Micro-Foundations of Macro Sustainability: How Green HRM and Employee Behaviors Lead to Corporate Sustainable Performance in Hospitality SMEs

Abstract

Purpose: This study aims to investigate the internal behaviour mechanisms needed to transform environmental policies to multi-dimensional organizational outcomes. This study seeks to answer the question: How Green Human Resource Management (GHRM) affects Corporate Sustainable Performance (CSP) when mediated by Employee Pro-Environmental Behavior (PEB) and moderated by Green Transformational Leadership (GTL) by combining Ability-Motivation-Opportunity (AMO) theory and the Natural Resource-Based View (NRBV).

Design/Methodology/Approach: Quantitative, cross-sectional design was used. The primary survey data was collected from the operational and supervisory employees of the SMEs in the hospitality sector of Pakistan through the process of purpose sampling. The variance-based partial least squares structural equation modeling (PLS-SEM) using Smart PLS 3 software was used for the complex moderated mediation pathways.

Findings: The empirical results show that there is a positive impact of GHRM on PEB and PEB also positively and significantly impacts on CSP. Moreover, PEB plays a key role in the relationship between GHRM and CSP and is a key micro-foundational link. What is worth noting is that, the final structural model shows that there is a negative moderation effect between PEB and CSP by the variable GTL, thus suggesting a buffering role of GTL to the relationship between PEB and CSP; it means strong green leadership is a structural buffer which decreases the reliance of the firm's environmental performance on individual and unsystematic actions of each employee.

Theoretical implications: It extends the AMO and NRBV frameworks, so it does not only move towards sustainability literature but also towards the bridging of the micro – macro divide. It differs from the GHRM domain through a unique approach of green transformational leadership as a stabilizer of the system instead of just a motivational accelerator.

Practical implications: HR & sustainability managers in SMEs in the hospitality sector should implement structured GHRM systems in conjunction with leadership development. A strong green leadership environment helps to maintain corporate sustainability objectives in the face of the every-day ups and downs in employee voluntary actions. These insights can be used by policy makers to develop environmental compliance frameworks for SMEs.

Originality/Value: This study proposes a new moderated mediation model by incorporating GHRM, PEB, GTL, and CSP in the context of the hospitality SMEs in Pakistan, which is a field requiring little research and resources. The buffering effect of environmental leadership unveils a quite novel view on how to create sustainable companies in the long run.