Tenth AIMS International Conference on Management

January 6-9, 2013

Green HRM: Does it Help to Build a Competitive Service Sector? - A Study

Mathew Mampra mampra@yahoo.com Alliance University, Bangalore
Purpose To analyse green HRM practices and its role in creating and sustaining an organizational culture conductive towards developing a competitive service sector. Methodology This paper is based on a systematic literature review and compilations of findings and lessons learned from the authors own experiences. The paper also draws on examples from forward looking companies. Approach Green HRM is the use of HRM policies to encourage the sustainable use of resources within business enterprises, promote the cause of environmentalism and in the process, create improved employee morale and satisfaction. The topic of green HRM is attracting increased attention among management scholars and entrepreneurs especially related to service sector to use as a tool for their competitive advantage. The importance and relevance of this green HRM initiative as an aiding tool to maximise the profit are explored. Practical implications and Learning Objective The paper has implications for understanding the role of green HRM in nurturing a favourable organisational culture to create a competitive environment. This paper is expected to assist business leaders to consciously create a green culture which makes the service sector more competitive. Originality/value The importance of managing the services in competitive environment by creating a green organisational culture is under-researched. How it is to be nurtured and supported within service organisations? Often the service organization itself discourages, or at least makes it extremely difficult, for the business leaders to take risks in order to explore new green HRM initiatives. Keywords: Green HRM, Sustainability, Competitive, Environmentalism, Organisational Effectiveness, Planet, Service Sector

1.

Introduction

Green HRM is the use of HRM policies to encourage the sustainable use of resources within business enterprises, promote the cause of environmentalism and in the process, create improved employee morale and satisfaction. Green human resources also refer to using every employee touch point/interface to promote sustainable practices and increase employee awareness and commitments on the issues of sustainability. It involves undertaking environment-friendly HR initiatives resulting in greater efficiencies, lower costs and better employee engagement and retention which in turn, help organizations to reduce employee carbon footprints by the likes of electronic filing, car-sharing, job-sharing, teleconferencingand virtual interviews, recycling, telecommuting, online training, energy-efficient office spaces etc. Positive result of the green HRM policy is better employee morale. Increased employee loyalty, productivity, recruitment and retention also made the list of most-cited benefits apart from long term profit maximisation. Whether youre doing it to improve your bottom line, strengthen your brand, being competitive or out of a sense of social responsibility, there are many good reasons for organisations to go green in their HRM policies due to its long term gains. This aspect cannot be overlooked as it involves the most vital part of your organisation-your employees especially in service sector. This is a matter of making them feel that they are making a difference at their jobs by helping the organisation to be competitive in the market place, while looking satisfied to the principles of their employer.Green HRM practices to be employed from beginning at the point of an employees organizational entry and continuing until the point of the employees exit. Human capital and the systems surrounding it are the true cornerstones of building a sustainable business in service sector. Sure, you can argue that businesses are sustainable because of their operations and culture, but it's the employees who craft and execute those eco-policies and create that green corporate culture. Without developing personnel and implementing sustainable strategies, it's rather difficult to go green successfully. That's why green human resource (HR) practices are a key component of sustainable business development in the service sector.

2.

Research Methodology

This paper adopts a literature review approach beginning with indicating significant works on Green HRM research, integrating environmental management and HRM and classifying the literature systematically. 1273

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Literature review is adopted as it enables to structure research and to build a reliable knowledge base in this field. The following HR processes namely recruitment; performance management and appraisal; training and development; employment relations; compensation and rewards are covered . The concept of green work life balance, green HRM behaviours and green signatures are also covered for better understanding of green organisational culture and the financial benefits of going green on a long term for service sector. Secondly the paper draws on examples which forward looking companies use.This paper can find compilations of findings and lessons learned from my own experience as an owner-manager for an SME for more than two decades. In short the methodology adopted is a symphony of literature review, case study and experience sharing approach.

3.

Literature Review

In recent years, a number of scholars have contributed to the understanding of GreenHRM (e.g. Berrone& Gomez-Mejia, 2009; Brio, Fernandez, &Junquera, 2007; Fernandez,Junquera, &Ordiz, 2003; Govindarajulu& Daily, 2004; Jabbour& Santos,2008; Jabbour, Santos, & Nagano, 2010; Madsen &Ulhoi, 2001; Massoud, Daily, &Bishop, 2008; Ramus, 2001, 2002; Renwick, 2008; Stringer, 2009; Wehrmeyer, 1996).Distinguished policies in the field of recruitment, performance and appraisal management, training and personnel development, employee relations and reward systems are considered powerful tools for aligning employees with a companys environmental strategy (Renwick, 2008). Therefore Green HRM can decisively contribute to successful environmental management. One of the main functions of green HRM is to educate the staff on what is done, how it works and how were helping the environment. That really develops a sense of pride because, protecting the environment and cutting costs are great reasons for companies to go in the direction towards green HRM. However, one question often comes up is why the full potential of green HRM is not been realised. Let us examine this in detail. Social responsibility and Sustainability Social responsibility and sustainability are hot topics in business today. People and companies invest in sustainability because of benefits such as improved public opinion, customer relations, and the ability to attract and retain talent (Fox, 2008). The term sustainability is defined and interpreted differently by different organisations as part of the process in which they try to reach for it. For example, HSBC refers sustainability as running their business for the long term. It is about investing in customer relationships; ensuring that their governance is robust; and that their risk appetite is prudently managed. This approach allows them to contribute to socio-economic development and environmental protection in a number of ways. Through their day-to-day business activities, they invest directly in communities, through their education and environment programmes. Socially responsible human resource management helps the business acquire, develop, and manage employees while valuing them as investments. Socially responsible Green HRM extends the management imperative to balance the triple bottom line of people, planet, and profit (Hart, 2005). Sustainability is broadly defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs (WCED, 1987, p. 8). For human resource management this means championing the integration of social, environmental, and economic goals for the organization over the long-term. The conventional wisdom concerning environmental protection is that it comes at an additional cost imposed on firms, which may erode their global competitiveness. However, during the last decade, this paradigm has been challenged by a number of analysts (e.g., Porter & van der Linde, 1995), who have argued basically that improving a companys environmental performance can lead to better economic or financial performance, and not necessarily to an increase in cost. Central to the argument for Green HRM systems is that motivated and engaged workers increase organizational performance. The emphasis is on the value offered by high performing employees. Employees the intellectual capital of the organization create added value. While costs to implement socially responsible HRM may appear higher, ultimately socially responsible firms reap higher benefits. Service sector organisations focusing solely on short-term profit sends a message to employees that the organization views them as commodities (Becker, Carbo, &Langella, 2010). Violating legal or human rights of any stakeholder has negative consequences. Nike found that negative publicity concerning its unfair labour practices ultimately hurt its business: The way it hurt our business was that it hurt our people. Individual employees at Nike started to wonder what kind of a company they were working for and what message was being sent about the people who worked there (Nike Vice President Maria Eitel, cited in Williams, 2002, p. 38). 1274

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Treating employees fairly translates into better financial performance (Orlitzky, Schmidt &Rynes, 2003). For example, companies in the 100 Best Companies had significantly higher financial performance compared with industry competitors, and their employees had more positive attitudes toward work. Positive employee relations are an intangible and enduring asset and a source of sustained competitive advantage (Fulmer, Gerhard & Scott, 2003). A socially responsible HRM focuses on the practical aspects of how to implement ethics, equity, ecology, and social responsibility into business relationships. Applicant perceptions of corporate social responsibility can affect attracting the right people to critical jobs. Kingfisher Airlines has and Union Carbide had a negative reputation for social responsibility. A focused campaign highlighting Tatas socially responsible behaviour helped them getting the best talents. Programs that highlight a firms affirmative action, diversity and environmental policies can also be used to help attract desirable recruits. Green HRM can meet its full potential only by considering employees in their two fold role as producers and consumers. Employees learn different kinds of behaviour not exclusively at the workplace, but also in private life. Since reciprocal interactions between working life and private life occur, a green work-life balance concept is suggested to facilitate environmentally friendly behaviour in both life domains. Here the decisions by the HR managers which can be called green decisions are playing a very important role. Green work-life balance (WLB) It can be assumed that the full potential of Green HRM in theory and practice has not yet been realized. One conceivable deficit which could hamper the greening process is that the green HR policies focus only on employees working role. While contemporary HRM already considers the complex array of employees workroles and non-work-roles by developing, for instance, work-life balance policies (e.g. Barnett & Hyde, 2001; Elloy& Smith, 2003; Kossek, 2003; Marks & MacDermid,1996), Green HRM to consider the employees private life also to take its full potential. We need to acknowledge that environmentally relevant attitudes and behaviour are not learned exclusively at the workplace, but also in private life. People have distinctive modes of living. They practice specific consumption patterns in their everyday life, which have different effects on the environment (Reusswig, 1994; Sderholm, 2010). Therefore employees private role as consumers is considered crucial for learning and practicing environmental attitudes and behaviour. Since work-life research has shown that there are complex interactions between peoples roles in working life and private life, both life spheres need to be considered as interdependent (Edwards & Rothbard, 2000; Lambert, 1990; Kanter, 1977). Thus, it is an obvious assumption that private experiences also influence peoples environmental behaviour in working life. Green HRM and Green WLB An holistic approach The need of the hour is a holistic approach to HRM (Elloy& Smith, 2003),considering employees as human beings is far more appropriate for a successful Green HRM in order to align employees with a companys environmental strategy. All companies that strive for environmental protection are well advised to pay attention to their employees. As Wehrmeyer (1996, p. 7) already stated in the mid-nineties: If a company is to adopt an environmentally-aware approach to its activities, the employees are the key to its success or failure. (Viola Muster, 2011) Green HR policies focus on collective and individual capabilities to bring about green behaviour. Collective capabilities are mainly discussed in relation to cultural characteristics of the company that are considered significant in either restraining or advancing the corporate greening process. Building on the assumption that culture can be managed at all, Green HR policies are aimed at promoting an environmental corporate culture (Crane, 1995; Fernandez, Junquera,&Ordiz, 2003; Harris & Crane, 2002). Referring to Scheins much-quoted definition of corporate culture, an environmental corporate culture can be understood as a pattern of shared basic assumptions (Schein, 2004, p. 17) about the environment and environmental issues. It is argued that an environmental culture is needed to socialize employees according to a companys environmental strategy (Fernandez, Junquera, &Ordiz, 2003; Wehrmeyer& Parker, 1996). Once an environmental corporate culture is formed, individual behavioural changes are assumed to be most likely. These cultural improvements are assumed to increase employees motivation and their commitment to the company and its environmental ambitions (Govindarajulu& Daily, 2004). Employees also learn environmental attitudes and behaviour in private life. Employeesprivate environmental performance is closely attached to their individual ways of living and their everyday behaviour (Soderholm, 2010). 1275

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Consumption is understood as the process of selection, purchase, usage and disposal of products (e.g. Blackwell, Miniard, & Engel, 2006). Since it is the very nature of consumption to use resources, all consumption behaviour is likewise environmentally relevant behaviour (e.g. Hansen & Schrader, 1997). If environmentally relevant behaviour is practiced in working life and private life, it is likely that employees environmental attitudes and activities are generated from experiences in both life spheres. The impact of Green HRM on greening employees will always be influenced by employees personal environmental experiences. As a result, Green HRM might fail in realizing its full potential if they focus merely on employees in their working role. On one side, many research has been conducted into the interface of working life and private life (Edwards &Rothbard, 2000). On the other hand, the implementation and prevalence of work-life balance policies in companies have considerably increased (Kossek& Lambert, 2005). Therefore, for a successful implementation of green HRM policies, linkages between working life and private life is an unavoidable ingredient. Green work-life balance policies to aim at decreasing imbalances in environmentally friendly behaviour by promoting positive influences both from work-to life and from life-to-work. On the one hand, a company can promote environment friendly consumer behaviour in the private life of employees, which can be called work-to-life interventions.On the other hand, companies can encourage employees to use environmentally relevant ideas and experiences they have developed in their private life within their working life which can be called as life-towork interventions. The Dynamics of Green HRM Behaviours There is a knowledge gap which leads to the question, what are the dynamicsof HR managers green decisions and behaviours? HR managers decisions andBehaviours effectuate EM practices and policies (Sharma et al., 1999). Thus, it seemsimportant to understand the unique features of HR managers decisions and behaviourswhich are central to Green HRM, the integration of EM in HRM (Renwick, et al.,2008). This article discusses the use of HRM policies, philosophies, and practicesto promote sustainable use of resources and prevent harm arising from environmentalconcerns within business organizations, Green HRM depends on the unique and identifiablepatterns of green decisions and behaviours of HR managers which are called as green signatures.This definition suggests that HR managers green signatures are either promotive orpreventive. Promotive green signatures refer to the pattern of behaviours and use of HR practices to promote EM while preventive green signatures refer to the pattern ofBehaviours and decisions that prevent negative environmental outcomes. Because HRmanagers make the integration decisions, their green signatures are very importantManagers play a major role in EM (Sharma, Pablo, &Vredenburg, 1999). Their orientationtoward EM is affected by their beliefs, attitudes, goals, and values (Crognale,1999; Tinsley &Pillai, 2006). These green signatures influence environmental management and organizational effectiveness. Green signatures comprise of green decisions and behaviour. While green decisions refer to the formation of intentions and volitions of HR managers to use policies and practices to promote or prevent harm to EM, green behaviours refer to the EM-related role behaviours of HR managers. This view is consistent with promotion and prevention indecision-making (Crowe & Higgins, 1997). Managers with positive effect (i.e., favourable views of EM) are likely to form decisionsthat motivate employees to exhibit green behaviours; drive the energies of employeestowards innovative processes and products, and lead them to form green decisions andadopt role behaviours that advance EM and organizational objectives. Self-monitoring refers to the process through which individuals regulate their own behaviour in order to look good so that they will be perceived by others in a favourable manner (Snyder, 1974). High self-monitoring managers may be concerned about the appropriateness of HRs response to green decisions. They may also compare their own EM-tendencies with those of other managers which may lead them to transform their decisions to green role behaviours. Low self-monitors, on the other hand, may be less concerned and therefore less likely to transform green decisions to green behaviours. Self-efficacy which generally refers to an individuals belief in his/her capability to perform a task or function in a certain manner to attain desired goals has several variants (Bandura, 1997). In this paper, we refer to it as green self-efficacy defined as managers belief about their capability to transform green decisions to green role behaviours. Companies like Honda, S.C. Johnson, Goldman Sachs, Starbucks, Patagonia, Timberland, and GE have successfully used their environmentally friendly policies to sell their product and gain media exposure. It is obvious that there are environmental benefits by going green .But there are often a variety of economic and social benefits as well.Do not put off by the initial investment of going green.There are, often incentives to offset the cost.These benefits might come sooner than you think 1276

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However, until recently, few organisations have made a concerted effort to leverage its environmental stance as a critical point in recruiting pitches. Firms like Google and even old-school General Electric have led the way by undertaking major efforts to make being environmentally friendly a critical element of their employment brand. Google leads the way not just in its environmental practices but also in publicizing their environmental record and approach. Like many emerging green companies, Google has hired a director who coordinates corporate environmental efforts in an attempt to match their corporate business strategy with their environmental efforts. Some sample programs at Google that support environmental issues include: $5,000 subsidies for employees buying hybrid cars (Timberland offers $3,000) Company dining facilities that serve organic sustainable foods Charitable contributions to organizations that fight global warming On-site farmers markets On-site composting of food waste Use of green fuels and solar power Fully subsidized employee bus pools for commuting employees

4.

Green HRM processes

A. Green Recruiting:Recruitment practices can support effective environmental management by ensuringthat new recruits understand an organizations environmental culture and share its environmental values (Wehrmeyer, 1996). Several surveys conducted in the UK and theUS indicate that graduates and other job applicants pay attention to the environmentalmanagement practices and performance of companies and use such information whendeciding where to seek employment (Wehrmeyer, 1996; Stringer, 2009). Increasing,firms are beginning to recognize that gaining a reputation as a green employer is an effectiveway to attract new talent (Phillips, 2007; Stringer, 2009). The new thrust of green recruiting is proactive and focuses on making greenness a major element of your employment brand. Some of the reasons why green recruiting is becoming more essential include: Gen Y demands it. This generation has learned about the importance of the environment and recycling in classes since elementary school. They filter both product purchasing and job selection choices with their green mindset. Educated class demands it Many job candidates care about it. Although no one has yet quantified the impact that being environmentally friendly has on recruits, if you ask candidates whether working for an environmentally friendly company is important to them, a vast majority will respond with an affirmative. Global candidates can be passionate about it. Some countries around the world are extremely passionate about the environment like Germany, Australia, Finland etc. As a result, if you expect to recruit the best from around the world, you must be prepared to meet a growing set of eco-expectations as an employer. Green recruiting is a chance to differentiate yourself in a recruiting marketplace where standing out from the crowd is already extremely difficult. Incidentally, not only does green recruiting improve your chances of attracting and selling candidates, its also your chance as a recruiter to do your part to improve the environment by showing senior management the dollar impact it has on recruiting, retention, and product sales.

B. Performance Measurement:For current employees, the presence of rigorous metrics for assessing environmentalperformance signals that environmental rhetoric is likely to be backed up with meaningfulaction. In addition to meeting the criteria of reliability, validity, and fairness, effective performance appraisals provide useful feedback to employees and support continuous improvements in the firms environmental outcome C. Training, Development, and Learning: When managers determine that organizational change is necessary to facilitate green HRM, training activities are often among the first area for HRM involvement. A survey of managers beliefs about management best practices that result in employees becoming engaged in eco-initiatives revealed that environmental training and education and 1277

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establishing a culture in which employees feel they are accountable for environmental outcomes werethe most salient HRM practices for achieving environmental goals (Ramus, 2002). Organizations should develop a cadre of managers and executives capable of leading sustainability initiatives and learning throughout the process. The development of skills such as system thinking and negotiation may take years of experience working within a broad ecosystem of stakeholders (e.g., see Worley, Feyerherm, & Knudsen, 2010) D. Compensation and Rewards: Monetary and nonmonetary rewards are another potentially powerful tool for supporting green HRM activities. Nevertheless, developing effective monetary incentives can be challenging due to the difficulty of accurately and fairly evaluating environmental behaviours and performance (Fernandez, Junquera, &Ordiz, 2003). In addition, organizations must strive to find the right balance between the use of motivational carrots and sticks. Among the many HR practices available, incentives and rewards are often presumedto be the most powerful means for connecting organizational interests to employeesinterests.

5.

Greening the organizational culture

Organizational culture is considered a key determinant and indicator or the success orfailure of environmental management programs at companies (Bro, Fernndes, &Junquera, 2007). An organizations culture embodies the main assumptions, values,symbols and activities within an organization that reflect what the employees and topmanagement think about environmental sustainability issues (Harris & Crane, 2002).As research by Govindarajulu and Daily (2004) has shown, top management support is central to a green organizational culture Organizations pursuing a cost-reduction environmental strategy may find that it is more effective to focus on how and in what ways HRM practices can be used to reduce production and labour costs, e.g., by providing training and incentives to encourage recycling andwaste management, supporting flexible schedules and telecommuting, and reducinglong-distance business travel. Efforts to establish a link between environmental management practices andpositive financial outcomes have been somewhat fruitful (e.g., Ambec&Lanoie, 2008;Sharfman& Fernando, 2008). There are evidences to suggest that firms can expect to seean increase in their market value when they announce that they are adopting environmentalmanagement systems such as ISO 14001 (e.g., see Jacobs, Singhal, & Subramania, 2010; Gonzlez-Benito & Gonzlez-Benito, 2008).

6.

Financial benefits of being green in service sector

Porter argued that pollution is often associated with a waste of resources (material, energy, etc.), and that more stringent environmental policies can stimulate innovations that may offset the costs of complying with these policies. In fact, there are many ways that improving a companys environmental performance can lead to better economic or financial performance, and not necessarily to an increase in cost. To be systematic, it is important to look at both sides of the balance sheet: increasing revenues and reducing costs. In the literature, one can find conceptual or theoretical arguments outlining seven opportunities companies can make use of to either increase revenues or reduce costs while at the same time being responsible with the earths resources (Lankoski, 2000, 2006; Reinhardt, 2000).Better environmental performance can lead to an increase in revenues through three channels: (1) better access to certain markets; (2) differentiating products; and (3) selling pollution control technology. Second, better environmental performance can lead to reductions in cost in four categories: (4) risk management and relations with external stakeholders; (5) cost of material, energy, and services; (6) cost of capital; and (7) cost of labour. Firms in the service sector are facing growing pressure to become greener. Various stakeholders (consumers/purchasers, investors, bankers, NGOs, and so on) press companies to reduce their negative impact on the environment. This is now seen as firms social responsibility, what businesspeople often refer to as corporate social responsibility (Friedman, 1970; May et al., 2007). In various industries, firms must try to cope with these pressures while staying competitive. Firms can try to reduce their environmental impacts without hurting their economic performance by implementing an ambitious innovation strategy. Such an approach would include one or more of seven strategies that could result in increased revenues or reduced costs. Advantages of telecommuting in service sector Teleworking solutions support moving toward a green work culture, and also provide solid business benefits. 1278

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Commute time for 100 workers equals 23,333 hours per year, with a time value of $700,000 per year (US Department of Transportation). Telecommuting saves an average of 52 minutes of commuting per day as well as an $840 gas expenditure per year (Department of Transportation). 33% of workers select employers offering flexible schedules over those who do not offer telecommuting (Robert Half International Survey). Telecommuting increases productivity by 31% based on fewer disruptions, less stress, and reduced commuting time (British Telecom Internal Survey). Office space can cost $6,000 per worker per year, based on square foot costs across US office space used per worker. Telecommuting can cut real estate costs by 25% to 90% (PC World). Avaya then initiated a plan to hire teleworkers globally, while avoiding business disruption. As a result: Carbon emissions were reduced by over 8,000 tons per year through reduction of employee travel by over 15 million miles annually. Over 2,200 employees are full-time teleworkers. 75% of Avayas employee base telework at least part of the week. Teleworkers collaborate as effectively from a remote work site as they do when in the office. Avaya experienced zero down time during Hurricane Charley

Improved employee retention translates in to low replacement costs : Many green companies these days boast low turnover rates compared to their non-sustainable counterparts. That's not just talk. In a green workplace survey conducted by the Society for Human Resource Management (SHRM), 61 percent of respondents who worked for an environmentally conscientious company said they were "likely" or "very likely" to stay at the business because of those practices

7.

Lessons learned from my own experience as an owner-manager of an SME in service sector

Generally speaking, green HRM and environmental sustainability are considered as hype in entrepreneurial firms and SMEs and considered as jargons for false prestige. My experience as an entrepreneur differ on this view point. New generation employees value the concept of environmentalism and they are very eager to contribute towards that . I found that there are a number of reasons why it makes good business sense to raise environmental awareness and communicate environmental successes, as follows: It improves environmental performance. It develops staff ownership of companys environmental goals. It enhances compliance with environmental obligations. It encourages employees to make further changes that will be acknowledged by the company and other stakeholders. It highlights environmental challenges to staff. It changes attitudes of staff and other stakeholders and the attitude of the employees towards the employer. It produces cost savings. In small businesses owner-managers have an important role to play in raising environmental awareness. While a member of staff may have specific responsibility for overseeing environmental management issues, the initiative to promote and sustain environmental awareness internally and externally needs to come from the owner-manager level. By adopting this approach, an owner-manager is making a commitment to incorporate environmental issues into existing management systems. Small businesses should always maximise the potential of the human resources available to them and the environment management and green HRM surely helps in that direction.

8.

Summary and Conclusion

The conventional wisdom about environmental protection and hence green HRM is that it is an extra burden imposed on companies by government. However, during the last decade, this paradigm has been challenged by a number of analysts who have suggested ways in which improving a companys environmental performance can be associated with better economic performance in service sector. Industry leaders in service sector like Southwest Airlines, TCS, UPS and Google exemplify long-term investment in employees and commitment to high-involvement work with fair wages (OToole & Lawler, 2006). These companies share a business model that involves employees in decision making, rewards employees fairly, and provides training and career opportunities. They have higher productivity and ultimately 1279

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higher profits than comparable low-wage companies in their industries. When workers are encouraged to participate in decision making, training, profit sharing, and stock ownership they are more productive which offsets higher costs for salaries and benefits (OToole & Lawler, 2006),making the organisation competitive in the market place. Positive financial outcomes are more likely to be experienced in firms that effectively align their HRM systems to support their environmental initiatives. Gradually, leading firms around the world are beginning to shift from reliance on processes that exploit the environment toward those that are environmentally sustainable (Schot& Fischer, 1993; Winn, 1995). Better environmental performance can lead to an increase in revenues through three channels: (a) better access to certain markets; (b) differentiating products; and (c) selling pollution control technology. Second, better environmental performance can lead to reductions in cost in four categories: (a) risk management and relations with external stakeholders; (b) cost of material, energy, and services; (c) cost of capital; and (d)cost of labour. Socially responsible and sustainable service sector organisations who employs green HRM practices reap benefits by attracting and retaining good employees.Improved employee retention translates in to low replacement costs. Many green companies these days boast low employee turnover rates compared to their nonsustainable counterparts. They have advantages since they take a longer term view that includes employee stakeholders and make financial gains in the process. This is all the more important in an economy in which resources are depleted, operations are globalized, and where the right people make the difference between success and failure on a long term basis in a competitive marketplace in service sector-to survive, to sustain and to flourish.

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