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Franzoni, S. HRM–CSR–SP Relationship. Encyclopedia. Available online: https://encyclopedia.pub/entry/18301 (accessed on 16 May 2024).
Franzoni S. HRM–CSR–SP Relationship. Encyclopedia. Available at: https://encyclopedia.pub/entry/18301. Accessed May 16, 2024.
Franzoni, Simona. "HRM–CSR–SP Relationship" Encyclopedia, https://encyclopedia.pub/entry/18301 (accessed May 16, 2024).
Franzoni, S. (2022, January 16). HRM–CSR–SP Relationship. In Encyclopedia. https://encyclopedia.pub/entry/18301
Franzoni, Simona. "HRM–CSR–SP Relationship." Encyclopedia. Web. 16 January, 2022.
HRM–CSR–SP Relationship
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This entry is adapted from the peer-reviewed paper 10.3390/su132413699

Human Resource Management–Corporate Social Responsibility–Sustainable Performance (HRM–CSR–SP) relationship is considered as a strong theoretical foundation where HRM is critical in educating firms on the values of CSR and leading behaviors to pursue a sustainable performance. This relationship explains the organizations’ behaviors towards developing and implementing CSR policies into strategic and operational decisions by engaging their employees supported by HRM practices to achieve sustainable performance (social, environmental, financial performance).

corporate social responsibility human resource management sustainable performance hospitality industry

1. Corporate Social Responsibility

García-Sánchez and Araújo-Bernardo [1] referred to CSR as an organizational responsibility to consider their environmental and social commitments rather than focusing on pure economic goals. CSR is also defined as a business strategy to achieve social, environmental, and economic sustainable development [2]. In the hospitality industry, the adoption of CSR-related initiatives provides financial benefits to the stakeholders [3].
Researchers [4][5] argued that the formation and implementation of CSR-related strategies are highly dependent on the organizational mission and the employees’ mindset. We believe that CSR should be part of organizational policies rather than considering it a part-time or philanthropic activity by involving the employees of all levels. Inyang et al. [6] also claimed that CSR strategy development and implementation is only possible by keen top management and employees themselves.

2. Human Resource Management

The hospitality industry creates numerous employment opportunities, and the availability of trained and skilled employees is a crucial element in a business’s success. Therefore, HRM is one of the most significant operations in the tourism sector. HRM acts as a change agent in CSR implementation [7] and plays a significant role in developing competencies to achieve SP (economic, environmental, and social performance). Indeed, the literature on the HRM–CSR relationship supports developing and managing CSR initiatives through HRM [8].
HRM is also a significant predictor of organizational performance, productivity, and individual work attitudes and behaviors [9] in achieving sustainable competitive advantage [10]. Aligning CSR strategies in the organizational operations requires support from HRM practices [2][11][12] to achieve SP (Figure 1): economic incentives; teamwork; recruitment and selection process; training and development; ethical culture; shared objectives and results; transparency; engagement; well-being; human rights; health and safety.
Sustainability 13 13699 g001
Figure 1. The CSR–HRM–SP Relationship.

2.1. Economic Incentive

Sola and Ajayi [13] referred to economic incentives as financial or monetary benefits accrued to the employees for their work done. They were described as important tools to motivate employees for better performance in the organizations. Prior studies show that remuneration helps bring into line the interests of employees and owners associated with higher employee and organizational productivity [13].

2.2. Teamwork

Recently, several authors have identified extensive use of teamwork in decision-making as essential high-performance HRM practice. Teamwork has a statistically significant and positive effect on satisfaction and performance at work [14].

2.3. Recuritment and Selection Process

Several authors have supported that the recruitment of apposite candidates in the firms should be combined with the development of workforce effectiveness relevant to the business strategies and objectives [15]. This is consistent with the arguments of several scholars who deliberated that efficiency of selection and recruitment practices leads to high firm performance [15].

2.4. Training and Development

Studying the impact of different HR practices, Herrbach et al. [16] observed that the provision of training opportunities improves the competencies and expertise of employees, which sequentially boosts their efficiency and effectiveness. Proper training sessions in the organizations contribute to building a partnership between the employees and organizations, enriching their abilities, skills, knowledge, resulting in lower staff turnover [17].

2.5. Ethical Culture

The ethical culture consists of the job environment that can be viewed as the formal (codes of conduct, training efforts) and informal (norms concerning ethics and peer behavior) systems to enhance the workplace’s ethical behavior. Furthermore, [18] postulated that ethical organizational culture could also affect employees’ behavior and attitude and serve as a motivational factor.

2.6. Shared Objectives and Results

Shared objectives can positively affect performance by aligning employee efforts, shared responsibility of the results, and increased motivation [6][19]. Motivated employees are highly engaged, innovative, creative, perform all the tasks effectively and efficiently, and are attached to their organizations that significantly enhance sustainable individual and organization performance [20].

2.7. Transparency

Transparency is one of the most critical factors of firms that serve as a vital signal and ensures that management is not involved in unlawful activities as their activities are scrutinized. Transparency confirms that managers utilize the organization’s resources most efficiently and desirably and for the most appropriate goals without improper regard for personal interests [21].

2.8. Engagement

According to Armstrong [22], employee engagement is an organizational setting that provides equal opportunity to the employees to influence organizational decisions and contribute to improving organizational performance. Employee engagement is “a positive, fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption” [23].

2.9. Well-Being

Employee well-being defines as the employees’ feelings of satisfaction regarding their work environment. Demirtas et al. [24] defined it as a positive mindset, dedication, self-fulfillment, and a higher level of vigor, indicated by feelings of enthusiasm, inspiration, pride, and meaningfulness of the job. Furthermore, [25] opined that sustainable performance and employee well-being had become crucial issues for sustainable organizational development.

2.10. Human Rights

Human rights became a matter of responsibility and duty of firms [26]. All persons must work, including equal access to productive resources, receiving wages, living adequate for well-being, and freedom from discrimination based on race, sex, or any other status, in all aspects of work.

2.11. Health Safety

Health and safety concerns are explained by [27] as the maintenance and promotion of the highest level of the social, mental, and physical wellbeing of the employees. This aspect is important, in particular, where the firms are operating in countries with limited or no relevant legislation.

3. Sustainable Performance

Rhou and Singal [3] argue that since the hospitality industry decided to adopt sustainable practices, its profitability level seems to increase and benefit its stakeholders. The previous studies examined the linkage of CSR and financial performance relationship and supported positive association among them [28]. However, the effect of CSR on other performance has rarely been examined to date. A review of 127 empirical studies published during 1997–2002 confirmed the positive role of CSR in fostering financial outcomes [29]. Overall, it is suggested that HR impacts the organizational processes, positioning CSR initiatives and increasing organizational performance [6].
CSR practices influence individuals’ learning, retention, liability, morale, motivation, and productivity, increasing loyalty, commitment, and organizational performance [30][31][32]. The integration of CSR goals and values also inspires staff satisfaction, improves communication among employees, social involvement, stakeholder engagement, fosters ethical standards, lowers absenteeism, strengthens loyalty, transparency, and increases performance [33][34][35][36].
According to Milfelner et al. [37], the main concern of HRM is to motivate, support, and manage the workforce to achieve organizational performance and hold them responsible for different actions within the organization. HRM plays an essential role in influencing how a firm employs its resources to accomplish environmental, social, and financial performance [38][36][39] in line with the Sustainable Development Goals of the United Nations’ 2030 Agenda. Table 1 indicates different performance indicators.
Table 1. Sustainable performance indicators for the hospitality industry.
Dimensions Sustainable Performance Indicators
Financial Revenues
Gross profit
Revenue per Available Room
Average daily rate
Average Room Rate
Gross operating profit per available room
Cost per Occupied Room
Salary cost
Etc.
Environmental CO2 emission
Energy consumption per guest night
The energy produced by renewable sources
Water consumption
Plastic consumption
Environmental certification
Certified cleaning products
Etc.
Social Human
Resource		 Communication between employees and managers
Sharing goals
Trainings
Health and safety
Employees satisfaction
Benefits
Staff turnover
Etc.
Guest Tourist arrival–daily, weekly, monthly, and yearly
Tourist satisfaction
Quality perceptions among tourists
Innovation in product/services
Degree of accessibility to hotels
Etc.
Supplier Partnership with firms that are attentive to sustainability
Certifications
Supplier meeting specific needs
Suppliers fulfilling needs on time
Etc.
Community Professional opportunities to the local area
Promoting local, sustainable development
Promoting local initiatives (cultural, sporting, etc.)
Promoting local, cultural, and historical heritage
Etc.
Researchers argued that CSR has significant importance in the hospitality industry, and HRM is critical in educating firms on CSR values and leading behaviors to pursue a sustainable performance (SP). HRM plays an essential role in managing, supporting, and motivating employees to achieve the organization’s performance [40] and influence how a firm employs its resources to accomplish SP [41][38][36]. However, despite the significant contribution of CSR, HRM, and SP, a limited number of studies have jointly analyzed these aspects in the hospitality industry and the context of culturally distinct countries. A more comprehensive study is required to understand the nexus of HRM, CSR, and SP in the hospitality industry.

4. Conclusions

The previous literature investigates the HRM and CSR role in achieving sustainable performance, and our results are consistent with such studies [42][43][44][45]. However, scant literature exists to understand the impact of HRM and CSR in achieving sustainable performance in the hospitality industry, especially in a cross-cultural context. Previous studies identified that the focus of HRM is on employee well-being, performance, and ethical concerns [42][46], but have hardly investigated its relationship with CSR, excepting a few.
Moreover, herein also addresses the call for multilevel studies in understanding the company’s overall perception about socially responsible behavior and the process behind fostering such behaviors by the HR department [47][48]. Although previous studies have examined the positive role of CSR on performance, the role of HRM in shaping CSR and their subsequent behavior in achieving sustainable performance in a cross-cultural context has rarely been studied. Moreover, different studies [49][50] identified mixed results, but this study indicates that HRM is a relatively stronger impact on western cultures. Therefore, these results open new avenues for future studies and contribute to examining the HRM–CSR-performance nexus, especially in the hospitality industry.
Firms should be engaged in responsible employee involvement and well-being, recruitment, training, and career management practices; better definition of training needs; employee satisfaction; and motivation practices. These practices allow the firm to translate CSR into behaviors, objectives, and actions to pursue SP [51].

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