays. The main contributor was the University of Bari, which produced four papers in this field (see Figure 3).

The most cited papers in sustainable HRM and wellbeing field are in

Table 2. Most cited papers in sustainable HRM and wellbeing field.

Authors	Title	Year	Cited by
Giannetti B.F., Agostinho F., Almeida C.M.V.B., and Huisingh D. [9]	A review of limitations of GDP and alternative indices to monitor human wellbeing and to manage eco-system functionality	2015	91
Di Fabio A. and Peiró J.M. [10]	Human capital sustainability leadership to promote sustainable development and healthy organizations: A new scale	2018	87
Mariappanadar S. and Kramar R. [11]	Sustainable HRM: The synthesis effect of high-performance work systems on organisational performance and employee harm	2014	37
Manuti A., Giancaspro M.L., Molino M., Ingusci E., Russo V., Signore F., Zito M., and Cortese C.G. [12]	“Everything will be fine”: A study on the relationship between employees’ perception of sustainable HRM practices and positive organizational behavior during COVID19	2020	18
Passerini K. and Wu D. [8]	The new dimensions of collaboration: Mega and intelligent communities, ICT and wellbeing	2008	15
Tordera N., Peiró J.M., Ayala Y., Villajos E. and Truxillo D. [13]	The lagged influence of organizations’ human resources practices on employees’ career sustainability: The moderating role of age	2020	13
Hussain K., Abbas Z., Gulzar S., Jibril A.B., and Hussain A. [14]	Examining the impact of abusive supervision on employees’ psychological wellbeing and turnover intention: The mediating role of intrinsic motivation	2020	13
Malik F., McKie L., Beattie R. and Hogg G. [15]	A toolkit to support human resource practice	2010	11
McCalman J., Campbell S., Jongen C., Langham E., Pearson K., Fagan R., Mar-tin-Sardesai A. and Bainbridge R. [16]	Working well: A systematic scoping review of the Indigenous primary healthcare workforce development literature	2019	10
Smaliukiene R. and Bekesiene S. [17]	Towards sustainable human resources: How generational differences impact subjective wellbeing in the military?	2020	9
Muñoz-Pascual L. and Galende J. [18]	Ambidextrous relationships and social capability as employee well-being: The secret sauce for research and development and sustainable innovation performance	2020	8
Jaskeviciute V., Stankeviciene A., Diskiene D. and Savicke J. [19]	The relationship between employee well-being and organizational trust in the context of sustainable human resource management	2021	7

.

3. Findings

This research tackled growing worries that long-term wellbeing is being harmed by the global destruction of nature by traditional practices. We systematically investigated the relationship between human capital and sustainable development as shown by an improvement in the United Nations’ inclusive wealth indicator. In recent years, many scholars have considered human assets as fundamental to achieving not only economic goals, but also sustainable goals [20]. The health and wellness of the workforce are therefore more important than ever. Sustainable HRM practices must link organizational sustainability with human resource management that focusses on developing healthy and resilient employees to create strong and sustainable practices in organizations.

The importance of sustainable HRM practices and wellbeing relies on solving the SDGs that are essential to addressing the main challenges the world is currently facing. Hence, it is imperative that organizations consider human capital development as a competitive advantage [21], since employees are undoubtedly the main asset of each company.

In 2019, 9 million premature deaths were related to pollution [22], and companies are considered the main polluters [23]. In accordance with the United Nations, we must act with urgency against negative environmental impacts. SDG 13 primarily focuses on climate action, enhancing climate change education and awareness raising. There is a growing trend of companies focusing on the triple bottom line, with sustainability not only involving the financial performance of the company but also being enhanced by aiding the environment and society. This shared value creation addresses SDG 3 (good health and wellbeing), SDG 5 (gender equality), SDG 8 (decent work and economic growth), SDG 11 (sustainable cities).

By reviewing all the literature related to sustainable HRM practices, we could observe how everything is interconnected. As systems theory explains [24], one element impacts the others; in the case of sustainable HRM practices, employees´ increased consciousness of the environment leads to increased actions by the company to improve the climate, which ultimately also benefits the employees, generating shared value. This beneficial cycle is explained in the following CV–EW–SHRM model (see Figure 4).

4. Sustainable HRM Practices and Their Influence on Wellbeing

International studies have revealed that initiatives to enhance healthcare delivery can succeed or fail depending on how employers address worker concerns via motivation, leadership, and support [25]. Practices involving the suitable modification of HRM strategies and techniques enable them to fulfil the organization’s long-term financial, ecological, and social goals while managing negative feedback and unforeseen side effects. Sustainable leadership involves emphasizing human resources; considering their growth, development, and health; and safeguarding the relationship between leaders and followers, organizations, and sustainability. This strategy can encourage positive and profitable development processes for people and businesses from a primary preventive perspective to address the difficulties of authentic and sustainable human resource development [10]. Besides sustainable leadership, sustainable HRM processes, including selection, foster a sustainable culture through the relationship between quality management practices and plant competitiveness. The influence of sustainable methods on plant competitiveness is fundamental to achieving green environments at work.

Employees need fair compensation, as established by SDG 4 (decent work); many countries have set minimum wages, whose goal is to ensure that workers have enough money to meet their fundamental needs [26]. However, it has been claimed that minimum wages are insufficient to increase employee satisfaction. Fair compensation involves more than compliance with the law. In an employment relationship, compensation is defined as “all forms of cash returns and tangible services and benefits employees receive” [27]. Financial returns include a person’s base pay and immediate and long-term incentives. Benefits, including insurance, paid sick days and vacation time, pension schemes, and employee discounts, are considered “tangible services and benefits”; these incentives are not offered in many jobs, and the law exempts corporations from providing them. Still, job satisfaction and wellbeing are related to fair compensation. The UN’s SDG 8 promotes sustained, inclusive, and sustainable economic growth and decent work.

5. Indicators to Monitor Human Wellbeing and to Manage Sustainable HRM Environments

Companies must provide stakeholders with pertinent, timely, and understandable information about their operations through corporate reports and indicators. By providing this information, companies fulfil their commitments under the ethics of responsibility and create sustainable policies that allow the flourishment of employees and their wellbeing. Peter Drucker stated that you cannot improve what you do not measure [28]. Indicators allow us to understand any opportunity area and enhance results, claims, etc.

Sustainability involves implementing practices that promote the economy, a better society, and a better environment. The assumption that economic expansion is always synonymous with an improved quality of life leads to the misuse of the gross domestic product (GDP) as a measure of public wellbeing. Nonetheless, wellbeing must be measured with indicators besides the GDP to ensure employees’ health, security, and job satisfaction. Job satisfaction is one of the measures of employee wellness and a critical organizational indicator [29]. It varies depending on specific factors and the nature of the work, for example, the type and quantity of compensation, promotions, coworkers, and the organizational context [30]. Indicators such as gender equality in companies (SDG5) or wellbeing indicators are a necessity that helps companies achieve a positive influence on employees and the environment.

6. Stakeholders as a Driver for Sustainable HRM

In recent years, stakeholders have been putting pressure on companies to take responsibility for the externalities they cause in the environment and society. Stakeholders have a direct influence on and immediate interest in a company’s performance [31], as stakeholders have claims, properties, and rights related to the company [32], representing an opportunity to develop sustainable practices centered on employee wellbeing and a possible effective way to address business needs. Numerous articles have accepted a link between HR procedures and employee wellbeing. However, the majority have argued that it is far from evident. For instance, it is acknowledged that job quality matters [4]. Still, there are significant knowledge gaps regarding what qualifies as high-quality work concerning wellbeing and how that may differ between individuals and across organizational contexts.

Additionally, we need to understand the nature of the linkages between crucial human and organizational traits, interventions, and wellbeing outcomes for people and their employers [33]. Employees are fundamental to achieving economic growth [20] and increasing sustainability through a sustainable HRM policy in companies. However, companies are not taking enough responsibility for the labor conditions that affect the wellbeing of employees and the environment.

Despite the importance of human assets, other types of stakeholders, such as customers, have transcended the realm of a specific niche [34] and are engaged in sustainability and conscious of the environmental difficulties and the societal issues addressed by the UN SDGs [35]. Sustainability labeling empowers customers to make sustainable consumption decisions because of their awareness of a company’s externalities, which calls for new regulations for firms to serve as change agents [36]. Still, customers demand more than a label and have focused on fair and sustainable labor. According to [37], stakeholders’ perceptions of the impact of sustainability significantly influence organizational policies, sustainability, and accounting reports. Hence, consumers require sustainability reports and new labor policies for companies with unfair labor conditions.

Stakeholders demand that socially responsible actors establish environmental, social, and governance (ESG) actions that promote shared value, because they are aware of collective impact. Social problems arise and persist because of a complex combination of activities and omissions by corporations, governments, and society. Our literature review found that many factors affect consumer acceptance, such as perceptions of a company’s sustainability, proximity to the source of the product, and waste aversion.

7. Conclusions

This paper revealed increasing interest and diverse outlets, demonstrating the complexity and diversity of the wellbeing in sustainable HRM field concerning the UN’s SDGs. The idea of wellbeing and its connection to the SDGs of the UN provide a way to create sustainable directions. Most studies from our review of the literature concentrated on distinct, prominent issues while ignoring the connections between wellbeing, sustainable HRM, and SDGs. We observed how researchers approached the sustainability–SDGs link to address complex interconnected challenges. Still, these factors have drifted apart over time, and businesses do not consider how they can contribute most effectively to addressing the UN’s SDG challenges. The key stakeholders’ roles, such as customers, industries, and employee policy frameworks, are more nuanced and complex than the simple dominance of economic and environmental interests. The company’s role in influencing wellbeing and a healthy environment is crucial in achieving the SDGs. Additional studies and analyses are required to explore the expectations of important stakeholders and actors for each SDG in the context of wellbeing and HRM.