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The Impact of Human Resource Management Practices and Corporate Sustainability on Organizational Ethical Climates: An Employee Perspective

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Abstract

The increasing challenges faced by organizations have led to numerous studies examining human resource management (HRM) practices, organizational ethical climates and sustainability. Despite this, little has been done to explore the possible relationships between these three topics. This study, based on a probabilistic sample of 6,000 employees from six European countries, analyses how HRM practices with the aim of developing organizational ethics influence the benevolent, principled and egoistic ethical climates that exist within organizations, while also investigating the possible moderating role played by their employees’ perception of corporate sustainability. Findings demonstrate that ability-enhancing practices (i.e. recruiting, selection and training) and opportunity-enhancing practices (i.e. job design, industrial relationships and employee involvement) improve benevolent and principled organizational ethical climates, while motivation-enhancing practices (i.e. performance management, compensation and incentives) rather than being related to these organizational ethical climates, are linked to the egoistic climate. In addition, the perceptions of the company’s employees in terms of corporate sustainability moderate these relationships, by reinforcing the positive relationships of ability-enhancing and motivation-enhancing HRM practices in terms of benevolent and principled ethical climates and by reducing the positive relationships between motivation-enhancing practices and egoistic climate. Specific implications for HRM research, teaching and practice are then advanced and discussed.

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Abbreviations

HRM:

Human resource management

AMO:

Ability, motivation, orientation

PLS:

Partial least squares

ECQ:

Ethical climate questionnaire

CSR:

Corporate social responsibility

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Authors and Affiliations

  1. Department of Social and Political Sciences, Università degli Studi di Milano, Milan, Italy

    M. Guerci

  2. Department of Management, Economics and Industrial Engineering, Politecnico di Milano, Milan, Italy

    Giovanni Radaelli, Stefano Cirella & A. B. Rami Shani

  3. Department of Economics, Management and Quantitative Methods, Università degli Studi di Milano, Milan, Italy

    Elena Siletti

  4. Orfalea College of Business, California Polytechnic State University, San Luis Obispo, CA, USA

    A. B. Rami Shani

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  1. M. Guerci
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  2. Giovanni Radaelli
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Correspondence to M. Guerci.

Appendices

Appendix 1: Questionnaire on HRM Practices Aimed at Developing Organizational Ethics

We would like to ask you some questions about the HRM practices used in your organization. Please answer the following in terms of how it really is in your company, not how you would prefer it to be. Please indicate to what extent your organization implements the following HRM activities. (Never; Rarely; Occasionally; Frequently; Always)

(Ability-Enhancing HRM Practices)

Developing ethical brochures and other materials used to attract job applicants.

Attracting and selecting employees who share the organization’s values.

Hiring employees who exhibit relatively high levels of moral development.

Training interventions that focus on the values of the organization.

Presence of ethical leadership programmes and extensive training on the ethical values of the organization.

Creating cognitive conflict to stimulate independent decisions in ethically ambiguous situations.

Developing employee skills in engaging and communicating with stakeholders.

(Motivation-Enhancing HRM Practices)

Developing performance goals that focus on means as well as on ends, using not only outcome-based, but also behaviour-based, performance evaluations.

Linking bonuses and variable pay to ethical behaviour based on social performance objectives.

Promoting awards for good citizenship (moral behaviour).

Sanctions for managers and employees who breach the organization’s ethical standards.

(Opportunity-Enhancing HRM Practices)

Job design encourages employees to take ethics-related decisions.

Presence of employee volunteer programmes.

Encouraging members to provide solutions when the organization faces ethical problems.

Involving employee representatives and unions in the design, application and review of the ethical infrastructure of the company.

Career mechanism is fair, visible to all and linked to the respect of organizational ethical standards.

Employee surveys in place to monitor the ethical climate of the organization.

Encouraging the reporting of unethical behaviour and supporting whistle-blowing on ethical issues.

Appendix 2: Questionnaire on Employee Perception of Sustainability

We would like to ask you some questions about to what extent you think your company is moving toward sustainability, intended as the dynamic balancing of economic performances, social performances, and environmental performances. Please answer the following in terms of how it really is in your company, not how you would prefer it to be.

What do you believe is the status of sustainability in your companies’ agenda—in terms of management attention and investment—today?

Never considered for the agenda (1)

Excluded from the agenda, because viewed as a passing fad (2)

Temporarily on the agenda, but not core (3)

On the agenda permanently, but not core (4)

Already permanent fixture and core strategic consideration (5)

How has your organization’s commitment towards sustainability—in terms of management attention and investment—changed in the past 3 years?

Significantly decreased (1)

Somewhat decreased (2)

No changes (3)

Somewhat increased (4)

Significantly increased (5)

How do you expect your organization’s commitment towards sustainability—in terms of management attention and investment—to change over the next 3 years?

Will decrease significantly (1)

Will decrease somewhat (2)

No changes (3)

Will increase somewhat (4)

Will increase significantly (5)

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Guerci, M., Radaelli, G., Siletti, E. et al. The Impact of Human Resource Management Practices and Corporate Sustainability on Organizational Ethical Climates: An Employee Perspective. J Bus Ethics 126, 325–342 (2015). https://doi.org/10.1007/s10551-013-1946-1

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  • DOI: https://doi.org/10.1007/s10551-013-1946-1

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