Sustainable Human Resource Management Practices, Employee Resilience, and Employee Outcomes: Toward Common Good Values
Sustainable Human Resource Management Practices, Employee Resilience, and Employee Outcomes: Toward Common Good Values
o N G N Wimalasiri - 2024119904
o Chammi Ishara - 2024119953
o S V D K Dinithi - 2024119956
. INTRODUCTION
The growing worldwide awareness of sustainable development has made the sustainable components of human resource
management (HRM) more crucial for organisations (Cooke & He, 2010; Ren et al., 2020). Consequently, Research on
sustainable HRM (SHRM), which links HRM practices to corporate sustainability, has been more important in the
area of research in HRM (Bush, 2020; Ehrent et al., 2016).
This study focuses on the most recent approach to SHRM practices based on common good values (CGVs).
SHRM practices based on CGVs (SHRM- CGV) :
Refer HRM practices that support firms and their employees in addressing the grand challenges in the world.
The United Nations (UN) refer to these as the sustainable development goals (SDGs) to end poverty, protect the planet,
and ensure prosperity for all (George et al., 2016; Stahl et al., 2020).
Several SDGs are directly relevant to HRM, such as SDG 3 “Good Health and Wellbeing,” SDG 5 “Gender Equality,”
SDG 8 “Decent Work and Economic Growth,” SDG 10 “Reduced Inequalities,” and SDG 12 “Responsible
Consumption and Production” (George et al., 2016).
There is a lack of theorization and empirical evidence on whether and how the adoption of SHRM-CGV will lead to
both employee well-being and performance (Stahl et al., 2020).
The SHRM-CGV emphasizes values such as dignity, solidarity, and reciprocity within all areas of HRM policies
and procedures and introduces HRM practices based on such values (Hollensbe et al., 2014).
Personal Resources :
Describe within the control of individual employees
(e.g., competence and resilience)
Research Gap
This study focuses on employee resilience, a key personal resource. Tonkin et al., 2018 suggest that
resilient employees experience lower levels of psychological distress as they can quickly adapt to adversity.
Therefore, employee resilience is a crucial resource for individuals and organizations to develop well-being
However, research on resilience in an organizational context remains limited, and most literature on resilience
unable to explain how employee resilience can be developed (Cooper et al., 2019). To fill this research gap,
this study investigated the role of SHRM-CGV in the development of employee resilience, which further affects
Work Engagement
Work engagement is a state of work-related subjective well-being that has important implications
for both organizations and employees. However , recent study by Gallup (2021) found that 85%
of employees are not engaged at work; this costs the global economy $7 trillion in lost productivity .
DEFINING KEY CONCEPTS
SHRM Practices
Based on the emphasis placed on different internal and external outcomes , there are three main SHRM types
have been identified in the literature, (Aust et al., 2020; Kramar, 2014).
Socially Responsible HRM
Focuses on human and social purposes and contributes to sustainable organization. This type of SHRM aims to
create social values (e.g., enhanced organizational social reputation)
Green HRM
Focuses on the economic and environmental outcomes with aims to create ecological value by promoting environmentally
friendly policies and practices, such as green recruitment (e.g., virtual interviews), green awareness training, and green rewards
Triple Bottom Line HRM
Aims to help firms create “win-win-win” situations or achieve the triple bottom line of people, planet, and profit (Ethnert et al.,
2016)
These three types of SHRM based on an “inside-out “perspective, which denotes that the focus is on the business itself (Dyllick
& Muff, 2016).
The SHRM-CGV approach based on the “outside-in” perspective differs from all three traditional types of HRM. It define the
purpose of a business as “making a positive contribution to overcome sustainability issues and thus serving the common good”
(Dyllick & Muff, 2016, p. 166).
Ability (A) – Motivation (M) – Opportunity (O) logic - The AMO model
In this study three bundles of SHRM-CGV: the ability bundle, the motivation bundle, and the opportunity bundle,
are examined.
Increases employee commitment and motivation to take sustainable courses of action through contingent rewards.
Resilience was initially discussed as an individual trait that is relatively stable and dispositional (Block, 1961; Wagnild
& Young, 1993). Luthans and colleagues found that resilience a component of positive psychological capital (PsyCap).
Among all the four aspects of PsyCap, resilience is defined as “the positive psychological capacity to rebound,
to ‘bounce back’ from adversity, uncertainty, conflict, failure or even positive change, progress, and increased
responsibility” (Luthans, 2002a) and is “the most important positive resource to navigating a turbulent and
stressful workplace” (Avey et al., 2009).
Therefore, organizations need to adopt a more proactive HRM approach to develop their employees' resilience
and help them recover from adversity or personal setbacks when they occur (Avey et al., 2009;
THEORY AND HYPOTHESES
The examination of the relationships among SHRM-CGV, resilience, work engagement, and employee
performance are underpinned based on the JD-R model, where SHRM practices are regarded as critical
organization-level workplace resources for employees, and resilience is viewed as an important personal
resource (Demerouti et al., 2001).
In the following sections, the relationships between SHRM-CGV and employee resilience, and employee
engagement and performance, are theorized from a multilevel perspective.
SHRM-CGV and employee resilience
From the perspective of positive psychology (Luthans, 2002a; Luthans et al., 2006) and the JD-R model
(Demerouti et al., 2001), this study argues that SHRM-CGV (as firm-level workplace resources) plays a
critical role in enhancing the resilience of employees, which is an important personal resource.
Accordingly, SHRM-CGV provides employees with opportunities for sustainability training and
development, involves employees in decision-making, promotes diversity and equity in the workplace,
encourages ethical and sustainable behaviors, and improves employee well-being (Kramar, 2014).
Resilience can be developed and enhanced by reducing risks and increasing personal assets (Luthans et
al., 2006). First, organizations should proactively reduce the potential for adverse events by creating an
ethical and trustworthy organizational culture that prevents internal lapses such as ethical crises, sexual
harassment, workplace discrimination, and employee misconduct (Luthans et al., 2006).
SHRM-CGV facilitates the development of a strong ethical and trustworthy culture through the inclusion
of recruitment and selection of employees with high levels of moral standards and leadership programs,
and extensive training on ethical issues (practices in the ability bundle).
It uses behavior-based performance evaluations instead of outcome-based ones, promotes awards for
moral behavior (practices in the motivation bundle), and implements of fair career mechanisms and
diversity management (practices in the opportunity bundle).
SHRM-CGV contributes to building human and social capital in the workplace, which is critical for
developing employee resilience.
It should be noted that according to the AMO model, the ability, motivation, and opportunity bundles are
mutually reinforced and the influence of HRM practices is best understood by investigating the effect of
the HRM system as a whole instead of examining the isolating effects of separate bundles (Ho & Kuvaas,
2020)
Hypothesis 1: SHRM-CGV has a positive effect on employee resilience.
SHRM-CGV–resilience–work engagement
According to the JD-R model, the presence of job resources triggers a motivational process (both extrinsic and
intrinsic), leading to high levels of engagement (Bakker & Demerouti, 2007).
As an important internal resource, resilience allows individuals to positively appraise their ability to meet job
demands and believe that they can satisfy their needs by engaging fully in their organizational goals. It also
enables individuals to effectively manage the negative influences of job demands and challenges to prevent
burnout, which is the negative antipode of engagement (Schaufeli & Bakker, 2004).
When employees have a high level of resilience, they can preserve resources (e.g., time, energy, and positive
emotions) and possess additional resources (Chen, 2018). This is because resilient people are open to new
experiences and flexible to changing conditions, enabling them to learn from experiences, challenges, and
hardships to develop themselves better.
Consistent with the JD-R model, we argue that SHRM-CGV, as external job resources, affects employees' well-
being by developing personal resources. We focus on examining employee resilience as a crucial personal
resource that mediates the relationship between SHRM-CGV and work engagement.
Hypothesis 3: Employee resilience mediates the positive relationship between the SHRM-CGV and work
engagement.
Linking resilience and employee performance: Mediating role of
engagement
Empirical studies have provided evidence of a positive relationship between work engagement and employee
performance. Based on a cross-sector study of a sample of 144 employees across various sectors in the United
States, Bakker et al. (2012) reveal that work engagement is positively related to in-role and contextual (i.e.,
organizational citizenship behavior) performance.
Hypothesis 4: Work engagement has a positive effect on employee performance.
Based on the theoretical analyses and empirical findings, we propose that work engagement is a conduit between
employee resilience and job performance.
Hypothesis 5: Work engagement mediates the positive relationship between employee resilience and in-role
performance.
Accordingly, we expect that employees experiencing SHRM-CGV will achieve higher levels of performance. Thus,
we propose employee resilience and work engagement as the underlying mechanisms through which SHRM-CGV
improves employee performance, leading to the following hypothesis:
Hypothesis 6: SHRM-CGV has a positive indirect effect on employee in-role performance through employee
resilience and work engagement serially.
METHODS
Data for this study were collected using online questionnaire surveys conducted in 96 firms in China across
several industries (e.g., manufacturing, mining, and banking and finance) from December 2020 to May 2021.
China's predominant work values stress on hard work and endurance, and employees are increasingly exposed
to stressful work situations.
To address the social and environmental challenges, the Chinese government has strengthened its
environmental regulations and social responsibility reporting policies in recent years (Marquis & Qian, 2014;
Zhang et al., 2019).
It was utilized well established and validated scales from the literature.
The questionnaires were designed by the research team in English, translated into Chinese, and then back-
translated into English following the back-translation procedure suggested by Brislin (1980) to ensure the
equivalency of the questionnaires.
During this process, it was ensured that the questions were simple and concise, and ambiguous, vague, and
unfamiliar concepts were avoided.
A multisource strategy was adopted. We designed two sets of questionnaires for the executives and employees.
Organization-level information, such as SHRMCGV, was answered by the chief HR director of each firm and at
least one other senior executive (e.g., general or associate general manager).
Employees reported individual-level variables, including resilience, work engagement, and performance.
The two levels of data were collected at two time points (T1 and T2), with at least a two week time lag between
the organization-level and individual-level surveys, constituting a two-level dataset, given that employees are
nested within companies.
To increase the response rate, participating firms could opt to receive the final research report on how to improve
the financial, social, and environmental performance of their organizations in a turbulent business environment.
it was obtained paired survey questionnaires from 96 firms, among which 72.90% had fewer than 300
employees, 16.70% had 300 to 1000 workers, and 10.40% had more than 1000 employees. Most firms were
in the manufacturing industry (49%) and the energy and mining sector (28.10%).
It has obtained 1277 usable questionnaires from employees after removing 57 of those with more than 25%
missing values (Dong & Peng, 2013; Graham, 2009).
Among these respondents, 57.90% were male and 42.10% were female; the average age was 36.40 years,
and the average tenure was 4.90 years.
Approximately 45.30% of the respondents had a college degree or higher, and more than half worked in the
production department (57.40%).
the final sample for the present study consists of 96 firms, including 278 executives and 1277 employees.
On average, 3 executives and 13 employees from each firm participated in the survey.
To prepare data for the multilevel analyses, they have created a dataset that contained both executive data
(firm-level) and employee data (individual-level) by merging the executive and employee survey datasets
such that every employee data is connected to the executive data aggregated using SPSS.
MEASURES
All variables were measured using a Likert-type response scale.
SHRM-CGV
It was measured SHRM-CGV using a 22-item instrument adapted from the scale developed by Guerci et al.
(2015) and Guerci et al. (2019), which was based on the AMO perspective (Appendix).
All items refer to SHRM-CGV and are highly relevant to SDG 3 “Good Health and Wellbeing,” SDG 5
“Gender Equality,” SDG 8 “Decent Work and Economic Growth,” SDG 10 “Reduced Inequalities,” and SDG
12 “Responsible Consumption and Production.”
Following Kostopoulos et al. (2015), the HR manager and at least one senior executive from each firm were
asked to rate the extent to which their firms implemented a set of carefully designed SHRM practices using a 5-
point Likert-type scale (1 = “never” and 5 = “always”).
It was used the simple average of the ratings to measure a firm's intended SHRM-CGV. All items loaded on one
factor, constituting a first-order construct. The Cronbach's alpha coefficient for the measure was 0.97.
Employee resilience
It was measured employee resilience using the 3-item resilience subscale of the PsyCap instrument developed
by Luthans et al. (2007).
Employees rated the three items on a 5-point Likert scale (1 = “strongly disagree” to 5 = “strongly agree”).
A sample item was, “I usually take stressful things at work in stride.” All the items were loaded onto one factor.
The Cronbach's alpha coefficient was 0.90.
Work engagement
Work engagement was measured using the 9-item version of the Utrecht Work Engagement Scale, which
was developed by Schaufeli, Bakker, and Salanova (2006), and examined three aspects of engagement,
namely vigor, dedication, and absorption.
Employees rated these items on a 7-point Likert scale ranging from 0 (never) to 6 (always). An example
item was “I am immersed in my work.” The Cronbach's alpha for the scale was 0.96.
Employee (in-role) performance
Employee performance was mesured using the 7-item in-role performance scale developed by Williams
and Anderson (1991).
Employees rated their own performance for each item on a 5-point Likert scale ranging from 1 =
“strongly disagree” to 5 = “strongly agree.” The Cronbach's alpha coefficient of this scale was 0.94.
Control variables
They controlled for several variables that might confound the focal relationships under study to avoid
possible erroneous estimations. Existing research indicates that these variables are related to employee
work engagement and performance (Boselie et al., 2005).
Accordingly, at the individual level, it was controlled for an employee's years of service (number of years
worked for the company), tenure (number of years in the current position), and age (Boselie et al., 2005;
Kim & Kang, 2017; Liu et al., 2017).
At the organizational level, it was controlled for firm ownership (coded as 1 = “state-owned,” 2 =
“privateowned,” and 3 = “foreign-invested”) and firm age (Boselieet al., 2005; Liu et al., 2017; Ren et al.,
2022).
Data analysis
This study adopts the multilevel structural equation modeling (MSEM) approach to analyze data with a nested
structure.
The hypothesized model adopted a 2-1-1-1 multilevel mediation design with two mediators to explore the complex
underlying mechanisms that translate macro-level HRM intervention into individual employee performance.
In this study, SHRM-CGV is conceptualized as a firm-level predictor that influences individual employee performance
through the mediation of employee resilience and work engagement at the individual level.
This study includes 1277 individual observations at the individual level and 96 firms at the organization level, and the
mean number of responses at the individual level was 13.30, demonstrating a sufficient sample size for multilevel
modeling (Kreft & de Leeuw, 1998; Shen, 2016).
Missing values were imputed using the expectation– maximization technique, which is less biased than other methods
(Graham, 2009). All analyses were performed using Mplus 8.3 (Muthén & Muthén, 2012). As multilevel modeling has
no standard cut-offs for fit indices (Shen, 2016), we adopted multiple model fit indices for single-level structural
equation modeling to test the model fit, including chi-square statistics,
The Tucker–Lewis coefficient (TLI), the comparative fit index (CFI), the root mean square error of approximation
(RMSEA), and the between-level and within-level standardized root mean square residual (SRMR). The criteria of
goodness-of-fit indices used to assess the model fit include TLI and CFI with values higher than 0.90; RMSEA is
acceptable up to 0.08; SRMR is acceptable when the value is less than 0.10 (Bollen, 1989; Hair et al., 1992; Hu &
Bentler, 1998).
Multilevel confirmatory factor analyses and validation of the measurement
model
assessed the proportion of variance in the mediator and outcome variables that resided among individual employees by
calculating intraclass correlation coefficients (ICC (1), ICC (2), and rwg(j)).
The inter-rater reliability and agreement scores showed a high proportion of variance due to cluster variability in terms
of resilience (mean rwg(j) = 0.88; ICC: ICC1 = 0.18, ICC2 = 0.80), engagement (mean rwg(j) = 0.68, ICC1 = 0.23,
ICC2 = 0.84), and in-role performance (mean rwg(j) = 0.95, ICC1 = 0.22, ICC2 = 0.84).
ICC (1) usually range from 0.00 to 0.50. For assessing the reliability of group-level means, values of ICC (2) higher
than 0.75 are excellent. Although the multi-item rwg(j) value for work engagement in our study was slightly lower than
the widely applied cut-off point of 0.70, it still reflected moderate agreement because the value was much higher than
0.50 (LeBreton & Senter, 2008).
Therefore, substantial amounts of variance in employee resilience, work engagement, and in-role performance were
explained by firm-level factors, indicating the adequacy of adopting the MSEM approach, which partitions the variance
of individual-level variables into within-firm variance and between-firm variance.
RESULTS
Based on our hypothesized model, we first fitted a fully mediated, multilevel model, assuming that the cross-
level effect of SHRM-CGV as an integrated bundle on employee performance was fully mediated by employee
resilience and work engagement, and that work engagement fully mediated the resilience-performance
relationship at both levels. This full mediation model yielded good fit indices:
χ²(905) = 2042.65, p < 0.001
Comparative Fit Index (CFI) = 0.95
Tucker-Lewis Index (TLI) = 0.94
Root Mean Square Error of Approximation (RMSEA) = 0.03
Standardized Root Mean Square Residual (SRMR):
Within-level = 0.07
Between-level = 0.09
Hypothesis Testing Results:
To obtain a better understanding of the mediation mechanism between HRM and employee
performance, apart from the full mediation model, we fitted several partial mediation models at the
firm level, assuming that, for example, employee resilience partially mediates the HRM-engagement
relationship, or employee resilience and work engagement partially mediate the HRM-performance
relationship.
As illustrated in Table 3, in these partial mediation models, the direct paths from SHRM-CGV to
work engagement and performance were not statistically significant. Given that the serial mediation
chain from SHRM-CGV to employee performance via employee resilience and work engagement is
of great interest to this study, we retained the full mediation model as the preferred model.
Supplementary Test
HRM practices within every single bundle may also impact the development of employee resilience, as each
bundle of practices could either help increase personal assets or reduce risks (Subramony, 2009)
The ability bundle contains HRM practices primarily related to staffing and training that focus on increasing the
individual and collective knowledge, ability, and skill levels of the workforce to behave and perform ethically,
responsibly, and sustainably. These practices will increase employees' access to knowledge, skills, and abilities,
which allows them to feel confident and resilient because of enhanced human capital (Chen, 2018)
The motivation bundle plays an important role in developing a strong ethical culture that deters internal lapses
such as ethical crises, sexual harassment, and employee misconduct, which may cause those involved to face
adverse events (Luthans et al., 2006)
The opportunity bundle aims to empower employees to make decisions through job design; facilitate employee
participation and voice using upward feedback mechanisms; and improve employee well-being via work-life
balance practices, employee assistance programs (EAPs), diversity management, and inclusive practices (Guerci
et al., 2015; Subramony, 2009)
Additional multilevel analyses
To dig deeper into our data and better understand how specific SHRM-CGV dimensions such as ability,
motivation, and opportunity bundles contribute to employee resilience, engagement, and in-role performance,
we followed Fu et al. (2017) and conducted additional multilevel analyses, viewing SHRM-CGV as a second-
order construct with three first-order factors
Theoretical implications
This study brings the perspectives of HRM and organizational behavior to identify how HRM
interventions might lead to positive psychological states and enhanced employee engagement.
The finding that employee resilience acts as a mediator of the cross-level relationships between SHRM-
CGV and individual outcomes contributes to the HRM literature (Aust et al., 2020; Jiang et al., 2013)
Results confirm the superiority of SHRM-CGV in workplace management in the Chinese context, which
has been lagging in terms of prevailing social norms toward the embracement of progressive HRM
practices
Theory development directions for future SHRM research
Finding of the cross-level serial mediation demonstrates a potential need for further investigation into
the contingent factors for a better understanding of the “SHRM-outcomes” relationship.
We should be cautious that shifting the focus of HRM practices from a strategic approach to a
sustainable approach does not mean that we should abandon the strategic HRM approach (Guest,
2017), since within the current economic system, it is more realistic for firms to adopt both strategic
and SHRM practices (Aust et al., 2020).
In practice, the effects of different sets of HRM practices may be contingent on each other (Jiang et al.,
2012). Future studies could examine the interplay between strategic and SHRM practices and their
subsequent influence on employee well-being and performance.
Practical Implications
The findings support the need to adopt a SHRM approach to managing people. Our results indicate that employees will
develop more personal resources when organizations invest in and show their care toward employees by implementing
SHRM-CGV, which, in turn, could increase the probability of obtaining desirable work engagement and performance
By unpacking the process of how employee resilience may lead to enhanced employee well-being and performance,
our study suggests the importance of fostering work engagement, which can be achieved by offering interventions
aimed at increasing workplace and personal resources
The study helps organizations identify ways to develop and support a resilient workforce. To remain viable,
organizations must respond quickly to the dynamic and uncertain environment due to resource scarcity, technological
advancements, changes in government policies, and pressures from diverse stakeholders (Benn et al., 2018)
Results on the effect of each of the three HRM bundles on resilience and consequently employee outcomes have
implications for small- and medium-sized enterprises (SMEs). Owing to the lack of resources (e.g., money and time),
SMEs are constrained from implementing the entire set of SHRM-CGV. However, they can consider adopting some
aspects of the ability, motivation, and opportunity bundles of practices as a starting point, as each bundle in isolation
could help develop employee resilience, resulting in improved employee outcomes
results suggest that organizations should provide more resources to employees through SHRM-CGV, such as
sustainable training and development, voicing mechanisms, fair career mechanisms, and work-life balance policies, to
develop their employees' positive psychological capital of resilience, which will play a positive role in promoting
employee well-being and offering opportunities to enhance employee performance
Limitation
The study was conducted within one institutional context, which may have affected the generalizability of our
findings to other national contexts. Although we argued that the Chinese context provided a “conservative” test
for our model, future research using institutionally and culturally diverse samples would add value by exploring
the influence of the national context on organizations' adoption of SHRM practices (Kramar, 2014).
The measure of SHRM-CGV used in the present study was based on the AMO perspective. Based on the three-
pillar concepts of (economic, environmental, and social) sustainability (Purvis et al., 2019), future studies can
categorize HRM practices into economic, environmental, and social HRM practices and investigate the strength
of the impact of each bundle of practices on employee and organizational outcomes.
We consider employee resilience and work engagement as mediators in the research model. However, other
variables may be valuable for explaining the process through which HRM practices affect employee outcomes.
Future studies may examine alternative mechanisms between SHRM-CGV and employee outcomes, such as the
role of organizational commitment and psychological empowerment as mediators, and employees' other types of
subjective wellbeing (e.g., job satisfaction and happiness at work), nonwork-related well-being, work-family
balance, and intention to leave as outcomes.
Conclusion
The conclusion of the study emphasizes several key points:
• Importance of Sustainable HRM: The research highlights the significant role of Sustainable Human Resource
Management (SHRM) practices based on common good values (CGVs) in enhancing employee resilience,
work engagement, and performance.
• Interconnected Relationships: It demonstrates that SHRM practices positively influence employee outcomes
through a serial mediation model, where employee resilience enhances work engagement, which in turn leads to
improved performance.
• Practical Implications: The findings suggest that organizations should adopt SHRM-CGV practices to foster a
supportive work environment, invest in developing employee resilience, and create strategies that enhance
engagement.
• Contribution to Literature: The study contributes to the existing HRM literature by providing an
understanding of the mechanisms through which SHRM influences employee behavior and organizational
performance, emphasizing the need for a multilevel approach.
• Future Research Directions: The study calls for further research to explore additional variables, contexts, and
methodologies to deepen the understanding of SHRM's impact on employee and organizational outcomes.
THANK YOU!!!