The Effect of Green Human Resource Management on Performance of Small and Medium Industries

Abstract

The purpose of this research is to analyze the relationship among GHRM, green processes, and green products in improving economic performance, social performance, and environmental performance in SMEs. The research method used a structured questionnaire for data collection, where the unit of analysis was the manager or owner of SMEs. The data were analyzed using partial least square structural equation modeling. GHRM has a positive and significant effect on green processes, GHRM has a positive and significant effect on green products, green processes have a positive and significant effect on economic performance, social performance, and environmental performance, and green products have a positive and significant effect on economic performance, social performance, and environmental performance. The research has important implications for SMEs to protect environment and competitive advantage. For example SMEs must increase the awareness of environment to treat the waste properly, green culture and values in the work environment and intensive training and development to increase awareness of environmental care. The research contributes to the GHRM literature by building a business quality model, in which the role of Industry 4.0 was explored.