'Green' Human Resource Benefits: Do they Matter as Determinants of Environmental

Management System Implementation?

Author(s): Marcus Wagner
Source: Journal of Business Ethics, Vol. 114, No. 3 (May 2013), pp. 443-456
Published by: Springer
Stable URL: http://www.jstor.org/stable/23433791
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J Bus Ethics (2013) 114:443-456
DOI 10.1007/s 10551-012-1356-9

'Green' Human Resource Benefits: Do they Matter

as Determinants of Environmental Management System
Implementation?

Marcus Wagner

Received: 29 July 2011/Accepted: 9 May 2012/Published online: 6 June 2012

Springer Science+Business Media B.V. 2012

Abstract This article analyses whether benefits arising

compromising the ability of future generations to meet
for human resource management from environmental their own needs.' Based on this definition and Mariap
panadar (2003) I define sustainability-oriented (short:
management activities drive environmental management
sustainable) human resource (HR) management as a man
system implementation. Focusing on employee satisfaction
and recruitment/retention, it tests this for German manu
agement of human resources (HRs) that meets the current
facturing firms in 2001 and 2006 and incorporates a needs
rare of a firm and society at large without compromising
longitudinal element into the analysis. It confirms positive
their ability to meet any future needs. For the sustainability
associations of the benefit levels for both variables with of firms this implies a requirement to perform financially
environmental management system implementation on (as
a traditionally expected from firms) as well as socially
and environmentally and hence environmental manage
large scale. Also it provides evidence that increasing levels
ment system (EMS) implementation is potentially an
of environmental management system implementation
important means to achieve such 'corporate' sustainability
result from higher economic benefits in the human resource
domain. In doing so the article supplies needed quantitative
(Schaltegger and Burritt 2005). Yet, ever since their con
evidence on important aspects of how sustainability relates
ception, the argument of the uncertain benefits of EMS
to human resource management. (defined for the purpose of this article as a set of common
'Green' practices aimed at improving environmental per
Keywords Environmental management system Humanformance) has also been made and in this respect, the
resource management Benefits Determinants mounting evidence of their limited ecological effectiveness
increasingly suggests, that if benefits of EMS implemen
tation exist, then these are probably mainly of (more or less
Introduction tangible) economic nature (Hertin et al. 2008). Indeed, cost
savings, differentiation potential and intangible ('soft')
The World Commission on Environment and Development
benefits have been frequently suggested in the literature
(World Commission on Environment and Development on circumstantial and case evidence (Hamschmidt and
based
1987, p. 54) defines sustainable development as Dyllick 2001). However, it has rarely been confirmed
development that meets the need for the present without
empirically on a larger scale if such economic benefits are
systematic, especially in relation to 'hard' structural factors
such as past profitability and firm size (Darnall 2003; Bowen
M. Wagner (0)
2002), which constitutes a significant gap in the literature
Department of Economics and Business Administration,
Julius Maximilians University, Stephanstr. 1, that this article contributes to fill. More specifically, benefits
97070 Wuerzburg, Germany related to HRs have been suggested as a particularly
e-mail: marcus.wagner@ uni-wuerzburg.de important category of 'softer' benefits resulting from and
therefore (as will be detailed below) ultimately driving EMS
M. Wagner
Bureau d'Economie Thorique et Applique, Universit de implementation (Wehrmeyer and Parker 1995; Boudreau
Strasbourg, 61 av. de la Fret Noire, 68000 Strasbourg, France and Ramstad 2005). Such benefits constitute an important

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 444 M. Wagner

element of 'Gr
above definition
HR management
mental sustaina
subset of sustai
comprises corp
Given this, in th
of extant litera
benefits on EMS
scale is establis
related benefits
developed. Thes
based on two lar
making use of
(Lundy 1
managem
Review of the Literature porated considerations of competitive advantage, espe
cially in relation to the resource-based view an
The Development of HR Concepts and Implications response to trends of internationaliz
for Their Link to Sustainability (Taylor et al. 1996).
As concerns the former perspective, Schler an
The consequences of global and environmental trends for son (2005) point out issues suc
HR management -defined for the purposes of this article HR management (especially
following Storey (1995, p. 5) as '... a distinctive approach to stakeholders) and identify a nece
employment management which seeks to achieve compet- of stakeholders (shareholders
itive advantage through the strategic deployment of a highly cians, socially concerned indiv
committed and capable workforce, using an integrated array cerns that bear more or less di
of cultural, structural and personnel techniques'can only sustainability (and as part of
be understood against the background of how these two ment) and HR. As a result, an
elements evolved. Global trends are for example increasing notions of sustainability in the c
consumer individualism, demographic ageing, higher in both, instrumental and non
quality and service demands, growing global competition, can be observed (Mariappa
shorter product life cycles and public awareness of social Ramstad 2005; Renwick et al
and environmental responsibility (Emerson 1996). As these From this engagement, a d
categories are often interlinked and virtually permanently ability and HR follows. Firstly, a
changing, separate trends are difficult to identify, for HR function benefits from an
example with regard to gender aspects and environmental sustainability in that such engage
management (Mawle 1996). This makes it very difficult for short-termism and assists renew
a company as a whole as well as for the different business resource base as well as 't
functions to develop a strategic response to them from a Ramstad 2005). Secondly, the
sustainability perspective. involving more strongly elements of HR management in
Whilst especially the HR function is instrumental in implementing corporate sustainability leads to
implementing organisational change aimed at adapting to formance and more success with regard t
new requirements for firms and therefore also a potentially (Renwick et al. 2008). The process-oriente
important contributor to such a strategic response, it needs resounds well with this duality and the notion
to be acknowledged that the intersection of sustainability, means to assist addressing a wider stakeho
the natural environment and HR management is new area holds particular relevance for environmental man
in fast development and therefore not characterized by a which has been shown to matter more for
fully developed body of writings (Jackson et al. 2011). aspects such as employee recruitment than oth
Given this and the complex and evolving macro-trends of corporate social performance (Backhaus e
outlined above, reviewing the literature to define a state of Given this, the remainder of the article focuses
the art in this area can only be approximate and of limited aspect with a concise review of 'Green' HR
temporal validity. literature as the starting point.

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 'Green' HR Benefits and EMS Implementation 445

The Link of HR and Environmental

(Huslid 1995). This requiresManagement
a matching between employer
and employee values in the recruitment process and sus
The link of HR and environmental management
tainability seems to be a particularly appropriate means to in
corporate context strongly
addressrelates to
these challenges underthe more descri
the circumstances encom
ing relationship between environmental
bed. Ehnert and
(2009) provides empirical evidence econo
of this
from an
performance of firms where exploratory
the analysis of the websites
argument of 50 large
is oftentimes
better environmental performance leads
European firms in service to better
and manufacturing industries econo
by
performance (Orlitzky 2008). From
showing that this
sustainability, it
EMS and CSRis derived
strengths are
implementation of EMSs
used to(Jacobs et of
support the recruitment al. 2010)
new staff leads
and to retain
economic benefits, specifically of the
and motivate existing 'softer',
employees. intang
Branco and Rodrigues
(2009) confirm
type introduced earlier, and here this for smaller and medium-sizedHR-rela
specifically firms in
benefits.1 Portugal.
With regard to such benefits, the link between envi In summary, the literature suggests that when firms
ronmental management and HR can be addressed at the invest in CSR strengths beyond the minimum level legally
strategic as well as at the operational level. At the strategic required, improving the corporate image, employee satis
level, a good corporate image has been suggested to help faction or the ability to recruit excellent staff are oftentimes
attract staff with above-average qualifications and moti important motivations, even though ultimately the hope is
vations (Greening and Turban 2000), making corporate that this would also translate into more tangible benefits
environmental policy crucial for a firm's goal to achieve a such as increased innovativeness of firms and corporate
status of preferred employer (Ramus and Steger 2000) and entrepreneurship (Ramus and Steger 2000). Whilst there
it has been argued that this can be achieved by means of has been research illuminating the relationship between
appropriate signalling because firm characteristics have individuals' perception of benefits and EMS implementa
been shown to associate with HRM practices (Lin tion (Cordano et al. 2004; Cordano and Frieze 2000), firm
nenluecke and Griffiths 2010). level analyses are comparatively scarcer and this article
For example, Egri and Hornal (2002) find that integrationcontributes to fill this gap.
of environmental aspects into HR management and leader
ship styles and values of managers that relate strongly to the
natural environment and corporate responsibility (so called Hypothesis Development
eco-centric styles/values) widen perceptions of organisa
tional performance and create opportunities for integratingGiven that HR benefits have been suggested as a relevant
sustainability more fundamentally in the operations of a and perhaps the most important category of 'softer' bene
firm. Also, attitude changes from one generation of man fits resulting from EMS implementation (Shrivastava 1995;
agers to the next have been observed which potentiallyRamus and Steger 2000), the question arises if such ben
limits the role of eco-centric styles or values and makeefits are an important factor for the level EMS implemen
appropriate signalling of the firm as a whole an important tation (measured here as the number of environmental
task (Ralston et al. 1999). management activities, rather than a binary variable based
Beyond the need for corporate signalling in general, the on standard adoption)? To answer this question the
heightened diversity in employee needs and expectations is assumption is made that actual and expected HR benefits
an increasing challenge for HR managers to gain employee for the firm as a whole correspond and that hence the
commitment. In the context of the resource-based view, acknowledgement of firm-level HR benefits from envi
employees are not solely a factor of production and cor ronmental management is not just socially desirable
porate values must be translated into action in order toresponse behaviour. Furthermore, firms' decisions about
make a contribution to short- as well as long-term profits investment and resource allocation that form the basis for
implementing EMSs precede the realization of economic
1 Whilst analysing the relationship of social performance (i.e. social benefits, and therefore it is also expectations about the level
sustainability) with economic performance has generally preceded theof HR-related benefits such as increased job satisfaction,
analysis of the link between environmental and economic perfor
better employee retention and recruitment of more talented
mance, with the first studies being carried out as early as in the early
1970s (Pava and Krausz 1996), the late consideration of social new staff that lead to EMS implementation (Feldman et al.
sustainability in the context of the HR function is likely due to the late 1997; Jabbour et al. 2008). Assuming firm-level expecta
consolidation of the latter in the corporate context. Several studies tions or perceptions are rational, they should correspond to
have indicated that the causality could also run from economic to
the level of the benefits realized. Figure 1 summarises
environmental performance (Orlitzky 2008) and this is accounted for
these considerations and visualises the theoretical research
when developing hypotheses in that they built on an integrated
perspective with reciprocal causality as the underlying notion model resulting.

Springe

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 446 M. Wagner

l,EMS implementation resulting requirement for firms to compete in recruitment

and retention of employees applicants and job seekers
P (leads to environ
mental performance) naliiig expect firms to adhere to high standards with regard to CSR
and the natural environment (Pudelko 2006). In line with
Expected Realised HR benefits of
this, there is evidence that corporate sustainability posi
HR benefits corresponding wider EMS (result in better
tively associates with applicant interest (Barber and
of EMS mtionnI expectations economic performance)
Roehling 1993) and that a proactive stance of firms towards
natural environment
Fig. 1 Theoretical research model underlying hypothesis development positively associates with them being
perceived as more attractive employers (Bauer and Aiman
Smith 1996). Therefore, the following hypothesis can be
formulated:
Focusing on two frequently suggested categories,
namely worker/employee satisfaction and staff retention/
Hypothesis 2 Benefits for staff retention/recruitment
recruitment (Turbin and Greening 1997; Ramus
associateand Steger
positively firms' level of EMS implementation.
2000; Egri and Hornal 2002; Holtom et al. 2008) hypoth
Next to effects on the level of EMS implementation it is
eses corresponding to the model illustrated in Fig. 1 shall
also important to consider how the change in implemen
be derived in the following.
Environmental evaluation criteria that are enabled tation levels associates with the change HR-related benefits
since this informs about the greening of organisational
through and part of EMS implementation are an important
change (Harris and Crane 2002; Peterson 2004). In addition
mechanism for firms to signal concern for the natural
to this, the effect of changes over time has not been ana
environment and in doing so increasing the satisfaction of
lysed empirically in the literature so far due to the lack of
their employees. Berrone and Gomez-Mejia (2009) in a
data for the same firms at different points in time. The lack
longitudinal analysis of a large number of US firms show
of understanding about such longitudinal effects therefore
that in polluting industries executives are rewarded for
constitutes another important gap that is also acknowl
good corporate environmental performance and other
edged in the existing literature reviews on HRM, sustain
studies have confirmed this for corporate social perfor
ability and the natural environment (Ehnert 2009; Jackson
mance at large (McGuire et al. 2003). Further confirming
et al. 2011). With regard to such temporal changes, one
this signalling mechanism, Gavin and Maynard (1975) find
would expect that firms are more willing to investment in
that work satisfaction is positively associated with corpo
EMS implementation the larger the changes in the rele
rate concerns for the natural environment in the banking
vance of EMS for employer attractiveness and work sat
sector and also in other industries responsible corporate
isfaction are over time which is also one of the arguments
behaviour (including improving environmental perfor
in the context of high-performance work systems (Inmac
mance and implementing EMS) has been shown to have
ulada et al. 2008). Specifically, a positive association of the
positive effects on employee motivation and satisfaction
change in the level of specific HR benefits between 2001
(Bansal and Roth 2000; Riordan et al. 1997; Maignan et al.
and 2006 and the change in the level of EMS implemen
1999) which leads to a first hypothesis as follows:
tation during this time should be observable in longitudinal
Hypothesis 1 Benefits for the work satisfaction of their
data, if indeed HR benefits exist and are not just stated for
employees associate positively with firms' levelreasons
of EMS of social desirability. This which leads to two
implementation. additional hypotheses:

Next to work satisfaction, which essentially relates to an 3 From 2001 to 2006, the change in benefits
Hypothesis
employees' tenure in a firm, worker/staff recruitment andsatisfaction associates positively with the change
for work
retention are important aspects since they refer to the
in the level of EMS implementation.
beginning and the (avoided) end of an employee's tenure
Hypothesis 4 From 2001 to 2006, the change in benefits
and thus help to cover the full entry-to-exit process as has
for staff retention/recruitment associates positively with the
been advocated in the context of 'Green' HR management
change in the level of EMS implementation.
(Renwick et al. 2008). Extant research has shown, that
EMSs are an important element in the broader context of the above hypotheses and hence the actual
Testing
corporate sustainability from a signalling perspective
existenceas
of HR benefits from environmental management
concerns attracting and keeping staff (Albinger and
withFree
large-scale and partly longitudinal empirical data and
man 2000; Greening and Turban 2000; Turbin and in doing so also addressing the call for empirical research
Greening 1997; Backhaus et al. 2002). With the increasing on the links of the HR factors and environmental man
scarcity of qualified workforce from 1980 onwards and the agement (Kaur 2003) is done in the following.

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 'Green' HR Benefits and EMS Implementation 447

Data and Method surveys of corporate and site level managers (Baruch a
Holtom 2008). The second survey was carried out in 200
Sample Selection and Data Collection Of the 581 firms contacted (a sub-sample of the 2001 se
firms plus additions (due to firm exits) from differen
To analyse the above hypotheses, two surveys amongst German stock indices), 169 answered, corresponding to
German manufacturing firms are involved. Thisresponse geo rate of 30 % which is good for online surv
(Baruch
graphical focus is desirable given that most extant work is and Holtom 2008). Despite of the difference
based on data from the US or Southern Europeanresponse (In rates (likely due to the availability of a web-ba
maculada et al. 2008) and because Germany represents tool in 2006) they are above average for both waves.
To assess response bias, the procedures suggested
specific conceptualisations of business ethics (Matten and
Moon 2008; Palazzo 2002). Furthermore, in Germany a
Armstrong and Overton (1977), namely benchmarking
special variant of capitalism is implemented, that differs
wave analysis were adopted. Comparing with data from
from the Anglo-American tradition (Hall and Soskice
Federal Employment Agency (Bundesanstalt fr Ar
2001). Due to the long history of EMS in the country2000)
and and the Federal Statistics Office (Statistisches
long-standing concerns about the environment in the
Bundesamt
gen 2008) it becomes clear, that larger firms w
more than 500 employees are over-represented in t
eral public and in government (BMU 2008; Radkau 2011),
a focus on Germany can also foreshadow developments
responses
in and firms with 151-500 and <150 employees
other countries and provide foresight for corporate only
prac under-proportionally present in the response but t
tices there. bias becomes smaller in the second survey wave. Also l
In the surveys, through a number of questions responses
response by smaller firms is a common finding in comp
were solicited from firms on their EMS implementation,
surveys not only on environmental management (Baum
and Dyllick 2001) and hence has to be considered a
the relevance of environmental management for different
competitiveness dimensions (including HR-related ones),
unavoidable to some degree. Furthermore, since very sm
as well as firm characteristics that are relevant as control and privately owned firms have some share in
variables. responses, it is likely below average for the respo
The surveys were addressed to the environmental man sample analysed in the following.
ager or managing director of the firm, but it was asked that The sectoral distribution in the respondent sample is
the most suitable person would answer the questions. significantly different (j2 = 36.00, p = 0.246) between
Especially in smaller firms oftentimes the managing two survey waves. Furthermore ownership characteris
director responded, whereas in larger firms next to envi were similar across both survey waves. Finally, when f
ronmental managers, also quality managers and HR man lowing Armstrong and Overton (1977) and comparing t
agers provided responses.2 Overall, this should lead to a earliest and latest 10 % of respondents in terms of the
rather conservative and more realistic assessment of ben characteristics no significant differences were found ex
efits compared to a counterfactual benchmark where onlyfor late responding firms being smaller and having sligh
environmental managers respond. To avoid selection biashigher levels of environmental activities.
which was an issue in some extant work (Rennings et al. To reduce the risk of common method bias to the

2006), in both survey waves EMS certification to either the

minimum level possible, the ex-ante measures suggested
EMAS or the ISO 14001 standard was not an inclusion by Podsakoff et al. (2003) were implemented in order to
criterion. reduce socially desirability and item ambiguity and
The first survey was carried out in 2001. Of the 2000
ultimately ascertain content validity. For example, questi
firms drawn randomly from the Amadeus database ofcounter-balanced and scale items were improv
order was
Bureau van Dijk (which contains the full set of manufac
in the pre-test of the survey, which was done with fou
turing firms in Germany as the reference population)
firms and
to ensure that the questions are easily understandab
contacted to participate in the survey, 342 answered,
and the completion time is acceptable.
leading in a response rate of 17.1 %, which is common for of statistical ex post evaluation of the presen
In terms
of common method bias Harman's single-factor test was
applied as suggested by Richardson et al. (2009) to est
2 Grouping the respondent categories in HR-related ones (HR
managers, managing directors, and chief operating officers, which lish whether one single factor accounting for most of t
jointly accounted for 31 % of the respondents in 2001 and 33 % in variance in the data could be identified. It yields 20 facto
2006) and other ones (quality management, environmental manage with Eigenvalues larger than unity, which explain betwee
ment, production) and comparing these and respondents with 8.8 and 3.3 % of the variance in the data. The results are
unknown function by means of ANOVA and Scheff tests shows
that only few significant differences exist. This suggests that it is similar when analyzing the 2001 and 2006 data separately
acceptable to pool different types of respondents in the analysis. and overall provide rather strong evidence against the

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 448 M. Wagner

existence of one
variance in the data. Since there is generally high association between employee
motivation, satisfaction, retention and productivity
Variable Measurement and Analysis Approach et al. 1979; Petty et al. 1984; Trevor 2
of these correlated variables is considered sufficient sinc

To address the hypotheses derived, careful definition results should not vary much for the
especially of the main variables in the analysis is neces- Other benefit categories not rel
sary. This especially concerns EMS implementation as the increased sales, market share, cos
dependent variable. More specifically, whether the rela- increases, improved insurance cond
tionships proposed in hypotheses can be identified empir- to bank loans) are also included as
ically crucially depends on the way the level of EMS They are also derived from ear
implementation is measured. For example measuring EMS (Sharma 2001; Egri and Hornal 2
implementation based on dummy variables capturing into an index with the Cronbach a
whether or not firms have achieved certification or verifi- 2001 and 0.62 for the 2006 data. Whilst these values are
cation according to ISO 14001 or the EU Eco-Management not as high as for the EMS index where the alpha is a
and Auditing Scheme is problematic (Wagner 2008). 0.90, they are considered acceptable reliability levels f
Therefore, to measure the EMS implementation, an index novel instruments (Peter 1979; Peterson 1994).
variable is defined as the sum of a number of individual Next to the two main explanatory variables and rel
activities out of a total of ten (see Table 6 for specific controls, other explanatory factors such as existence
items). The scale of the index hence ranges from zero (no QMS, firm size and firm type are also introduced in
activity is carried out) to ten (all activities listed above are analysis. QMS is measured as a binary dummy variable (y
carried out). The listed activities are the intersection of or no) and was included since cost-saving complementarities
those required by the dominant EMS standards such as ISO to EMS were shown (Darnall and Edwards 2006).
14000 and EMAS and are therefore common to EMS Firm size was included in the analysis as the logarithm
across industries (Florida and Davison 1995) which makes the number of employees and is expected to positivel
the index usable in multi-industry samples such as the one relate with the level of environmental activities (Amato
considered here (Wagner 2007). Amato 2007; Gan 2006). Firm type was included in the
In addition to avoiding ambiguities associated with analysis by means of a dummy variable (yes or no
certification-based measures, using this index has the whether the firm is completely independent becau
advantage to avoid discrimination of smaller firms, since bility has been shown to associate with firm type and
these are less likely to certify an EMS due to higher rela- implementation (Bowen 2000). A further control
five cost. Since a considerable number of small firms included in the analysis was the trend the respondent
responded in the survey this is an area of concern for the facing in its main market. This is because environmen
analysis that is also addressed by defining an EMS index in management benefits from higher growth potential
the way described above. Also, the index is better capable munificence (Dess and Beard 1984; Russo and Fout
than a binary variable to deal with changes in the level of Profitability over the past 3 years was included as a c
implementation over time. variable in the model to account for the effect of slack
As concerns the explanatory variables, the two most resources and for benefits from complementary inv
important ones are recruitment/staff retention and worker that make the implementation of environmen
satisfaction. These are measured following an approach by ment activities more valuable (Waddock and
Sharma (2001) on a five-point scale from very negative to Christmann 2000).
very positive (perceived effects of environmental manage- Finally, even though the ten activities ide
ment). As explained earlier, in the context of HR and sus- as the basis for calculating the EMS index
tainability, retention/recruitment and satisfaction have been dependent variable in this analysis are generic
argued to be the most important benefit dimensions to be that in all manufacturing industries surve
considered (Holtom et al. 2008). For example, Egri and considered a standard for environmental mana
Hornal (2002) suggest a number of organisational benefits are in fact the core elements of the large E
associated with environmental management of which the ISO 14001 and EMAS), industry dummies at
only two HR-related ones are employee turnover and NACE level were included to account for diff
employee morale. Turbin and Greening (1997) show that opment stages across industries. To account fo
corporate social performance positively associates with wave, a year dummy was defined and inclu
organisational attractiveness to future employees and hence analysis which assumes unity if the observation
benefits staff recruitment. Huslid (1995) uses employee survey in 2006 and is zero for an observatio

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 'Green' HR Benefits and EMS Implementation 449

survey in 2001. Table 6 in the appendix lists the item

underlying the variables. overall significant with good explanatory value as is
When testing hypotheses 1 and 2, since 36 firms in the reflected in the high R2 values (for all mo
estimation sample responded to both surveys, relying on effects estimates are to be preferred, based
standard ordinary least squares (OLS) regression may have test). Relative to the benchmark model wit
been problematic (Baltagi 2005) and thus all models are variables (Benchmark), the model with t
estimated using panel regression models, namely random variables added (HR benefits) has a significa
and fixed effects. Both of the latter models have the basic R2. Finally, the model with the interaction
specification of for changes in the effects between 2001 and 2006 (Inter
Ems = a + 'X + c + e , (1) actions) does not significantly improve
shows, work satisfaction and recruitment and staff r
where i = 1, ..., N firms, and t = 1,..., T time periods for are both significantly positively
which data were collected (Johnston and DiNardo 1997). index, in turn supporting hypotheses
Ems,, denotes the EMS index for firm i in period t the controls for firm size, QMS and
(dependent variable), Xit represents the set of independent nificantly positively associated wit
variables, ' the vector of coefficients to be estimated, c, in the expected direction. Also the i
unobserved individual heterogeneity and e, an idiosyn- terms of improved market perfo
cratic error with E[e,\Xc\ = 0. risk and increased operational efficiency is significantly
To decide which of the two models (random or fixed positively associated as is the year dummy for 2006.
effects) is more appropriate, the Hausman test is involved. Comparing the coefficients for two explanatory variables
If the Hausman test is significant, then the fixed effects relating to HR it becomes clear that the effect of worker
model is more appropriate, if not inference can be equally satisfaction is higher and more pronounced than that of
based on the random effects model. To confirm the exis- recruitment/staff retention. Also, when moving from the
tence of random effects, the Breusch-Pagan test is applied model with the two HR-related benefit variables (middle
(Breusch and Pagan 1979). A significant test statistic column of Table 3) to the one with interaction terms (right
implies the existence of random effects and suggests that column of Table 3), the explanatory power does not
standard OLS would be less appropriate. increase significantly, whereas it does when moving from
Reviewing the correlations in Table 1 and the variance the benchmark model to the one including the two
inflation factors (ranging from 1.2 to 4.9) suggest that explanatory variables capturing hypotheses 1 and 2.
multi-co-linearity is not an issue for the analysis. To test Turning to hypotheses 3 and 4, Table 4 (left column)
for significant differences in coefficients between years showing the results of the first differences estimation confirms
interactions of the explanatory variables by year are that, as predicted in hypothesis 3, a change in job satisfaction
included and given the above definition of the year dummy, benefits is significantly positively associated with a change in
positive values of the interaction terms corresponds to an EMS implementation, whereas (counter to hypothesis 4) the
increase of the effect between 2001 and 2006. change in staff retention/recruitment benefits is not signifi
To test hypotheses 3 and 4 only those firms who cantly associated with EMS implementation. Beyond this, a
responded to both survey waves could be used in the switch from not having to having a QMS is also significantly
analysis. A first differences approach (Gan 2006) based on positively associated with EMS implementation. Given that in
OLS regression was employed in which for all variables the analysis HR-related benefits are not fully separated and-as
the change between 2006 and 2001 was calculated. This is also stated earlier- are often acknowledged in the literature to
acceptable, because all of the above interaction terms be difficult to separate in principle (Frank et al. 2004; Riordan
proved to be insignificant. Because industry affiliation did et al. 1997) in a variant of the analysis a joint index of HR
not change over time and since variables represent changes benefits was used (for which the Cronbach alpha was 0.65 for
industry and year dummies could be dropped from the 2006 and 0.72 for 2001).
analysis. Inspection of the correlations in Table 2 and the This seemed to be particularly appropriate and accept
variance inflation factors (ranging from 1.3 to 1.8) indi- able, since specifically work satisfaction has been shown to
cates that multi-co-linearity is again no problem. significantly associate with employee retention (Tett and
Meyer 1993; Trevor 2001) and with employee productivity
(Judge et al. 2001; Christen et al. 2006). As Table 4 (right
Results column) shows, when considering the index of joint HR
benefits in the first differences model for the matched
Tables 3 and 4 show the results for the estimation of the observations between 2001 and 2006, the results
models with separate explanatory HR variables for three qualitatively stable, suggesting that also the effe

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 450 M. Wagner

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 'Green' HR Benefits and EMS Implementation 451

Table 3 Estimation results for

Variables Benchmark HR benefits Interactions
panel data with HR items,
dependent variable: EMS index Firm size 0.471 (0.107)*** 0.469 (0.102)*** 0.642 (0.159)***
Quality management system 1.868 (0.529)*** 1.826 (0.503)*** 1.787 (0.577)***
Profitability 0.079 (0.227) 0.037 (0.216) 0.138 (0.286)
Market development 0.138 (0.199) 0.039 (0.190) 0.107 (0.238)
Firm type -0.787 (0.390)** -0.627 (0.372)* -0.982 (0.486)**
Other benefit index 2.141 (0.592)*** 1.305 (0.581)** 1.742 (0.719)**
Work satisfaction benefits -

1.104 (0.3
1.178
Recruitment/retention
0.9120.912
(0.366)
(0 -

Year 2006 0.808

dummy(0.344)**
1.027 (0.332
1.684 (0
Number of employees
0.642
x (0
y
QMS x year -

2006
-

- 0.620 (1.063)
Profitability x year 2006 - -

-0.200
Market development
-

x
-0.337y
Firm type -

x 2006
-

0.633 (
Satisfaction - -

0.132
benefits x (
ye
Recruit./retention-0.036 (0.831)
benefi - -

Constant -4.118 (2.975) -8.052 (2.928)*** -11.790 (3.569)***

R2/change in R2 over last model 0.369 0.060*** 0.009
Wald test 151.65*** 194 79*** 206.09***
23.74
Joint significance test for industry dummies 25.51 1.15

n = 280; * p <0.1; ** p < 0.05; Hausman test 23.30 23.83 31.67

*** p < 0.01; robust standard Breusch-Pagan test 4.55** 4.90** 3 95***
errors in parentheses

Table 4 Estimation results for

Variable Single HR items Joint HR index
first differences data, dependent
variable: EMS index
Change in work satisfaction benefits 0.065 (0.028)** -

Change 0.052
in (0.
recruit -

HR benefit index -

0.057
Change in -0.009
firm (0.00
-0.001
size
Change in 0.413
quality(0.123
0.415
man
Change in 0.055 (0.030
0.053
profitability
Change in -0.042
market (0.03
-0.044 (0.035)
dev

Matched data for firms Change in firm type 0.139 (0.089) 0.183 (0.095)
Other benefit index 0.074 (0.076) 0.063 (0.074)
responding in both survey
waves, 2001 and 2006 Constant 0.054 (0.046) 0.054 (0.045)**
n = 36; * p < 0.1; ** p < 0.05; R2 0.480 0.444
*** p < 0.01; standard errors in F 2.70** 2.33*
parentheses

temporal changes are unaffected from this change in the beginning. Finally, the results remain qualitatively stable if
model specification. instead of including the two individual variables of market
As Tables 5 shows, the results reported in Table 3 also growth and profitability an index of business co
remain qualitatively (i.e. in terms of significance and sign of used which is constructed as the average sco
the coefficients) the same, when instead of the individual development and firms' past profitability,
items the index of HR-related benefits is used in the modified
model specification. Importantly, the index of joint HR
benefits remains also significantly positive in the model with Discussion and Implications
interaction effects. The results remain also largely stable
when using OLS regression for estimation which, however, To contribute to the firm-level analysis of th
suggests that the panel effects are sufficiently strong to jus- versus 'hard' factors determining the imple
tify the involvement of panel regression methods from the EMS, this article set out to test four hypoth

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 452 M. Wagner

Table 5 Model estimation for

Variables HR benefits Interactions
panel data with HR index,
dependent variable: EMS indexHR benefit index 2.181 (1.132)* 2.266 (0.615)***
Firm size -0.501 (0.584) 0.450 (0.129)***
Quality management system 5.368 (1.347)*** 1.342 (0.926)
Profitability 1.229 (0.774) -0.141 (0.353)
Market development -0.786 (0.598) -0.185 (0.302)
Firm type 2.050 (1.789) -0.345 (0.577)
Other benefit index 0.816 (1.255) 0.567 (1.017)
Year 2006 dummy 1.160(0.609)* -1.312 (0.368)***
HR benefit index x year 2006 -

-0.238
Number of -

0.18
employee
QMS x -

year 20
0.319
Profitability -

x -0.266 (0.452)
year 20
Market development x year 2006 -

0.32
Firm type -

-0.764
x (0.733) yea
Other benefit index x year 2006 -

1.173
Constant -5.690 (5.357) -3.946 (4.187)
J?2/change in R2 over last model 0.059*** 0.017

F test/Wald test 2.23* 209.15***

Joint significance test for industry dummies 0.76 24.94

n = 280; * p< 0.1; ** Hausman test 34.07** 26.29

p < 0.05; *** p < 0.01; robust 5.17** 5.17**
Breusch-Pagan test
standard errors in parentheses

from an often-made argument about the link of HR and management (Boudreau and Ramstad 2005) and to elev
environmental management, namely that EMS implemen- sustainability (and as part of this, environmental ma
tation relates to competitive benefits for HR management. ment considerations) to a strategic level, as far as the HR
Based on two surveys amongst German manufacturing function is concerned (Mariappanadar 2003), which m
firms carried out in 2001 and 2006, this article supports be more challenging in the German context given th
three hypotheses claiming a significant positive association important role of mimetic processes for integrating CSR
between EMS implementation and work satisfaction and and HR (Matten and Moon 2008).
recruitment/staff retention benefits, and a positive associ- As another important contribution supporting corporate
ation of the change in work satisfaction benefits with the practice the analysis presented here shows that work sat
change in EMS implementation levels, respectively. isfaction benefits are a potentially stronger and more p
In doing so it helps filling the important gaps in sistent predictor of EMS implementation than recruitme
knowledge and extant literature described earlier and thus retention considerations and 'hard' structural factors such
extends the state of the art in this research field for future as past profitability, especially given that in the first d
study to build on. Specifically, the article from an academic ferences model the index for joint HR benefits is signif
perspective contributes rare large-scale and partly longi- cant, whereas staff recruitment and retention on its own i
tudinal evidence for the hypothesized relationships and found to be insignificant. One explanation for this coul
confirms that the observed effects are salient relationships that retention or recruitment benefits have increasingly
and not limited temporal phenomena. In particular, the become a hygiene factor in the sense of Herzberg et
results reported here support the empirical findings of In- (1999) that is implemented in most firms (whereas work
maculada et al. (2008), which confirm they are not an satisfaction benefits remained a motivating factor). Wh
artefact of the geographical focus of specific data analysed. with the data at hand this cannot be tested directly, in t
Also the article replicates findings of earlier work (e.g. 2001 survey only 13 % of the responding firms stated
Gavin and Maynard 1975) and in doing so contributes to they had implemented such activities in the HR functi
thecompared to corporate social performancemore Given the raising ecological exposure of the HR functi
limited evidence on corporate environmental performance. (PWC 2010), the share of firms with activities in th
As concerns HR and environmental managers, the arti- HR departments has likely increased since then a
cle contributes by confirming a need to put sustainability at due to saturation the differentiation potential within t
the centre of future paradigm development in HR HR function may have decreased. Additionally an

<) Springer

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 'Green' HR Benefits and EMS Implementation 453

independent from this trend, the rise in EMS imp

tation levels between 2001 and 2006 could have red
the differentiation potential for staff recruitme
retention to a larger degree than that of work sat
which is more relevant for employees' day-to-day
However, it is also possible, that the strong stan
worker protection rights in Germany simply mak
aspect less relevant for firms there (Preuss et al. 200
Finally, this research contributes as another import
practical implication the increasing interrelation o
ronmental management and work satisfaction as
for strategic integration of sustainability-related top
as health and safety and work-life quality in firm
et al. 2008). Involving the HR function in this pro
make an important contribution to the creation o
complex, causally ambiguous and difficult-to-im
resources that ultimately increase competitive a
(Branco and Rodriguez 2006). This important find
should also inform teaching of HR management s
can help developing appropriate HR strategies for
in the increasingly stronger competition for high-pe
ing staff (Bhattacharya et al. 2008). An important im
cation emerging from this insight is whether sp
characteristics of national business systems with reg
HR aspects align or are at odds with a secular tren
increasing competition for skilled labour and giv
long German tradition of industrial relations and
unions this issue is of heightened importance here (P
et al. 2006). or other sustainability challenges (Muster and Schrder
2011). Therefore, future research should try to
more detail such indirect effects of linking HR
Limitations and Suggestions for Future Research ronmental management since th
is crucial for an overall assessment of corporat
As one limitation of this research and hence an area for mental management activit
future work it needs to be acknowledged that some vari- work-life balances,
ables used are only based on self-reported and perceived
evaluations. Future research should attempt to measure
these variables more independently from respondents' Appendix
perceptions to corroborate our findings (see Gond et al.
(2011) for a possible approach). See Appendix Table 6.

Table 6 Overview of survey questions and items used (DV: dependent, IV: independent variable)

EMS index (DV): Please specify which activities your company has undertaken in the last 3 years (yes/no): writte
procedure for identification and evaluation of relevant legal requirements, initial environmental review, measurab
programme to attain measurable environmental goals, clearly defined responsibilities, environmental training prog
goals are part of a continuous improvement process, separate EHS report/statement, auditing system to check the en
Benefits (IV): Specify the effects of your firm's activities on the following factors (5-point scale: very negative, nega
very positive) for the items: work satisfaction, recruitment/staff retention; market share, higher sales, cost saving
better insurance conditions, better bank loan access

QMS (IV): Did your company acquire a quality standard, ISO 9000 series or similar? (yes/no)
Firm size (IV): Please specify/estimate the total number of people who are presently employed by your company
Firm type (IV): Is your company in any way part of a larger company or is it completely independent? (yes/no)

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 454 M. Wagner

Table 6 continued

Profitability (IV): In
been? (5-point scale:
excess of costs)
Market developmen
significantly, declin

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