Building Sustainable Values in
Organizations with the Support
of Human Resource Management:
Evidence from One Firm Considered
as the ‘Best Place to Work’ in Brazil
Wesley Ricardo de Souza Freitas
Charbel José Chiappetta Jabbour
Leandro Luis Mangili
Walter Leal Filho
Jorge Henrique Caldeira de Oliveira
Abstract Researchers and other professionals unanimously agree that companies should become more sustainable, but this will not happen without the support of human resource management. Paradoxically, there is a lack of information on the support human resource management offers to organizational sustainability applied to real cases. Therefore, this research presents a case study on this topic that was carried out in a leading Brazilian company, which is considered as a model and has been selected as ‘the best place to work in the country’. The results provide practical examples of how this family company has been working to guarantee an increasingly sustainable performance with the support of human resources, highlighting the achievements and challenges the company has faced. One of the main results indicates that companies seeking to achieve sustainability need the assistance of the human resource field in order to design a communication system which bridges the gap between practices and sustainable values.Wesley Ricardo de Souza Freitas, Assistant Professor of Management, The Federal University of Mato Grosso
do Sul, Paranaiba City. Endereço: UFMS, Rodovia BR 497 km, 12 CEP 79500-000, Cidade Universitaria, Paranaiba, MS, Brazil. E-mail: [email protected]
Charbel José Chiappetta Jabbour, Professor of Management and Sustainability, UNESP - Univ Estadual Paulista
(The Sao Paulo State University). Address: Av. Engenheiro Ed. Carrijo Coube, 14-01, DEP-FE, Bauru, Sao Paulo, Brazil, Postal Code: 17033-360. E-mail: [email protected]
Leandro Luis Mangili, HR Manager, Brazilian Company. Sao Paulo State University – DEP/FEB, Av. Eng. Ed.
Carrijo Coube, 14-01, Bauru, Sao Paulo, Brazil. E-mail: [email protected]
Walter Leal Filho, Senior Professor, London Metropolitan University Business School, UK, and the Director of
the Research and Transfer Centre ‘Applications of Life Sciences’ at the Hamburg University of Applied Sciences in Germany. Hamburg University of Applied Sciences (HAW Hamburg), Lohbruegger Kirchstraße 65 21033 Hamburg, Germany. E-mail: [email protected] Journal of Human Values 18(2) 147–159 © 2012 Management Centre for Human Values SAGE Publications Los Angeles, London, New Delhi, Singapore, Washington DC DOI: 10.1177/0971685812454483 http://jhv.sagepub.com
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Keywords
Sustainability, sustainable organizations, sustainable human resource management, case study, Brazil
Introduction
Organizations are responsible for most of the improvements in human living conditions. These improvements are reflected in technological innovations and the steady increase in human life expectancy. However, these types of improvements coexist with, and are challenged by, external factors generated by organizational actions, in particular, environmental damage and the marginalization of countries and individuals who generally are not major players in the capitalist system. Recently, company leaders have become very interested in better practices and examples of more sustainable management models. Human resource management’s (HRM) commitment to complex organizational sustainability is an essential component for reaching this goal (Jabbour & Santos, 2008). It is believed that HRM can actually guide organizational sustainability through changes which review values and assumptions in order to restructure the organizational culture and develop an understanding of sustainability which will then be reflected in employees’ daily actions (Rimanoczy & Pearson, 2010).
Nonetheless, there is a clear lack of real cases and better practices when it comes to engaging people management in the search for organizational sustainability. In order to contribute to the most up-to-date information on this topic and provide practical evidence for this little explored area, this article presents sustainability actions and their connections to HRM in a Brazilian company which, as the recipient of one of the most prestigious organizational sustainability awards in Brazil, is considered to be ‘one of the best places to work’.
Hence, the goal of this study is to answer the following question: How has human resource management in a leading Brazilian company contributed to its becoming a more sustainable organization? This research is particularly justifiable because it addresses an emerging topic (Boudreau & Ramstad, 2005; Ehnert, 2006; Weymes, 2004) which is in need of additional practical evidence from developing countries such as Brazil.
This article consists of five sections. The second section presents a literature review and the third section introduces the methodological procedures used. The fourth section presents the results, and the fifth section presents the final considerations and some aspects relevant to the findings.
Literature Review
Sustainable Organizations
In 1987, worried and well aware of growing socio-environmental problems, the United Nations World Commission on Environment and Development published a document called ‘Our Common Future’, also known as the Brundtland Report (Brundtland, 1991). The report highlighted the risks and consequences of using a traditional model for development. According to the Brundtland report (1991), the ideal model of development (i.e., sustainable development) should meet current global needs without compromising the needs of future generations.
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Since the report’s publication, this concept has been consistently included in the management of organizations (Boudreau & Ramstad, 2005), either as an opportunity, or a challenge (White, 2009). Therefore, Lacy, Arnott and Lowitt (2009) state that the concept of sustainability provides an opportunity for more ethical organizational actions by producing goods and providing services which do not harm the environment, while people benefit from new consumer markets, cost reductions, increases in employee satisfaction, and added value for society and investors. The challenge refers to new approaches to strategies, new organizational arrangements and increasing awareness of sustainability.
Wilkinson and Hill (2001) argue that managers will need to re-evaluate their role and more specifically, their responsibility, in order to persuade organizations to adopt practices which support an approach to sustainability. Accordingly, the management of human resources can be said to be the organizational function with the highest potential for incorporating sustainability into the organizational scope (Vickers, 2005) of seeking prosperity, social equity and environmental integrity.
Wilkinson and Hill (2001) presented two approaches for incorporating sustainability into organizations. The first approach consists of external pressures, such as commercial, governmental and legal pressures which impose more sustainable development, as well as client pressures; for example, those that support the use of renewable energy sources. The second consists of internal pressures related to the challenges of improving the quality of life at work.
Therefore, one can say that HRM can play a central role in organizations seeking sustainability (Jabbour & Santos, 2008).
A New Model for Human Resource Management
Due to its impact on organizational performance, interest in HRM has increased over the last few decades (Scroggins & Benson, 2010; Storey, 2007). According to Bridle (2010), unlike its old role, HRM now plays an important role in an organization. It participates in strategic planning and effectively contributes to the organization.
Expectations are high when it comes to the role HRM will play in sustainable development (P. Prowse & J. Prowse, 2010; Rasmussen, Andersen, & Haworth, 2010). Hence, several different models, orientations and concepts have been available in literature on HRM; for instance, the evolution stages of Meshoulam and Baird (1987), the 3D model of Gratton and Truss (2003), and the soft and hard orientations proposed by Storey (1989), Ahmed and Kazmi (1999) and P. Prowse and J. Prowse (2010). More recently, some authors have highlighted the role of human resources with regard to corporate sustainability (Jabbour & Santos, 2008; Vickers, 2010).
Lengnick-Hall et al. (2009) presented a contingency approach comparing HRM evolution to biological evolution, which has evolved due to impacts on the human organism, external environment changes or even due to the interaction of these two variables. Accordingly, Morley et al. (2006) highlighted that since HRM emerged in the nineteenth century, it has been adapted in tandem with the evolution of successive generations’ demands.
Freitas, Jabbour and Santos (2009) proposed a systematization of the HRM evolutionary process which is focused on organizational sustainability, especially concerning dimensions which had been previously neglected, such as social and environmental aspects (Figure 1). According to these authors, the apex of the evolutionary process of HRM presupposes that this organizational function has a fundamental role in organizational sustainability through the adoption of innovative practices (such as
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quality of life at work, incorporation of environmental issues and staff diversity policy) effectively contributing to the development of business strategies. Therefore, evolution has occurred ever since the human resources area was created. It has functioned as a bureaucratic workforce department, has become a strategic partner and is currently contributing to sustainability. Those authors argue that, despite the fact that sustainability has been considered an important issue in the human resource area, more practical examples of this type of integration are needed.
Organizational sustainability demands that an organization recognizes and values human capacities and competencies by adopting a more holistic approach integrated with business management (Wilkinson & Hill, 2001).
Human Resource Contributions towards the Environmental and
Social Dimensions of Sustainability
In this study, the environmental dimension is analyzed from the perspective of environmental management in companies. Environmental management involves incorporating objectives and environmental strategies into other, more general, objectives and strategies in the organization (Haden, Oyler & Humphreys, 2009).
In a pioneering study, Wehrmeyer (1996) highlighted the importance of the human resources area with regard to environmental management, primarily with regard to three aspects: (a) supporting environmental management through employee training, communication and motivation; (b) promoting organizational changes, incorporating the environmental variable into organizational values, developing competencies related to environmental management and ethically addressing environmental issues; and (c) integrating the environmental variable into practices of human resources, recruitment and selection, performance assessment, remuneration and training. According to Daily and Huang (2001), a higher level of environmental performance demands human resource practices that support the imple- mentation and maintenance of environmental management systems. Human resource practices (such as rewards, assessment and performance) should support the major stages of an environmental management system and promote the continuous improvement of the relationship between an organization and the environment. Personnel department Strategic HRM Sustainable HRM Figure 1. Human Resource Management Evolution Model Source: Freitas, Jabbour and Santos (2009).
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With respect to the social dimension, an organization incorporates the concept of social responsibility, and concomitantly, its human resource management provides a balance between individual, organizational and collective goals (Gooderham, Ringdal & Parry, 2006). According to Mishra and Suar (2010), a socially responsible company is one that seeks to meet multiple interests of those who are directly or indirectly involved with it, such as employees, suppliers, the community and distributors, rather than only seeking to earn profits for its shareholders. Potluri, Batima and Madiyar (2010) argue that the concept of social responsibility presupposes that a private company has responsibilities towards society which extend beyond generating profit.
Greenwood (2002) believes that socially adequate human resource management should (a) develop reward systems based on equity, fair distribution, autonomy and respect; (b) provide safety at work by preventing accidents and promoting workplace health; (c) treat employees with respect and honesty and create transparent processes; and (d) respect employees’ privacy and regard respect, freedom and autonomy as organizational values.
Although the topics mentioned have been widely accepted by researchers in the area of human resource management (Jabbour & Santos, 2008; Vickers, 2010), there is still a shortage of practical evidence when it comes to companies.
Methodological Procedures
This is a qualitative study based on a case study (Patton, 2002). The field research was carried out in a company in the state of São Paulo, Brazil, which operates in the furniture segment and will be henceforth referred to as ‘company A’. A single case study was conducted because the selected case greatly contributes to knowledge and development of the theory (Yin, 2005). It can also be considered a model case because the company has won several awards in the fields of people management, quality management and socio-environmental management:
1. ‘South America Quality Award’ by the Brazilian Association of Quality Incentive 2. ‘Social Technology Award of Bank of Brazil Foundation’ for the recycling programme
3. ‘The 100 Best Companies to Work Award’ by the specialized business magazines Exame and Você s/a
4. ‘The 100 Best Companies to Work in Latin America Award’ by the Great Place to Work Institute
Figure 2 illustrates the framework used in this research. The goal is to understand how company A’s HRM has been contributing to social and environmental dimensions to achieve more sustainable management.
The data was collected via interviews based on the literature review using the variables shown in Table 1. The questionnaire included questions about the history of the company, major awards received, performance in the domestic market, environmental management and support provided by HRM.
The data was collected in 2010 from interviews conducted with four employees from the areas of product and process development, production and human resources, as well as the CEO of the company. Each interview lasted for about 40 minutes, but they could not be recorded. All important responses were
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Company A Green dimension of sustainability Social dimension of sustainability HRM Company A: more sustainable Figure 2. Research Framework Source: Developed by the authors. Table 1. Research Variables
Variables Theoretical Perspective Analytical Perspective Organization The planned coordination of the activities of a number of people in order to achieve some common explicit purpose or goals through the division of labour and functions, and through a hierarchy of authority and responsibility (Schein, 1982, p. 12). Company characterization Social responsibility Proposes that a private company has responsibilities to society that extend beyond generating profit, and that strategic decisions often affect more than just the organization (Potluri, Batima & Madiyar, 2010, p. 36). Practices related to organizational social aspects which focus on the stakeholders Environmental management Guidelines and operational and administrative activities executed in order to obtain positive effects for the environment by reducing damages or problems caused by human actions, or by preventing damages or problems from occurring (Barbieri, 2004). Practices for reducing environmental impacts Human resource management A number of integrated decisions that establish work relationships; the quality of human resource management directly influences the organization’s and employees’ capacity to obtain their objectives (Milkovich & Boudreau, 2006, p. 19). HR practices are tools used by organizations to achieve certain goals Human resource management for sustainability Human resource management support of organizational sustainability through the development of policies, strategies and practices that support the economic, social and environmental dimensions (Jabbour & Santos, 2008). Development of sustainable actions with the support of human resource management Source: Developed by the authors.
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written down. Additional data was collected from informal conversations, routine work observations and analysis of the company’s website and documents. The company’s practices were described using this data, and all gathered information was validated by the interviewees in order to guarantee the validity and reliability of the case study (Yin, 2005). The data was analyzed by grouping the information gathered according to major variables of the research on behaviour patterns and new discoveries.
Results
Company A’s Characteristics
Company A was founded in 1965 in the state of São Paulo, Brazil. It started as a small joiner’s shop that produced customized furniture, and is now a medium-sized company that distributes its products all over the country, mainly to the south-east, north-east and centre/west regions, as well as to foreign markets in Latin America, Central America and Africa. Operating in the furniture segment, manufacturing and home furniture (wardrobes, cupboards, beds and cribs, dressers, nightstands and home office furniture), the company has around 420 employees and produces more than 50,000 parts per month, processing 120 tonnes of wood per hour of work.
Seeking Sustainability
Company A claims that, in its daily operations, it follows values compatible with a more sustainable organization. The following values were highlighted in company A’s strategic planning:
1. Meet market needs by offering quality 2. Closely monitor the company’s performance
3. Acquire and implement competitive technology and projects 4. Establish and maintain partnerships with suppliers
5. Provide employees with frequent training 6. Maintain a good working environment 7. Respect the environment
8. Collaborate with the community
The presence of these values in company A can be observed through the management of various social and environmental practices. Some of those practices have won awards and are worthy of distinction among typical Brazilian companies.
Created in 2001, the Recycling Project is company A’s major programme. Besides its effective contribution to the environmental dimension, the recycling programme generates income for several people who depend on the collection of recyclable materials for their livelihoods. This programme also contributes to environmental education in schools via lectures, theatre performances and the distribution of environmental education and awareness booklets. It also motivates staff through financial rewards.
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Over 1,020 tonnes of material have already been recycled through the recycling programme. The financial resources obtained (around US$70,000) have been used in programmes for employee training and development, educational campaigns, tree planting in industrial districts, support and professionalization of ‘waste pickers’ or recyclers (in Brazil thousands of low-income people survive by scavenging recyclable materials), and the distribution of 20,000 reusable bags. The company has also provided an area for the storage, selection and pressing of collected recyclable material.
The Rehabilitation Programme focuses on the integration of young, at-risk people in the labour market. The selected youth participate in a socialization programme under the supervision of experienced psychologists. Since its inception in 1961, 46 adolescents, 37 of whom have been employed by the company, have benefitted from the programme.
Through the Conscious Consumption Programme, company A has replaced conventional taps with motion-sensor taps and conventional paper towels with electric hand dryers. It has also launched campaigns to encourage the use of reusable cups and bags; campaigns to encourage efficient use of electricity and water as well as reuse of materials are quite common.
In partnership with school districts, the Eco Chic Fashion Project encourages environmental awareness by involving students in a fashion competition with clothes made from recyclable materials. The Consciousness Image Programme involves primary school students by focusing on educating them to become aware of environmental issues and the creation of a fair and sustainable society.
Table 2 shows a brief profile of the programmes mentioned and the sustainability dimensions involved.
Table 2. Main Practices and Projects Focusing on Sustainability in Company A
Actions Brief Description Sustainability Dimensions
Recycling
programme Promotes the selective collection of recyclable material in the company. It is more than simple waste collection because it incorporates the community through environmental lectures and the practice of selective waste collection in schools. It collects discarded materials from private and public institutions. Social and environmental Rehabilitation programme Aims at recruiting young offenders to work for the company in a local institution with a social programme for adolescents who have broken the law or are at-risk. Social Volunteers
programme Some employees voluntarily work overtimesocio-environmental practices. The voluntary overtime hours to contribute to are recorded and taken into consideration in the performance evaluation of each employee. Social and environmental Conscious consumption This programme focuses on educating employees on the use of natural resources such as water, energy, paper, plastic, etc. Environmental Eco Chic Fashion Consists of a fashion competition with clothes made from recyclable materials and involves students from partner schools. Environmental Consciousness
image programmeMainly focused on schools; students record photographic images to help them become aware of the environment in the community. Environmental Source: Developed by the authors.
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When asked about one of the main drivers for the success of the practices that have made company A more sustainable, one of the respondents answered: ‘Involving people in the events and programmes implemented by the company increases employee morale because employees are happy to contribute to sustainable goals in addition to manufacturing furniture.’
Human Resource Support of Sustainability
Company A has been concentrating efforts to make its human resource policies suitable for various aspects of sustainability. Ergo, it has developed several practices, including a diversity management policy and quality of life at work, to highlight it within the domestic context. Table 3 summarizes the major human resource practices developed by the company.
In addition to those practices, there is an organizational desire for equity and strengthening relationships between people with high hierarchical positions and people on a lower hierarchical level. For instance, when the company wins an award, its owners and employees travel to and attend the award ceremony together, strengthening their relationship.
According to a respondent, the human resource area has been seeking a more strategic and sustainable management because it not only recruits, capacitates, assesses and rewards employees’ efforts and results in order to improve quality and create innovative products to increase sales but also focuses on directly contributing to the development of employees and the community by establishing a long-term relationship. According to another interviewee: ‘The basic principles of company A’s people management policy are the staff’s level of professionalism, motivation to work, and maintaining an adequate hierarchical and salary structure which enables professional development and is aligned with human development, thus balancing work and life goals.’
Table 3. Human Resource Practices in Company A Practice Description Training Focusing on employees’ professional and personal development. Career, hierarchy and salary plan Based on the acquisition of competencies associated with the development of the business. Social benefits Health, pharmacy and dental insurance plan, basic needs grocery package and scholarships. Awards Rewards for production and assiduity results. Performance evaluation similar to ‘360-degree performance appraisal method’ Employee evaluation completed every six months based on economic, social and environmental indicators; a co-evaluation of the company managers is simultaneously completed by these employees. Quality of life at work Provides corporate wellness programmes (stretch break) which incorporate employees’ families in the company’s daily routine, by offering orange juice to employees at work and by providing television, Internet, games and a recreation centre to entertain employees during their lunch break. Diversity Hires people with special needs to work in areas such as packaging, administration and the support division. Source: Developed by the authors.
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It is worth mentioning that among company A’s human resource practices, communication stands out and is considered an essential element for organizational sustainability (Table 4). According to an evaluation from the Great Place to Work Institute in Brazil, the company was ranked number one in this category.
Discussion
It can be concluded that company A’s human resources play an active role in the search for sustainability. The company has been implementing a series of volunteer programmes with the objective of a more social and sustainable management. Human resource management proved relevant to all of these programmes by mobilizing its practices (training, development, recruitment and selection) to support organizational sustainability. By analyzing company A in terms of human resources and environmental and social management, one could conclude that there is a lot to be learned. A great deal also needs to be accomplished in terms of integrating human resources and sustainability. Yet, based on the interviews, one can say some challenges still lie ahead for this process, as shown in Table 5.
The interviewees are aware that the company should assume a leading role among Brazilian companies in the search for sustainability, especially because the raw material for its products, wood, is a natural resource that demands sustainable use and handling. The raw material used in the furniture manufacturing processes requires sustainable use and handling, that is, reforestation, especially for wood acquired from suppliers who have ISO 14001 or green seal certifications. It is important to highlight that company A is clearly oriented towards corporate social responsibility, primarily with respect to the adoption of management practices rather than reaping profits (Mishra & Suar, 2010; Potluri et al., 2010).
With respect to people management, the company clearly seeks to select employees committed to environmental issues. In addition, it provides training and determines socio-environmental indicators for employees’ performance evaluation as recommended by specialized literature (Wehrmeyer, 1996).
With regard to social management, the HRM policy seeks to value employees through practices of inclusion and equity, and by employing at-risk youngsters.
Table 4. Communication Practices in Company A
Practice Goal
Bulletin board and
newsletter To inform employees about the company policies, new products, birthdays, training dates, etc. Website To present products, mission, values and company management politics which focus on
the social and environmental dimensions.
Meetings To discuss items related to satisfaction, development, performance, quality and production, that is, aspects related to improvements, difficulties and results achieved. Two-way
communication radio To speed up decision-making processes through communication between production employees and decision-makers. Leadership A connection tool between employees and top administrators. Meetings and teamwork Improvement teams that develop and implement action plans. Source: Developed by the authors.
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There is enough evidence to conclude that company A’s programmes, in terms of socio-environmental aspects, are not only focused on material cost reduction but also on environmental awareness and future generations. These types of programmes have been adequately supported by its human re- source area. Therefore, it can be said that this company has been developing actions and obtaining results which justify its distinguished status among Brazilian companies. Evidence shows that company A has been proactively seeking sustainability with the support of HRM (Jabbour & Santos, 2008; Vickers, 2005).
Conclusions
This study was based on arguments and considerations about state-of-the-art sustainable HRM to verify how a typical Brazilian company has achieved more sustainable management with the support of HRM. There is, however, a lack of practical evidence on this topic. Therefore, it can be said that the objective of this study was accomplished as it investigated a company that is a notable example of smooth
Table 5. Company A’s Lessons and Challenges
Focus/
Practice Lessons Challenges
People management Its people management strategy is focused on valuing people, equity, diversity and inclusion while also considering the economic, social and environmental goals of the company and society. Sustain organizational excellence, proactivity and received recognition from employees and society. Environmental
management Environmental preservation is a part of the company’s values by incorporating a natural resource preservation culture. Volunteer and proactive work sometimes use resources for the development of programmes. Establish relationships (100%) with suppliers concerned with environmental dimensions. Base the organizational culture on a pro-environmental management. Social
management Valuing and including social minorities (people with disabilities and young offenders) in the company. Getting the community involved in socio-environmental programmes, especially programmes in partnership with schools. Developing practices related to providing for employees’ well-being and quality of life at work. Primary focus on communication based on the principles of ethics and transparency. Guide and support the community’s search for social and environmental performance improvement indicators such as the inclusion of youth, employment and tree planting. Alignment between human resources and sustainability Employee participation in socio-environmental programmes via the volunteers programme. Support of environmental actions based on performance evaluations, awards and career as well as the practices of rewards for economic, social and environmental results. Sustain motivation, involvement and commitment of people with the programmes. Communication Guarantee communication practices that support the
search for sustainability. Provide a space for a transparent and dynamic communication.
Source: Developed by the authors.
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integration between human resources and sustainability in Brazil. The framework proposed in the third section proved adequate for understanding the reality of company A’s operations.
Company A’s major findings are as follows:
1. Human resource management and its practices play a fundamental role in supporting environmental and social management initiatives.
2. The objective of organizational sustainability improvement should be pursued using specific programmes.
3. The programmes should include both employees and the community.
4. A communication system to spread sustainability practices and concepts is fundamental for implanting sustainable management initiatives.
5. A more sustainable management does not prevent profit increase and generation. On the other hand, synergy might occur.
6. The process of sustainability involves several challenges and may be successful, but is not immune to failure.
These findings can be useful tools for researchers and company administrators. For researchers, this study is a practical contribution to research in the area, which is predominantly theoretical. Regarding company administrators, this study shows real examples of a typical Brazilian company that is committed to becoming more sustainable. This process can be very challenging, but it can also succeed and requires the support of the HRM.
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