HUMAN RESOURCE MANAGEMENT ASSESSMENT

 

The summative assessment will assess not only your knowledge of the topics covered in the course but also your own learning experience developed during the semester. The final task is composed of two parts. Part A is a theoretical reflection and part B an annotated bibliography.

Part A: Theoretical reflection – The first part of the assignment will require you to respond to a total of two (2) questions regarding your understanding of the main theories in the field of human resource management as well as your awareness of how they may be applied in practice, including how they shape the development of your own skills. Both answers need to be essays style and no more than 1500 words in total. Each answer will be worth 10 marks, for a total of 20 marks.    

Part B: Annotated bibliography – The second part of the assignment requires you to cite, read, summarise, and analyse two (2) articles addressing one or more topics done during the semester. Each article will be worth 10 marks, for a total of 20 marks. 

Assessment Criteria for Assessment Task 3 – Summative Assessment:  
• Appropriate understanding and effective use of the relevant literature.
• In-depth evaluation of your own experience and learning.
• Presentation of logical and cohesive discussion that provides evidence of critical and analytical thinking. 

• Ideas and assertions substantiated through reference to theoretical material and key academic perspectives/views. 
• Clear and comprehensive written style to convey meaning as well as professional use of RMIT Business referencing (harvard style)

HRMHuman Resource ManagementBUSINESS MANAGEMENTbusiness

BUSM3201 HRM 2120

RMIT Classification: Trusted

BUSM3201 (HRM) – Summative Assessment Semester 1, 2021

This task is in two parts.

Part A is theoretical reflection questions worth 20 marks.

Part B is annotated bibliography questions worth 20 marks.

Part A: Please answer the two (2) questions. Each question is worth 10 marks.

QUESTION ONE

The value and contribution of working in a team has been amply recognized by academics and practitioners. However, some employees are still reluctant to work as a team due to the several dilemmas it might cause. Citing relevant business examples, evaluate these conflicting perspectives. Based on your own experience of teamwork with the HRM subject, did you experience such a value? In what way?

Teamwork has been valued by most organizations. However, some employees find it very hard to work in teams to the following dilemmas;

· The team members may face trust issues, especially when the working teams are new. The teams may not comprise of members with the same working and cultural background. Due to that, some of the employees would find it hard to trust. Lack of trust implies poor group performance. 

· Some of the team members would be more focused on achieving personal goals rather than those of the team. In a business setup, some employees would be focusing more on getting a promotion. They would therefore try to convince the management of their worth at the expense of teamwork. Such employees would have very little interest in group performance. That would lead to the overall poor performance of the organization that relies on working teams. 

· Working in teams consumes much time as compared to individual work. The organization would be in much support of teamwork, but the allocated time for a task is limited. For instance, in a manufacturing industry setup, a certain number of products would be needed, at the end of a certain period. The management would decide to have production engineers work together as a team. That would imply finishing one product and heading to start another. That would take too much time as they get into a frequent discussion on the progress of the work. That would lead to a low number of products per unit time. As a result of that, the management would be in a dilemma on the work of the working teams.

· When employees are working in teams, there is a dilemma of having ‘joyriders’. Some team members would be doing nothing but still getting credit on the group performance. The performing team members would feel demotivated, lowering their performance. That brings in a dilemma of whether working in teams contributes to employees motivation or demotivation,

· There is always a dilemma of employees evaluation when they work in teams. Performance appraisal is needed from time to time. Some of the employees would hide in the tea performance resulting in incorrect evaluation. Retaining poor performing employees is detrimental to the organization. The employers get into a big dilemma of the worth of having employees work in teams.

· When employees work in teams, personality issues may arise. The team members have different personalities, and that results in a challenging working environment. In a business setup, some employees would be perfectionists while others would have less attention to details personality. Such a team would find it very difficult to operate.

References.

https://toughnickel.com/business/Disadvantages-of-Teamwork-in-the-Workplace

QUESTION TWO

Every company has rules, guidelines, codes of conduct, and values statements aiming to guarantee its commitment to ethical management. Despite this, ethical scandals keep happening in every industry and sector. Besides, people may hold widely divergent normative approaches to make ethical decisions. Citing examples, explain what role (if any) can HRM practitioners play? Do you think ethics is a ‘managers’ matter or ALL adult human beings have a responsibility for it in organisations?

Ethical management ensures that organizations not only put into consideration the legal and economical business aspects but also meets the ethical expectations (Blanchard & Peale, 2011). Human Resource Management(HRM) practitioners play an important role in maintaining ethics with an organization. The HRM practitioners set the ground rules on the code of behavior in the organization. The employees must abide by these rules and, HRM practitioners make a follow up to ensure the rules are followed. They are also responsible for settling disputes regarding unethical behaviors in the organization. Without the practitioners, there would be no regulatory body to ensure ethical behaviors are maintained, in the organization (Turner, Huemann & Keegan, 2008).

All adult human beings have a responsibility for ethical behavior in an organization. Ethics is a collective responsibility for the peaceful coexistence of human beings. Leaving the role to managers only would be very challenging to implement. All adult human beings in any organizational setup should adopt an ethical culture. With the culture embraced by all, it would be easier to implement and retain an ethical working environment that is more productive.

References.

Blanchard, K., & Peale, N. V. (2011). The power of ethical management. Random house.

Turner, R., Huemann, M., & Keegan, A. (2008). Human resource management in the project-oriented organization: employee well-being and ethical treatment. International Journal of Project Management, 26(5), 577-585.

Part B: Please read the two (2) articles provided and answer the following seven (7) questions for each article. Each article is worth 10 marks.

Article 1

Step 1: Bibliographic Details

Q1 How do you cite this article according to RMIT Harvard Business Referencing style?

Step 2: Brief Overview/Description

Q2 Indicate the aim of the study

Q3 Outline the main argument/s and key theory/ies

Step 3: Critical Analysis

Q4 What is the main contribution of the manuscript to both the literature and practitioners?

Q5 What is the main limitation of the study?

Step 4: Statement of Relevance

Q6 In what way does the article relate to the concepts outlined in the course?

Q7 What is your opinion regarding the argument/s expressed by the authors?

Part B – Article 2

Step 1: Bibliographic Details

Q1 How do you cite this article according to RMIT Harvard Business Referencing style?

Step 2: Brief Overview/Description

Q2 Indicate the aim of the study

Q3 Outline the main argument/s and key theory/ies

Step 3: Critical Analysis

Q4 What is the main contribution of the manuscript to both the literature and practitioners?

Q5 What is the main limitation of the study?

Step 4: Statement of Relevance

Q6 In what way does the article relate to the concepts outlined in the course?

Q7 What is your opinion regarding the argument/s expressed by the authors?

Sustainable Human Resource Management with Salience
of Stakeholders: A Top Management Perspective

Maria Järlström1 • Essi Saru2 • Sinikka Vanhala3

Received: 8 May 2015 / Accepted: 21 August 2016 / Published online: 30 August 2016

� Springer Science+Business Media Dordrecht 2016

Abstract The present paper analyses how top managers

construct the meaning of sustainable human resource

management (HRM) and its responsibility areas and how

they identify and prioritize stakeholders in sustainable

HRM. The empirical data were collected as part of the

Finnish HR Barometer inquiry. A qualitative analysis

reveals four dimensions of sustainable HRM: Justice and

equality, transparent HR practices, profitability, and

employee well-being. It also reveals four broader respon-

sibility areas: Legal and ethical, managerial, social, and

economic. Contrary to the prior green HRM literature,

ecological responsibility was largely ignored. The study

also reveals a wide range of stakeholders, specifically,

owners, managers, employees, customers, and employee

representatives, as well as their special roles and require-

ments for sustainable HRM. These findings contribute to

the literature of sustainable HRM by illustrating the

dimensions and broader responsibilities of sustainable

HRM as seen by top managers. Their conceptions of sus-

tainable HRM are largely neglected in the prior literature

despite their crucial role in legitimating HRM and thus

sustainable HRM in companies. These results also

contribute to the theory of stakeholder salience (identifi-

cation and prioritization of stakeholders) in the sustainable

HRM context from the viewpoint of top managers.

Keywords Green HRM � HRM � Sustainable HRM �
Stakeholders � Qualitative approach

Introduction

Based on the foundation of business ethics debates, cor-

porate social responsibility (CSR) and the ethical aspects of

human resource management (HRM) have received

increasing attention among scholars (Cooke and He 2010;

de Gama et al. 2012; Gond et al. 2011; Greenwood 2013;

Morgeson et al. 2013; Waldman and Siegel 2008). This

attention is mainly due to the growing interest of different

stakeholders in corporate-level issues, such as the treatment

of employees, environmental pollution, and financial

transparency. In CSR statements, companies try to define

what responsibilities businesses need to fulfil (Jamali

2008). Correspondingly, the economic, legal, ethical, and

philanthropic (or discretional) responsibilities of CSR have

been identified (Carroll 1991). While most research on

CSR and sustainability has focused on the macro level of

analysis (see Morgeson et al. 2013), Jamali et al. (2015,

p. 126) suggested that ‘‘HRM can potentially provide a

promising managerial framework that can support organi-

zational efforts in translating CSR strategies into practical

managerial actions and outcomes’’. A relatively new

research area of sustainable HRM has also appeared

(Clarke 2011; Ehnert 2009a; Ehnert et al. 2014), namely,

one that connects corporate sustainability to HRM prac-

tices to explore the role of HRM in integrating general

corporate sustainability practices and strategies within

& Maria Järlström
maria.jarlstrom@uva.fi

Essi Saru

essi.saru@utu.fi

Sinikka Vanhala

sinikka.vanhala@aalto.fi

1
University of Vaasa, Post Box 700, 65101 VAASA, Finland

2
Turku School of Economics, University of Turku,

20014 TURUN YLIOPISTO, Finland

3
Aalto University School of Business, Post Box 2

123

0,

00076 AALTO, Finland

123

J Bus Ethics (2018) 152:703–724

https://doi.org/10.1007/s10551-016-3310-8

http://crossmark.crossref.org/dialog/?doi=10.1007/s10551-016-3310-8&domain=pdf

http://crossmark.crossref.org/dialog/?doi=10.1007/s10551-016-3310-8&domain=pdf

https://doi.org/10.1007/s10551-016-3310-8

organizations (Ehnert et al. 2016). Hence, sustainable

HRM seeks to develop sustainable business organizations

and create sustainable HRM systems in those

organizations.

The research on sustainability in HRM covers numerous

related topics, such as sustainable HRM (Ehnert 2009a, b;

Zaugg et al. 2001), socially responsible HRM (Cohen 2010;

Cohen et al. 2012; Hartog and Muller-Camen 2008), green

HRM (Jabbour and Santos 2008; Jackson and Seo 2010;

Jackson et al. 2011; Renwick et al. 2008, 2013, 2016), and

strategic environmental HRM (Egri and Hornal 2002). The

plurality of the concept and its theoretical frameworks can at

least be partially explained by the short history of the sus-

tainability debate. The following original and broad defini-

tion for sustainable HRM was recently presented by Ehnert

et al. (2016, p. 3; Ehnert 2009a):

…the adaption of HRM strategies and practices that
enables the achievement of financial, social and

ecological goals, with an impact inside and outside of

the organization and over a long-term time horizon

while controlling for unintended side effects and

negative feedback.

This definition is open to multiple goals and complex

relationships between HRM systems and their internal and

external environments (e.g. Schuler and Jackson 2014)

leading one to the so-called open-system model of

HRM

with HRM stakeholders (Beer et al.

2015).

The stakeholder approach within HRM addresses the

issue regarding to whom business or HRM is (or should be)

responsible (Freeman 1984; Freeman et al. 2004). A widely

cited theory of stakeholder salience deals with the identi-

fication of key stakeholders based on the attributes (legit-

imacy, power, and urgency) possessed by these

stakeholders (Mitchell et al. 1997). Despite this recent

interest in stakeholders by HRM scholars (Beer et al. 2015;

De Prins et al. 2014; Ehnert 2009a; Guerci et al. 2014;

Jackson and Schuler 2003; Slack et al. 2015), stakeholder

theory still remains almost absent from the theoretical

discussions on HRM and sustainable HRM (e.g. Guerci

et al. 2014; Van Buren III and Greenwood 2011). Corre-

spondingly, there is a lack of knowledge on stakeholder

salience in the HRM context. For instance, Guerci et al.

(2014, p. 218) claim that a stakeholder perspective ‘‘pre-

sents a potential new insight in developing a deeper level

understanding of sustainability and sustainable develop-

ment’’. Accordingly, one reason for invoking the stake-

holder perspective in HRM is to confer legitimacy. Like

other management systems in an organization, the HRM

system needs to consider its stakeholders in order to be

perceived as legitimate (Guerci and Shani 2013, 2014;

Jackson and Schuler 2003; Ulrich and Brockbank 2005).

Clearly, HRM can serve multiple stakeholders (e.g.

employees, customers, and society), not just the owners of

companies (Beer et al. 2015; Lindström and Vanhala 2013;

Mariappanadar 2003). Therefore, sustainable HRM has

responsibilities to fulfil towards its stakeholders and a

responsibility to satisfy the expectations of all key

stakeholders.

The purpose of this research effort then is to increase the

knowledge of sustainable HRM, its definition, and its key

stakeholders as perceived by top managers. In order to

examine this research theme, this study used qualitative

data collected from 538 top managers. Our two research

questions are

as follows:

(RQ1) How do top managers construct the concept of

sustainable HRM and

(RQ2) How do they relate sustainable HRM to its

stakeholders?

Top managers were selected as the target group owing to

their critical role in legitimating HR practices, allocating

resources, and influencing within-group agreement in the

organizational hierarchy (Bowen and Ostroff 2004). Further,

it is the role of these managers to interact with all stake-

holders of the company (Jackson and Schuler 2003). The

findings contribute to the literature on sustainable HRM by

illustrating the dimensions and broader responsibilities of

sustainable HRM as seen by top managers, whose concep-

tions of sustainability in HRM are often neglected in prior

literature in spite of the crucial role they play in legitimating

HRM and thus sustainable HRM inside companies. There-

fore, we continue the research stream that has investigated

sustainability reporting practices by the world’s largest

companies (Ehnert et al. 2016) by including the HRM per-

spective in that stream. These findings also contribute to the

theory of stakeholder salience (Mitchell et al. 1997) by

identifying those stakeholders in a sustainable HRM context

from the point of view of top managers.

The paper begins by describing the scope of sustainable

HRM, and how it adds new elements to the mainstream

discussion of unitary and pluralist HRM (see De Prins et al.

2014). The second part of the paper focuses on the prior

HRM and stakeholder literature. Then we present the data

and methodology for this research effort, after which the

empirical results are illustrated. The paper ends with a

discussion and conclusions. Limitations of the paper and

future research prospects are also discussed.

The Scope of Sustainable HRM

This section focuses on the emerging research field that is

sustainable HRM. There are several academic roots for

sustainability in HRM, and many research areas and

704 M. Järlström et al.

123

disciplines that contribute to this research area (for a

review of them see Ehnert et al. 2014). Sustainable HRM is

an umbrella term that covers multiple dimensions, multiple

levels of analysis, and a certain form of dynamics over time

(Ehnert and Harry 2012). It can be seen as an extension of

strategic HRM (Ehnert 2009a), which has already been

defined as ‘‘the pattern of planned Human Resource

deployments and activities intended to enable the firm to

achieve its goals’’ (Wright and McMahan 1992, p. 298).

This strategic HRM discussion encompasses an ongoing

debate over whether HRM should be soft (Beer et al.

1984, 2015), or hard (Fombrun et al. 1984; Greenwood

2002; Legge 2005). The soft HRM perspective is more

employee and development oriented, emphasizing the role

of the HRM system within an organizational and broader

societal context and stressing both short-term goals (e.g.

performance) and long-term goals (e.g. individual well-

being and societal impact). However, while the soft or

Harvard model represents rather idealistic goals for HRM,

it also ignores the basic ethical values that can contribute to

achieving those goals (e.g. individual well-being, organi-

zational effectiveness, and societal well-being). It also

appears that the sustainable HRM discussion has taken this

soft HRM perspective to a new level. Sustainable HRM has

been suggested for addressing the shortcomings of soft

HRM by offering insights into the positive relationships

that exists between HRM and financial performance, by

addressing the influence of different stakeholders within

and beyond organizations, and by acknowledging the

ambiguities that are associated with HRM practices and its

outcomes (Ehnert and Harry 2012;

Kramar 2014).

The basic concept underlying the sustainable HRM

discussion is that firms seek different kinds of outcomes to

satisfy their stakeholders’ expectations. These outcomes

may be economic, social, human, and ecological, and firms

often seek them simultaneously although any one of the

outcomes may be more important to an organization than

others (Carroll 1991). Thus, sustainability in HRM is much

broader and more encompassing than just environmental

outcomes. Environmental outcomes, however, are in the

interest of Green HRM (Jabbour and Santos 2008; Jackson

and Seo 2010; Jackson et al. 2011; Renwick et al.

2008, 2013, 2016). Typically, the role of green HRM is

either seen as supporting environmental management (EM)

by affecting the atmosphere or focusing on organizational

culture toward EM targets, or it is seen as manifesting itself

primarily in HRM practices that are aimed at reducing

carbon footprints by printing or travelling less or adopting

other environmentally responsible

practices.

A variety of HRM practices are related to sustainable

HRM discussion, including collaborative HR development,

organizational design facilitating employee participation,

open communication, work roles, and performance

evaluation focused on building employee strengths and

facilitating performance (Browning and Delahaye 2011;

Donnelly and Proctor-Thompson 2011; Ehnert 2009a;

Guerci and Pedrini 2014; Wells 2011). These practices may

develop trust between employees and managers, if con-

sistent messages are delivered to employees (e.g. Bowen

and Ostroff 2004; Guerci and Pedrini 2014). Correspond-

ingly, those scholars focusing on sustainable work systems

(SWS) (e.g. Docherty et al. 2002, 2009) are interested in

the development of HRM practices that result in positive

human or social outcomes, such as facilitating a work–life

balance, but also organizational economic outcomes and

sustainable change processes. Further, HR bundles, such as

high performance work systems or high performance

practices, have also been adopted via the sustainable HRM

discussion (Kramar 2014; Van

De Voorde et al. 2012).

The HRM system, which refers to the overall configu-

ration or aggregation of HRM practices (Bowen and

Ostroff 2004), is relevant for the success of the organiza-

tion in a broad sense. Therefore, in the models or frame-

works of sustainable HRM (De Prins et al. 2014; Ehnert

2009a, 2014; Kramar 2014), HR practices are often linked

to the broader corporate sustainability framework. These

models illustrate the elements, practices, outcomes, and

stakeholders involved in this ongoing sustainability dis-

cussion. Ehnert’s model (2009a, 2014) includes the notion

that these internal and external drivers will lead each

company to having a customized sustainability strategy.

The sustainability strategy then includes corporate-level

objectives that guide HRM and those objectives and

activities through which the strategy is executed. The

model targets multiple outcomes.

Kramar (2014) further developed the model of Ehnert

(2009a) by taking into account the literature on negative

externalities (Mariappanadar 2003, 2012) and sustainable

work systems (Docherty et al. 2009). Kramar’s (2014)

model recognizes that HRM practices (or processes) will

have both negative and positive outcomes for different

stakeholders. Further, the model by Kramar (2014)

demonstrates the organizational, social, individual, and

ecological outcomes of sustainable HRM. Contrary to

Ehnert (2009a), Kramar (2014) also includes ecological

outcomes in his sustainable HRM model.

Interestingly, neither of these models directly includes

economic or financial outcomes, but they do include sus-

tained competitive advantage, innovativeness, and pro-

ductivity that can be indirectly interpreted as financial

outcomes. Likewise, these models do not include any dis-

cussion of the responsibilities of sustainable HRM like that

occurred in sustainability and CSR discussions (Carroll

1991; Jamali 2008). In the CSR discussion, these respon-

sibilities are seen to be economic, legal, ethical, and/or

philanthropic (Carroll 1991; Jamali 2008). According to

Sustainable Human Resource Management with Salience of Stakeholders… 705

123

Carroll (1991), economic responsibility is a cornerstone of

social responsibility. For economic responsibility, organi-

zations provide a return on investment to owners and

shareholders, jobs and fair payments to employees, and

new products and services to customers. Especially in

HRM, legal responsibility for society is stressed as well.

Organizations and HRM need to ensure that they fulfil the

minimum legal requirements. Although the ethical aspects

of fairness and justice do relate to economic and legal

responsibilities, ethical responsibility also covers ethical

and moral norms (what is right, just, and fair) that rise

above the law and concern the human aspects of HRM in

terms of reflecting stakeholders’ expectations.

Philanthropic responsibility, on the other hand, refers to

those corporate actions and financial resources that the

organization contributes back to the community (e.g. sup-

port for education systems by providing trainee programs,

sponsoring the arts or sport leagues), although not in the

ethical or moral sense. While these responsibilities are

mainly discussed in CSR, which focuses mainly on insti-

tutional-level phenomena, the discussion about sustainable

HRM also includes organizational-level practices. There-

fore, sustainable HRM adds a new angle to the discussion

of the responsibilities of social responsibility.

In summary, the concept of sustainable HRM still

remains ambiguous because of several research streams. To

date, sustainable HRM research has focused mainly on the

positive outcomes the concept can generate and has not

dwelt on the relationship between HRM practices and

ecological or environmental outcomes (Jabbour and Santos

2008; Renwick et al. 2008), or on potential negative human

or social outcomes (Kramar 2014; Mariappanadar

2003, 2012). Elkington (1988) has suggested that compa-

nies should focus on multiple bottom lines (financial,

social, and environmental) to maintain their stakeholder

support. To combine these two elements, we next focus on

HRM and its stakeholders to build a bridge between sus-

tainable HRM and its stakeholders.

Stakeholders of HRM and Sustainable HRM

One of the central discussions when examining the stake-

holder theory relates to the question regarding which

groups or individuals are actually identified as organiza-

tional stakeholders (Mitchell et al. 1997). A stakeholder is

‘‘any individual or group who can affect or is affected by

actions, decisions, policies, practices or goals of an orga-

nization’’ (Freeman 1984, p. 25). Though all stakeholders

can matter, Post et al. (2002, p. 8) suggest that ‘‘the

capacity of a firm to generate sustainable wealth over time,

and hence its long-term value, is determined by its rela-

tionships with critical stakeholders’’. Hence, limited

resources and rationality lead organizations to identify and

prioritize their key stakeholders (Carroll 1991; Freeman

1984; Mitchell et al. 1997; Parent and

Deephouse 2007).

Mitchell et al. (1997) developed a theory of stakeholder

salience. They proposed that salience (i.e. the degree to

which managers pay attention to a stakeholder/s) is

dependent on that stakeholder’s attributes, i.e. power,

legitimacy, and urgency. The more attributes a stakeholder

has, the greater the salience is. From a CSR and sustainable

HRM perspective, power and legitimacy may be critical

attributes (Carroll 1991).

Legitimacy refers to the extent to which a stakeholder

has a justifiable right to make a claim. Suchman (1995)

indeed defined legitimacy as ‘‘a generalized perception or

assumption that the actions of an entity are desirable,

proper or appropriate within some socially constructed

system of norms, values, beliefs, and definitions’’ (p. 574).

Power, on the other hand, is ‘‘the ability of stakeholders to

impose their will on a given relationship through coercive,

utilitarian, or normative means’’ (Parent and Deephouse

2007, p. 2). Stakeholders have more power if they are

organized (Carroll 1991), just like employees in trade

unions. Employees can be identified as high legitimacy

stakeholders (Greenwood 2007; Mitchell et al. 1997). The

practical challenge is how to fulfil the objectives of the

primary stakeholders and at the same time keep all other

stakeholders satisfied (Jamali 2008).

Although the stakeholder theory has attracted interest

among management scholars, it is almost nonexistent in the

theoretical discussions on HRM (e.g. Greenwood and

Freeman 2011; Guerci et al. 2014; Van Buren III and

Greenwood 2011). There are, however, strong arguments

for adopting a stakeholder perspective for HRM (Guerci

and Shani 2014; Guerci et al. 2014), including the con-

ferring of legitimacy and consistency to treat key stake-

holders appropriately to avoid the instrumental approach to

HRM and understand conflicts, and for ethical reasons.

Cleveland et al. (2015) also discuss the manifold stake-

holders served by HRM. Their concept is that the aspect of

humanity should be brought back into the discussion about

the future of HRM. That view might be realized by taking

the needs of multiple stakeholders into consideration so as

to build a healthy and effective organization. Those

stakeholders can include employees and their families and

the communities of which they are a part of.

The call for perspectives on HRM to consider a broad

range of stakeholders has also been echoed elsewhere. Beer

et al. (2015) and Marchington (2015) advise HR

researchers to go beyond the mere economic value per-

spective to consider, among other aspects, HRM practices

in the context of a multi-stakeholder perspective. Hence,

HRM is seen as being important to organizations’ sus-

tainability and environmental targets (Jackson and Seo

706 M. Järlström et al.

123

2010), and for serving the interests of multiple stakehold-

ers. However, Guerci et al. (2014, p. 217) raise dual

questions: ‘‘What opportunities and challenges do the

firm’s stakeholders present for the HRM system?’’ and

‘‘What responsibilities does the firm’s HRM system have

toward its stakeholders?’’ As shown above, there are many

arguments for the ‘‘whys’’ of the stakeholder approach in

HRM instead of the ‘‘how’s’’ or the ways in which stake-

holders can be included into HRM (e.g. Guerci and Shani

2014; Osland and Osland 2007).

Stakeholder theory enables organized thinking about

organizational responsibilities that also concern sustainable

HRM. The more an organization is engaged with its

stakeholders, the more responsible it becomes (Greenwood

2007). We acknowledge that the stakeholders of an HRM

system may play different roles and have different

requirements that relate to sustainable HRM (Guerci and

Shani 2013; Jackson and Schuler 2003; Ulrich and

Brockbank 2005). Each of these stakeholders may have

specific interests and needs as summarized specifically

below:

• Owners and investors: returns on investments and a
corporate reputation

• Customers: The quality of services and products, speed
and responsiveness, low costs, innovation, and

convenience

• Society: Legal compliance, social responsibility, and
ethical management practices

• Organizational members: Fair pay and fair treatment,
good quality of work life, and long-term employment

• Suppliers, unions, alliance partners: Reliability, trust-
worthiness, and collaborative problem-solving

Despite these multiple stakeholders in HRM, and a call for

a softer HRM that engages with such stakeholders (see

Beer et al. 2015), HRM research and practice has been

criticized for focusing on profitable performance at the

expense of employees (Guest 2011). For example, some of

this criticism relates to the lack of an employee perspec-

tive, noting that employees are treated as resources to be

exploited by employers rather than assets to be developed

(e.g. Guest 2011; Legge 2005; Marchington 2015; Van

Buren III et al. 2011; Vanhala et al. 2012). Hence, there

have been calls for a greater focus on employee-level

outcomes—such as well-being—and not just on the effects

of HRM for best organizational performance (Armstrong

et al. 2010; Boxall and Macky 2009; Nishii and Wright

2008; Van De Voorde et al. 2012).

As shown above in the literature review, several

approaches and definitions are evident in this relatively

new research area of sustainable HRM. In this paper, we

first analyse how top managers construct the meaning of

sustainable HRM and its responsibility areas. We then

integrate our findings to broader responsibility areas of

CSR as discussed above (see Carroll 1991; Jamali 2008).

Finally, we rely in our analysis of stakeholder salience

theory presented above (Mitchell et al. 1997) by focusing

on how top managers identify and prioritize the stake-

holders in

sustainable HRM.

Methodology

Context of the Study

The context of our study is Finland, which along with the

other Nordic (or Scandinavian) countries, ranks high in

surveys of equality, social welfare, and CSR activity

(Andersen 2008; Byrkjeflot 2001; Strand et al. 2015).

Finland and the other Nordic countries enjoy a reputation

for generous social benefits that are available to all citizens,

a high level of well-being, equality in gender relations, and

a corporatist system of employment relations characterized

by close co-operation between labour unions, employer

organizations, and the state. The other side of the coin is

also apparent in terms of high levels of taxation, relatively

high unemployment, deteriorating competitiveness, and

falling output (OECD 2014).

According to a study published by Accountability

(2007), the Nordic countries, along with the UK, dominate

a list of 108 countries wherein responsible business prac-

tices were evaluated. Finland ranked a joint third with

Sweden, in a Transparency International survey of per-

ceived corruption in the public sector that covered 177

‘territories’ or countries. Moreover, in the Global Sus-

tainable Competitiveness index, which evaluated a wide

range of sustainability-related measures (Sol-Ability 2013),

Finland rated number three among the 176 countries

ranked, after Denmark and Sweden. Considering these high

rankings in international CSR-related measures, Finland

offers an interesting context to use to study sustainable

HRM, because managers and employees of Finnish com-

panies and other organizations are familiar with sustain-

ability-related thinking.

Data Collection and Sample

This study draws on data collected via the HR Barometer

research that focuses on the future challenges in HR efforts

in Finland. The HR Barometer consists of the following

parts: Background information (quantitative), future chal-

lenges in HRM (qualitative), assessment and justification

of the most significant challenges in HRM (quantitative),

dimensions of sustainable HRM (qualitative), implemen-

tation of sustainable HRM in respondents’ organizations

(qualitative), and an assessment of HR work (quantitative).

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123

The HR Barometer is owned by the Finnish Association

for Human Resource Management (HENRY). The HENRY

network includes several partners including academic

institutions. Data for the current study were collected in

January 2013 from a large number of private and public

organizations that are operating in several business fields

using web-based survey. The focus group consisted of

general managers, supervisors, HR professionals, and shop

stewards who were contacted via Finnish labour market

associations.

This study focuses on top managers’ opinions on the

most important areas of sustainable HRM. A similar

approach has been undertaken through the foundation of

data collection, as in the work of de Gama et al. (2012) that

interviewed HR managers. The focus on top managers was

influenced by the observation of Francis (2002, p. 433) in

that ‘‘It is argued that the discourse of HRM acts as a

powerful medium in the hands of senior managers…’’.
Gioia et al. (2012) asserted that top managers are able to

explain their thoughts on sustainable HRM reliably, and we

as researchers should give voice to these informants to

discover new meaning for HRM sustainability.

A total of 538 top managers responded to our survey,

representing a fifth (21 %) of all 2579 respondents to the

2013 HR Barometer. Of the top managers surveyed, 48 %

were men, and 52 % were women. Most of the respondents

were 51–60 years (38 %) and 41–50 years (34 %). The

most common educational backgrounds were either in

economics (28 %) or engineering (19 %). Almost two-

thirds of the top managers were HR managers (59 %), and

over a third (41 %) were other managers. Most of the

respondents (55 %) represented the private sector (of

whom 21 % represented industry), 24 % came from the

public sector, and the rest responded as ‘‘Other’’ (21 %).

The typical size of their employing organizations was

50–250 employees (33 %), while about 6 % of respondents

came from organizations employing more than 5000 staff.

We received 471 short and 303 longer written answers

to the question: ‘‘What do you consider the most important

sub-areas of sustainable HRM?’’ The respondents were first

asked to respond briefly and then to expand on their short

responses. The current research, however, focuses on the

longer answers. Fourteen answers were not related to sus-

tainable HRM at all—they mainly described poor HR

practices or inefficient use of working time. Consequently,

our analysis here covers 289 written responses.

Data Analysis

The current research applied an inductive approach to data

analysis and follows the approach developed by Gioia et al.

(2012), see also Gioia and Thomas (1996) and Miles and

Huberman (1994) on qualitative analysis. This choice

means that we searched for the dimensions of the sus-

tainable HRM concept from the data. As the open form of

the survey question indicates, we were interested in what

the top managers themselves considered to be the most

important elements of sustainable HRM. A similar

approach was applied, for example, by Gioia and Thomas

(1996) for studying top management teams, and de Gama

et al. (2012) for studying HR managers’ experiences with

the rhetoric and reality of HRM. The profound element in

all studies of this type is the assumption that reality is

socially constructed through social and linguistic interac-

tion (Berger and Luckmann 1966; Gioia et al. 2012). It

means that a phenomenon (such as sustainable HRM) is not

something definite, but rather, it is constructed by the

product of the interactions of researchers and practitioners

of HRM and management and is affected by the prevalent

societal discourse on sustainability, ethics, greening, and

the like. Language and communication do not exist in a

vacuum; they are in continuous interaction with the cultural

practices from which they emerged. Applying to this view,

sustainable HRM is something that social actors thus pro-

duce, transform, and maintain.

We began the data analysis by reading the textual

material through several times, after which the researchers

separately performed an initial coding of the material. To

agree on this initial data coding, we compared our

interpretations and discussed their differences and simi-

larities. This type of analysis retains the informants’

voices to make the research language visible. Therefore,

we first associated the data with first-order codes (i.e. the

language used by the informants), and illustrated those

categories with descriptive phrases and quotes. We iden-

tified several first-order codes, a step that helped to cluster

the first-order codes into second-order (i.e. higher order)

themes in terms of the terminology of the researchers. For

example, taking care of employees’ competence develop-

ment, was later refined to read competence development,

thereby giving voice in the analysis to both the informants

and the researchers (see Gioia et al. 2012). After final-

izing these second-order themes, we investigated their

underlying theoretical dimensions to understand how the

various themes interacted with and related to one another

within a broader context. Appendices 1 and 2 outline our

analysis and also record the illustrative quotes, the sec-

ond-order themes, and aggregate theoretical dimensions

that illustrated the top managers’ constructions of sus-

tainable HRM. This analysis process led us to identify

four main dimensions of sustainable HRM: Justice and

equality, transparent HR practices, profitability, and

employee

well-being.

Next, we present the findings. First, we detail the four

themes after which we illustrate how these dimensions are

linked to the main stakeholders.

708 M. Järlström et al.

123

Results

In this study, the way in which Finnish top managers

actually construct the meaning of sustainable HRM is

organized into four (interconnected) main dimensions:

Jus

tice and equality, transparent HR practices, profitability,

and employee well-being. We next present here each of

these four dimensions in turn and illustrate how top man-

agers constructed the meaning of sustainable HRM and its

broader responsibility areas. The analysis also reveals how

these dimensions are linked to different stakeholder groups.

The Dimensions of Sustainable HRM

Justice and Equality

The justice and equality dimension of sustainable HRM

covers those topics that relate to obeying laws and regu-

lations, diversity management, ethical values, and man-

agers’ exemplary behaviour. These topics link to the legal

and ethical responsibilities in CSR (Carroll 1991) and also

are part of the ethical discussion in HRM (de Gama et al.

2012; Greenwood 2013). In this study, managers empha-

sized that national laws and regulations form the basis of

justice and equality in their organizations. They also

regarded obeying these laws and regulations as the starting

or minimum point for responsible and sustainable HRM.

Hence, obeying institutional requirements does not neces-

sarily signal that a particular organization is

sustainable.

The institutional requirements in European countries are

fairly similar, and thus, they indicate that no benefit is

gained in people management by just obeying the laws and

regulations. To gain a benefit, a company needs to go

beyond these legal requirements (e.g. Van De Voorde et al.

2012). In addition to obeying the laws, managers reported

that the role of collective agreement is an important ele-

ment of sustainability in HRM, as shown in the following

excerpt:

Sustainable HRM includes all issues related to the

employment relationship and further linked to the

collective agreements and laws. In the same vein, the

proper management of employment relationships is a

signal of the responsibility the company has to its

employees.

This excerpt illustrates the meaning and importance of

contextual factors. Collective agreements are fairly com-

mon in the Nordic context, and, therefore, they are not a

differentiating element, but rather a starting point. In Fin-

land—typical of the Nordic context (Andersen 2008)—the

role of unions and collective agreements are important

elements of sustainable HRM.

Turning to diversity management, the importance and

appreciation of having diversity among employees and the

equal treatment of those employees were stressed. The

following excerpts exemplify how this employee perspec-

tive appeared in the managers’ texts:

Every member of the organization needs to be treated

equally, throughout the organizational hierarchy.

Sustainability means equality and appreciation,

instead of hiding behind [terms like] personnel

administration.

It seems that just and fair treatment of employees means

that the rules, responsibilities, and rights are intended to be

the same for everyone throughout an organization. The

tone of the excerpts above is fairly normative, but there is

very little reference to how these intentions should be

implemented in real practice. Overall the diversity aspects

(e.g. gender, age, ethnic background, education, and

health) were mentioned especially in a recruitment context.

Hence, sustainability in HRM seemed to refer to equality

and diversity in recruitment decisions. Ideally the elements

of justice and equality will be woven into the organiza-

tional culture, and that rhetoric becomes reality:

Every employee is subject to the same rules and has

the same responsibilities and rights that apply from

the recruitment process through to the routines of

work. The extent to which an employee feels valued

affects the way leaders or colleagues mould the

organization’s culture.

The written answers of top managers expressed how the

perception of justice and equality among employees

defined the actual level of sustainability. Therefore, fair

treatment only represents a foundation upon which the

meaning and definition of sustainable HRM can then be

built. The top managers see the equal treatment of all

employees as being important, which is also a Western and

especially a Nordic value (Lindeberg et al. 2004). Ethical

thinking and ethical procedures were linked to justice and

equality, as the following quotations clearly illustrate:

As a firm, we operate ethically in everything we do,

and with everyone. We treat our employees as

equally as possible. We get involved with difficult

matters, too. We invest in leadership, and that way

ensure that leadership in our organization is of a high

calibre. We take the needs of both employees and the

organization into account.

Sustainable Human Resource Management with Salience of Stakeholders… 709

123

Ethicality is the cornerstone of good human resource

management even now. In the future, it will be the

lifeblood of good human resource management as

well as of management, in general.

These quotations bring a set of nuances on ethical HRM

to sustainability in contrast to the mainstream economical

outcome-oriented HRM (cf. Greenwood 2013). It high-

lights employees as a stakeholder group (Phillips 1999;

Mitchell et al. 1997) and promotes the fair treatment of all

employees (Jamali 2008).

The managers recognized their own behaviour as being

a role model. Hence, the one way to achieve just and equal

feelings and procedures is to ensure that the managers

modelled them through their own behaviour. Exemplary

behaviour was described in the following way:

Walk as you talk. If you demand your employees to

reduce traveling costs, you need to do the same

yourself, too.

This quotation was the only one found in the data that

related to green HRM (Jabbour and Santos 2008; Jackson

and Seo 2010; Renwick et al. 2008, 2013, 2016). It seems

that environmental HRM or green HRM as it is sometimes

called did not relate to people management in the minds of

these managers. That view supports Ehnert’s (2014) model,

but it contradicts Kramar’s (2014) model on the environ-

mental (i.e. ecological) outcome of HRM. It is possible,

however, that although environmental elements or out-

comes are important, top managers actually see them as

being separate from the other two aspects of responsibility

(people and profit).

It seems that these managers wanted to signal a genuine

intent to promote equal and ethical practices. Justice and

equality seemed to be related to both legal and ethical

responsibilities of sustainable HRM (Carroll 1991). Next,

we focus on the second dimension of sustainable HRM, i.e.

transparent HR practices.

Transparent HR Practices

The transparent HR practices dimension of sustainable

HRM refers to a range of (‘‘best’’ or ‘‘high commitment’’)

HR practices that is applied in organizations (Pfeffer 1998;

Van De Voorde et al. 2012) such as recruitment and

resource allocation, competence development, rewarding,

career planning, participation, and flexibility practices.

Similar HR practices are widely applied around the Wes-

tern world (e.g. Cranet 2011). These practices resemble

those HR-related activities that Ehnert (2009a, 2014) pre-

sented in the practice-based model of sustainable HRM.

Likewise, in the business ethics literature specific HR

practices, such as recruitment, promotion, and

remuneration, have been related by scholars to both fair-

ness and equity (Greenwood 2013).

It was quite common for top managers to define sus-

tainable HRM in terms of only one individual HR practice,

which contradicted the idea of HR bundles (Van De

Voorde et al. 2012). However, several HR practices were

identified in the course of the survey, and it appeared that a

sustainability perspective brings greater nuances to these

practices.

On the topic of recruitment and allocation of human

resources, the managers referred to the allocation of human

resources in the best possible way (the right person in the

right position), including the planning of the quality and

quantity of human resources for the longer term. Especially

this long-term time perspective reflects sustainable HRM

(Ehnert et al. 2016).

Competence development (and management) was seen

as an indicator that the firm cared about its employees.

Competence development related to a central feature of an

organization’s sustainability for the long term. The fol-

lowing statements by managers illustrate the issue well:

I see competence development as a very important

element of the sustainability perspective, because the

organization remains competitive with the help of

competence development; but also individual

employees remain competitive in the job market if

they need to change job.

We want to make sure that every employee has an

opportunity to develop in his/her job by discussing

about his/her interests and needs.

The above excerpts show that managers recognized the

meaning of competence development (i.e. development of

employees’ skills) for both the individual and the organi-

zation. Although competence development targets prof-

itability and the success of the company, top managers

seem to agree that it is the organization that needs to take

responsibility for employee development, including future

employability and career opportunities within and/or out-

side the organization. One of the managers describes this

competence development as follows:

Competence development, so that both the employee

and the employer benefit; and all personnel will be

better equipped to survive changes.

Therefore, although managers stressed the win–win

benefit (mutual gains; see Appelbaum et al. 2000; Van De

Voorde et al. 2012) of competence development for both

parties, their quotes related to managerial responsibility

also highlighted economic responsibility.

The managers also referred to the importance of re-

warding in their responses. Rewarding, alongside

710 M. Järlström et al.

123

recruitment, forms the basis of the employer–employee

relationship. For example, the managers expressed how

‘‘The rewards and the work tasks need to be synchronized

and the level of training taken into account’’ and ‘‘For

instance, the compensation system should be clear and

transparent’’. According to these managers, a transparent

and sustainable rewarding system is important; hence,

‘‘Rewards should apply to all employees, not just the top

management’’.

Career planning was also a practice that the managers

referred to as a sign of sustainable HRM.

Career planning

is closely linked to competence management, and it was

seen as a central element especially in expert organizations.

Competency planning is also an element that is closely

linked to CSR and seen as an advanced HR practice in that

same sense (Gond et al. 2011). According to these man-

agers, career planning is a way to acquire competent and

valuable employees who are committed to the organiza-

tion. Individualization of HR practices was related to

career planning, as there is a need for individual career

paths. As with competence development, career planning

was also seen as a way to create a win–win situation for

both the employees and the employers.

Achieving a win–win situation implies employee par-

ticipation just like competence development does. The top

managers certainly referred to employee participation and

to the importance of open, two-way communication in

participation. Participation can help create an open com-

munication culture of an organization. The managers

aspired to make all communication, information sharing,

and organizational actions transparent, and viewed trans-

parency as indeed integral to ensuring sustainability in

HRM. The interaction between both managers and

employees, for example, when giving and receiving feed-

back can contribute to making organizational practices

transparent, and thus clearly understandable to everyone:

Information should not be withheld without good

reason; it needs to be made available to every-

one…and at the same time, openness should flow the
other way, too. Employees should be encouraged to

give feedback.

Despite this desire for open communication, however,

there can be regulatory constraints on providing certain

information to the entire workforce, especially within listed

companies. However, employee involvement and partici-

pation in work-related decision making (i.e. on tasks) is a

further element that is important for securing sustainability:

When employees are involved in planning and the

development of their own jobs, and are granted

freedom of action and responsibility, their motivation

increases as well.

Work tasks are formulated together with the

employees.

The above excerpts demonstrate the top management

thinking in this study in that sustainability refers to the joint

responsibility of work tasks, and hence, participation and

dialogue between employees and managers as an effective

way to create and maintain transparency in all HR prac-

tices. Employee participation plays a role, for example, in

how HRM contributes to promoting CSR goals and keep-

ing employees as stakeholders clearly in mind (Jamali et al.

2015).

Flexibility was also related to sustainability in HR

practices. Managers stressed the importance of flexibility in

terms of employee needs. Management recognized the

need for flexibility and individual approaches to issues like

work hours, leave, rewards, remote work, vacations, and

retirement. According to these managers, in the future

especially, the companies that offer more flexibility to help

employees balance both work and life demands may

achieve greater competitive advantage. Flexibility can

affect sustainability in HRM in that it may help employees

have longer careers and stay healthier as well. However,

the managers did note that in reality reconciling the need

for flexibility and HR planning can be challenging,

although ideally they should be integrated.

The responses related to transparent HR practices, as a

dimension of sustainable HRM, revealed a range of poli-

cies and practices among the top managers, and hence the

HRM system was covered relatively widely. Especially for

some HR practices (competence development, employee

participation), the win–win benefits for employer and

employee were emphasized. Transparent HR practices

seemed to be related to the managerial responsibility of

sustainable HRM. This responsibility area is new to Car-

roll’s (1991) list of social responsibility and can be further

explained by focusing on the organizational-level aspects.

Next, we thus turn to the (economic) profitability dimen-

sion of sustainable HRM.

Profitability

The profitability dimension of sustainable HRM is related

to organizational effectiveness and covers topics that relate

to the integration of HRM and strategy, proactiveness in

actions, long-term thinking, and the business knowledge of

HR managers. Long-term thinking is also a central element

of sustainable HRM (Ehnert 2009a; Kramar 2014).

In our collected data, the managers stressed the link

between HRM and strategic business goals. They clearly

saw that HRM needs to support strategy, and HRM issues

need to be integrated into strategy discussion during the

early phase. This last expectation seems to relate to the

Sustainable Human Resource Management with Salience of Stakeholders… 711

123

strategic role of HRM as well (Ulrich 1997; Jamali et al.

2015), which stresses the role of HR managers in the

strategy process. The following excerpt describes this

aspect:

There is a need in the HR function to see the future

and be part of the strategy process.

This strategy-related viewpoint adds a long-term per-

spective to the sustainability discourse and also raises the

issue of competitive advantage for the company. The long-

term perspective is one of the key elements that define

sustainable HRM (Ehnert 2009a). Several managers stated

that:

Business thinking is one of the cornerstones of HRM.

One of the key elements in the profitability dimension of

sustainable HRM is the integration of HRM and strategy.

The managers stressed the need for holistic thinking in

sustainable HRM, which relates to an organization’s vision,

strategy, economic resources, and environment. The con-

tribution to overall social responsibility of an organization

is present in this thinking and especially in the strategic

partner role that HR managers can play (Jamali et al. 2015).

HRM must consider the organizational entity instead of

only partial optimizing. Sustainable HRM reaches the

valuation of employees, which at best, may lead to inno-

vation, resilience, flexibility, and a new and better perfor-

mance-enhancing atmosphere.

Despite the integration of HRM and strategy, creating

sustainable strategies is not a stable process but rather one

that constantly changes, requiring foresight from leaders

for the organization to be capable of change. Accordingly,

the path to long-term sustainability encompasses proac-

tiveness in both actions and long-term thinking:

Sustainability is like a moving and evolving target.

We must know in which direction opinion and

interpretations about sustainable entrepreneurship is

evolving and how both will impact HR efforts.

Understanding the evolution of sustainability also

requires HR leaders to acquire business knowledge. Their

role in an organization’s top management team and strat-

egy building is relevant to an organization’s basic pursuit

of profitability. It is possible that HR leaders in particular

can increase the visibility of the sustainability discussion in

organizations, and thereby enhance the employer brand.

The benefits of co-creating sustainability with HRM and

CSR (Jamali et al. 2015) are present in this dimension of

sustainable HRM.

The profitability dimension of sustainable HRM seems

inherently related to the hard version of HRM (Fombrun

et al. 1984; Legge 2005) that stresses the financial out-

comes. Profitability is linked to the economic responsibility

of sustainable HRM (Carroll 1991; Kramar 2014) and all

these topics, generally interpreted as advancing perfor-

mance or the profitability of a company can be grouped

under the umbrella of strategic human resource manage-

ment or strategic integration (Legge 2005).The fourth and

last theme found in our study addresses the employee well-

being dimension of sustainable HRM. This dimension

contrasts with the employer and profitability focus descri-

bed above and again introduces people and soft HRM

aspects into the sustainability discussion.

Employee Well-Being

The employee well-being dimension of sustainable HRM

covers topics related to leadership style and caring for and

supporting employees. Overall, caring for employees and

offering support includes showing respect, and that was

seen as defining the sustainability approach to employee

well-being.

Taking care of employees includes the idea that one

is ready to fight ignorance and be ready to inspire

employees to identify and seize new challenges.

This emphasis on employee well-being is a response to

the criticism that employees are too often seen as

resources

to be exploited rather than assets to be developed (Guest

2011; Marchington 2015). Employee well-being not only

implies well-being and health-related thinking; it encom-

passes all types of caring. Examples of this kind of thinking

are catering to employees’ physical and mental demands

and safeguarding their work relationships with supervisors

and colleagues (e.g. to ensure good fit in selections). The

managers surveyed also linked work–life balance, the

ageing workforce, and the differing needs of employees at

different points of their career to well-being (see Ehnert

2009b; Docherty et al. 2009; Kramar 2014), as shown in

the following excerpts:

Inthe nearfuture,it isnot self-evidentthatallemployees

will strive to reach a one hundred percent result. There

will increasingly be ageing employees and people

whose tasks must be modified according to their work

abilities and knowledge background. A responsible

employer takes into account these aspects when con-

sidering employees in their work lifecycle model.

Balance working hours with employees’ ability to

work and their family situations, so that enough free

time is available to maintain a positive work–life

balance.

We should take care of both mental and physical

strains and try to reduce both.

712 M. Järlström et al.

123

The managers also stressed the idea of mutual or shared

responsibility between the organization and its employees

for employee well-being and work conditions in this

dimension. Mutual responsibility can also be linked to

psychological contract discussion (Shore and Barksdale

1988), and mutual gains (win–win) (Appelbaum et al.

2000; Van de Voorde et al. 2012).

In terms of employee well-being, managers raised the

importance of leadership and leadership style. Here, sus-

tainable HRM enters the individual realm as well, although

other aspects have mainly related to the organizational

level. The managers shared the view that leadership style

has much to do with well-being issues, and managers

actually have a responsibility to safeguard employees’

well-being in a broad sense (health, work, and life). Sim-

ilarly related to leadership and managerial skills, managers

advocated an easily approachable personality as an

important trait for managers to have. Support for employ-

ees, and a soft leadership style appeared to be important for

sustainable HRM.

[the manager] is easily accessible…can be contacted
even in the case of difficult problems…does not
underestimate anyone.

The multiple entity of well-being includes good

leadership. How we treat each other.

Immediate supervisors in middle management have a

decisive role to play. They operate as interpreters of

management desires for the employees. The expertise

of immediate superiors, both in management and

leadership, must be at a high level.

Employee motivation is one of the routine tasks of man-

agers. When motivation and its determinants are considered

from the sustainability perspective, it seems that these

motivating elements should be individually tailored. Indi-

viduals are motivated by different issues (e.g. rewards, career

progress, and work–life balance) depending on issues like

age, gender, family situation, and career phase. This is why

the managers described various ways to use to motivate

employees and were aware that the same things do not

motivate all employees. Moreover, the leadership skills of

supervisors and the ability to take care of employees were

connected by managers to company results:

The better the line manager/supervisor is, the better

the result his/her team will get.

Individual differences are taken into account in

leadership.

The above excerpt reveal how the theme of employee

well-being also highlights the role of well-being in

supporting company performance, and the mutual gains

aspect (Appelbaum et al. 2000; Van De Voorde et al.

2012). The following excerpt describes the win–win situa-

tion and multiple responsibilities (economic and social) of

sustainable HRM:

Good results and caring for people go hand in hand.

Accordingly, the mutual gains model refers to an opti-

mistic view of the role that employee well-being plays in

the HRM and performance relationship (Peccei et al.

2013). This optimistic view holds that HRM has a positive

effect on both employee well-being and organizational

performance (see Van De Voorde et al. 2012). When

considering the sustainability of HRM, the target of the

optimistic view is to bring people back into the human

resource management equation (De Prins et al. 2014).

Employee well-being also seems to be related to the social

responsibility of sustainable HRM (see Ehnert 2009b;

Kramar 2014).

These results are in line with Ehnert et al.’s (2014)

concluding thoughts, namely, that HRM needs to imple-

ment practices that foster, among other things, the mental

and physical health of employees to be sustainable. Our

findings indicate that both managers and employees have a

central role to play in delivering sustainability in terms of

employee well-being. It is suggested that the central ele-

ment differentiating sustainable HRM from strategic HRM

is a call for greater focus on employee-level outcomes—

such as well-being—over the effects of HRM on organi-

zational performance (Armstrong et al. 2010; Boxall and

Macky 2009; Nishii and Wright 2008; Van De Voorde

et al. 2012). Because the strong commitment of top man-

agers is considered as a key to achieving sustainability

(Ehnert et al. 2016; Kramar 2014), the fact that the top

managers in our data outcome linked employee well-being

to sustainability is a signal of the important role that

employee well-being plays in building sustainable HRM.

Overall, the themes of employee well-being and trans-

parent HR practices dominated the answers that were

received from top managers. The importance of employee

well-being probably stems from the recent public debate on

issues about well-being in Finland, which partly relates to

an ageing workforce. This shift toward an employee-cen-

tred view of people management (Beer et al. 2015; Van

Buren III 2005) can be detected in the previous theoretical

discussion as well. In general, the theme of employee well-

being emphasized the employee focus over an organiza-

tional one. Even if an organization applies a soft HRM

approach, that in and of itself does not guarantee the well-

being of its employees.

The employer brand is an integral part of sustainable

HRM, and it is an aspect that emerged from our data as

well, but not as an individual dimension. The employer

Sustainable Human Resource Management with Salience of Stakeholders… 713

123

brand is an example of how sustainable HRM breeds out-

side of organizational boundaries and yet covers all of the

dimensions of sustainable HRM. From a sustainability

perspective, it is desirable for an organization to be rec-

ognized as an employer of choice (see Ehnert 2014) in

order to attract talented people. These managers saw the

image of the employer brand as originating within the firm,

but also saw its effects spreading beyond the firm:

The employer brand has to be based on results that

are measured and focused on a real target group. A

good internal employer brand also spreads outside the

company and serves as an efficient tool to build the

external employer brand. Co-operation with schools

and internships are also functional tools for that

purpose.

In the next section, we illustrate how the dimensions of

sustainable HRM that were elicited from our respondents

affected their firms’ stakeholders.

Stakeholders of Sustainable HRM

The managers queried referred to a wide range of stake-

holders and the stakeholders’ special roles and require-

ments in sustainable HRM; specifically, owners, managers,

employees, customers, labour unions, and employee rep-

resentatives. While there may be many ways to determine

who is the stakeholder of an organization, these specific

stakeholders seem to have both attributes of power and

legitimacy (for the organizations in our data at least) where

stakeholder salience is concerned (Mitchell et al. 1997).

Below we connect the dimensions of sustainable HRM

derived from the above analysis to the stakeholders that

were mentioned in them.

In terms of the justice and equality, national laws and

regulations along with collective agreements represent the

institutional level of influence of sustainable HRM. From

that perspective, both legislators and trade unions are

stakeholders for sustainable HRM.

Responsibility can be demanded of human resource

management as well for obeying laws, orders, con-

tracts and so on, and complying with the general

morality.

This is a natural continuum of the construction that

states that obeying laws and regulations is the starting point

of being sustainable: It logically extends to the stakehold-

ers, which have both power and legitimacy to keep track of

the actions of an

organization.

Managers tended to include employees among the key

stakeholders in sustainable HRM. Employees were seen as

the primary stakeholders with power and legitimacy and in

that way, they were also highly salient (Mitchell et al.

1997; Phillips 1999). This aspect was evident, especially

when the managers referred to employee well-being and

profitability themes:

By taking care of the well-being of employees, the

organization can affect the results of the work and

also employee turnover. Well-being is a factor

through which the organization can compete for a

competent workforce.

Organizations constantly seek more efficient and pro-

ductive ways to act. These goals have a tremendous

impact on people and their work, the work environ-

ment, and doing the work. It is not self-evident to

everyone involved with 100 % motivation. You need

to be present, and communication needs to flow flu-

ently before rumours start if you wish to succeed.

The above excerpts clearly exemplify the co-existence

of the profitability and well-being themes, which may also

commit employees to an organization. Employees are

important stakeholders to the managers, but the managers

also pointed out that the relationship is reciprocal. Even if

it is the employees toward whom sustainable HRM is

primarily aimed, the managers also expect those employees

to strive to reach the goals of the organization:

Work is developed together with the employees.

Opportunities to participate increase an organiza-

tion’s productivity and well-being.

Leadership that takes employees’ competencies,

skills, and opportunities into account…

This reciprocal nature of keeping profitability and well-

being at a high level, when taken together, also signals the

nature of the employee stakeholder role. Employees have a

powerful role because they act in the name of the company

and represent the company to other stakeholders (Crane

and Matten 2004). On the other hand, the respondents saw

the role of managers (and supervisors) as to actively

safeguard the employees’ welfare. In some respects, the

concern for employee well-being might be seen as being

the role of employee representatives. Perhaps contrary to

expectations, one of the managers expressed this situation

as follows:

The unions often push the union’s interests, and

surprisingly, often the interests of an employee are

fought for by the employer

This view indicates that there are various expectations

for employees, managers, and employee representatives,

and a balance between these roles needs to be found to

reach sustainability.

714 M. Järlström et al.

123

The profitability dimension of sustainable HRM natu-

rally related to shareholders as a stakeholder group.

Although shareholders are considered to be the main actors

who are truly interested in the profitability and perfor-

mance of the organization, the same concerns affect

employees as well. As the following extract illustrates, the

profitability aspect is important to several types of

stakeholders:

We are working for and responsible to our owners. In

the same vein, we are also responsible to each other

for the success [of the firm]. Everyone wants to be

part of a successful company and benefit from the

elements that success brings, such as flexibility, a

good working environment, happy customers, eco-

nomic benefits…

As illustrated above, good profitability helps build

flexible HR practices and employee well-being. Jamali

et al. (2015) recognized that different actions taken by the

company contribute to the well-being of employees as a

stakeholder group. These include (among others) family

friendly work environment, open and flexible communi-

cation, employee development, equitable reward systems,

and overall fair treatment of employees.

Leaders and managers are another stakeholder group

that were reported by managers to be affected by sustain-

able HRM. Leaders are part of the entire HRM system and

can, therefore, be nominated as stakeholders in any of the

four dimensions of sustainable HRM. Leadership and the

role of leaders are both central for how they can affect the

CSR–HR interface, i.e. responsible leadership (Gond et al.

2011). The respondents particularly mentioned leadership

development:

At the moment, the leaders’ abilities and skills to lead

employees as people with feelings play a minor role

in executive development.

The employee representatives or unions were also seen

as a stakeholder group, which do have the power and

legitimacy to follow the impacts of the organization’s

actions on employees (e.g. layoffs or major organizational

changes). They also have a central role in the actions

between managers and employees. The managers viewed

having ‘‘a working relationship with employee represen-

tatives’’ as relevant when sustainability in HRM is targeted.

Although the managers emphasized internal stakehold-

ers in sustainable HRM (e.g. employees, managers, and

employee representatives), they also picked up on the

importance of customers as external stakeholders:

In a service industry, it is important to understand the

operative level and the possible customer interface

and their effects on HRM.

To conclude, the dimensions of sustainable HRM

revealed several connections to internal and external

stakeholders. The stakeholders identified in the justice and

equality dimension were legislators, labour unions, and

employer organizations. The stakeholders identified in the

transparent HR practices dimension were managers who

implement HR practices, and the employees who are the

target of those practices. The stakeholders identified in the

profitability dimension were owners, and also managers,

because they are involved in creating business strategies

and are responsible for the overall success of the organi-

zation. Finally, in the employee well-being dimension, the

employees are the main stakeholders, but managers and

supervisors also play an important role as actors who are

safeguarding employee well-being.

Further, the managers connected several stakeholders to

sustainable HRM and discussed their special roles and

requirements (see Guerci and Shani 2013; Jackson and

Schuler 2003). This occurrence is in the line with March-

ington (2015), who suggests that there is a place for moral

and business case sustainability for HRM, if a more bal-

anced engagement with all stakeholders is desired.

Discussion

Our goal in this study was to increase the knowledge of

sustainable HRM, its dimensions and responsibility areas,

and the key stakeholders as perceived by top managers. In

our qualitative analysis study, we identified four dimen-

sions of sustainable HRM in top managers’ answers: Jus-

tice and equality, transparent HR practices, profitability,

and employee well-being. We combined these dimensions

into several correspondingly broader responsibility areas of

sustainable HRM: Legal and ethical, managerial, eco-

nomic, and social responsibility. In addition, our findings

indicate that the top managers referred to the wide range of

stakeholders found in sustainable HRM, and specifically,

owners, managers, employees, and trade unions were

mentioned in this regard. These findings show that,

depending on the dimension of sustainable HRM, some

stakeholders seem to be more important than others. For

example, legislators and trade unions related mainly to

justice and equality, shareholders and other owners, and

managers related to profitability, managers (and supervi-

sors) related to employee well-being, and finally, employ-

ees related to transparent HR practices, employee well-

being, and profitability, which may indicate their impor-

tance and thus their salience as a stakeholder group. In the

following sections, we discuss the contributions this study

makes to the sustainable HRM literature, and stakeholder

theory.

Sustainable Human Resource Management with Salience of Stakeholders… 715

123

Theoretical Contributions

Our study makes several contributions to the under-

standing of sustainable HRM from a top management

perspective. The sustainable HRM concept itself and its

related stakeholders have been unclear and ambiguous in

the sustainable HRM literature (Ehnert and Harry 2012;

Ehnert et al. 2014; Guerci et al. 2014; Jackson and Seo

2010). In spite of top management’s crucial role in

defining and legitimating the HRM system and HR

practices (Azmi and Mushtaq 2013; Legge 2005), and

sustainable HRM, the top management perspective has

been largely ignored in the prior sustainable HRM liter-

ature, which has focused mainly on sustainability report-

ing (e.g. Ehnert et al. 2016) and conceptual development

and literature reviews (e.g. Kramar 2014). We continued

the research stream that has investigated sustainability

reporting practices by the world’s largest companies

(Ehnert et al. 2016) by including the HRM perspective.

The findings here on the dimensions of sustainable HRM

combine the managerial, economic, social, legal, and

ethical elements of sustainability into a single entity.

Interestingly, the findings mainly ignore the ecological (or

environmental) elements in sustainable HRM (e.g. Jack-

son and Seo 2010; Jackson et al. 2011; Renwick et al.

2008, 2013, 2016), and thus provide support for Ehnert’s

sustainable HRM model (2009a, b, 2014) instead of

supporting the model by Kramar (2014).

The main reason for the absence of these environmental

issues in the findings, however, was less evident. Although

environmental issues are important in organizations, they

can be related to sustainable management in general rather

than to HRM specifically. Indeed, according to a study by

National Environmental Education Foundation (2009), the

organizational units such as CSR, Environmental Safety

and Health, and Marketing and Sales are more likely to

actively lead environmental sustainability initiatives than

the unit of Human Relations. However, more recent studies

on green HRM suggest that applying HR practices based

on green HRM would lead to improved organizational

performance and employee well-being (Renwick et al.

2013, 2016) suggesting that environmental management is

closely linked to HRM too.

Our study contributes to the sustainable HRM research

and systems (e.g. Ehnert 2009a; Ehnert et al. 2014; Kramar

2014) by presenting the four dimensions of sustainable

HRM and their broader responsibility areas from a top

management perspective. Compared to CSR responsibili-

ties or social responsibilities (Carroll 1991), sustainable

HRM supports the legal, ethical, and economic responsi-

bilities of CSR, neglects the philanthropic responsibility of

CSR, and raises managerial and social responsibility as two

new responsibility areas. Therefore, our findings can indi-

cate that sustainable HRM can be partially seen as a feature

of social responsibility at the organizational level. Espe-

cially, it appears that managerial responsibility refers to

those HRM practices that are applied in organizations (Van

De Voorde et al. 2012).

Our results contribute also to the call for more discus-

sion on the ways in which HRM can contribute to or be

involved in CSR (Jamali et al. 2015). Sustainable HRM can

fill this gap by taking into account the four dimensions and

their interconnected roles in people management. The

identification of these four dimensions brings forth precise

elements that can build ‘good HRM’ (Gond et al. 2011),

thereby opening the current discussion on what is the actual

interface or boundary between HRM and CSR.

The discussion about the role that HRM plays in

building the sustainability of organizations is part of the

broader discussion about the future of HRM. Respect for

humanity at work (Cleveland et al. 2015) is seen as the

future direction for HRM. It means that the future role

of HRM and the managers involved in HRM is broad

and crosses the boundaries of different contexts, e.g.

organizational context, society, and the wider (global)

environment (Cleveland et al. 2015). As Cleveland et al.

(2015) suggest, HRM plays a critical role in advancing

this new direction and needs to be the employees’

advocate. Sustainability thinking in HRM can help to do

just that.

Further, these findings contribute to the theory of

stakeholder salience (Mitchell et al. 1997) by identifying

the important stakeholders in sustainable HRM conducted

by top managers. Although stakeholders have been inclu-

ded in discussions of sustainability (e.g. Hörisch et al.

2014), ethics (e.g. Greenwood and Freeman 2011), CSR

(e.g. Jamali 2008; Jamali et al. 2015), HRM (Ferrary 2009;

Jackson and Schuler 2003), and also sustainable HRM

(Guerci et al. 2014), our unique contribution stems from

the explicit link found between each dimension of sus-

tainable HRM and specific stakeholder group(s) that sup-

ports the theory of stakeholder salience (Mitchell et al.

1997), especially from a top management perspective

(Parent and Deephouse 2007). As shown in our findings,

sustainable HRM indicates stakeholder power and legiti-

macy (Greenwood and Van Buren III 2010; Mitchell et al.

1997) rather than urgency (situation based); therefore,

including the stakeholder perspective on sustainable HRM

is justifiable (Guerci et al. 2014). Indirectly, our findings

also give support to an open-system HRM model (Beer

et al. 1984, 2015; Van Buren III and Greenwood 2011) by

considering both internal and external stakeholders and

their values and roles in building sustainable HRM in

organizations.

716 M. Järlström et al.

123

The findings also indicate the salient role of employees

in sustainable HRM, which may partially be explained by

the Nordic context in this instance (Andersen 2008) and the

role of unions and collective agreements as important

elements of sustainable HRM in Finland. Correspondingly,

top managers see the equal treatment of all employees as

important, which is a Western and especially a Nordic

value as well (Lindeberg et al. 2004). Our results, as they

relate to employees and their well-being are in line with

Ehnert et al.’s (2014) concluding view that HRM needs to

implement practices that foster, among other goals,

employee mental and physical health to be fully

sustainable.

Our findings also indicate that managers and employees

both have a central role to play in delivering the sustain-

ability of employee well-being. Because the strong com-

mitment of top managers is considered the key to achieving

sustainability (Ehnert et al. 2016; Kramar 2014), the fact

that the top managers in our data did link employees to

sustainability is a signal about the important role of

employee well-being in building sustainable HRM. Next,

we will offer certain precise implications for practice.

Practical Implications

In addition to contributing to theory, this study offers

several important issues useful in actual organizational

practice. For instance, in line with Lamm et al. (2015), we

believe it is possible to encourage sustainable behaviour

among employees in an ecological sense, too. For example,

sustainable HRM could encompass work practices that

reduce the use of resources (energy, paper, water use) and

travelling. If this is the case, there should be more open

discussion about what sustainability actually means in

organizations and how HRM does relate to sustainable

management in general. One of the traditional roles of the

HR function is that of a change agent to foster organiza-

tional cultural changes (Ulrich 1997); consequently, it is

the task of a company’s HR to implement organization-

wide change in sustainability thinking and practices. Jamali

et al. (2015) also suggest that the objective for HR man-

agers is to promote change in CSR.

HR managers need to adapt to face new challenges from

their internal and external environments. The increasing

emphasis on sustainable HRM may also lead to an updating

of the roles and competencies of HR professionals, as they

strive to contribute more to organizational effectiveness.

To seize new opportunities successfully, HRM will have to

undertake new roles, such as understanding and partnering

with multiple stakeholders and balancing all their concerns.

Our findings suggest that there is a need for both long-term

and outside-in perspectives in HRM combined with a

simultaneous focus on people and the business (Ulrich and

Brockbank 2005). Transparency requires coherent and uni-

vocal messages, and hence, the development of consensus

between all decision makers (Bowen and Ostroff 2004;

Guerci and Pedrini 2014). Transparency, which related to

HR practices in our study, may also spread outside of the

organization in the future more than it does at present, and

would thus demand more awareness from managers on what

aspects of sustainable HRM should be reported and how that

reporting is successfully implemented. The pressure on

organizations to include sustainability elements in their

reporting is already evident, although much of the current

reporting is now voluntary (e.g. Ehnert et al. 2016; Hahn and

Kühnen 2013). Companies report information to convey

their transparency and ultimately to discharge their duty for

providing accountability to their stakeholders (e.g. Gray

et al. 1995, 1996; Roberts 2009).

The practical contribution of this research is the obser-

vation that the ways in which top managers construct

sustainable HRM is important, because top managers do

pass their viewpoints on to other stakeholders, both internal

and external ones. Top managers play a critical role in

legitimating HR practices, allocating resources, and influ-

encing within-group agreement in the organizational hier-

archy (Bowen and Ostroff 2004). Thus, how these

managers think about sustainable HRM may concretize

into new actions and actual behaviours. We agree with

Kramar (2014), who has stated that in the implementation

of HRM policies, it is the top managers who must play a

central role by sending consistent messages to their line

managers who then are responsible for the actual imple-

mentation of all relevant practices (Bowen and Ostroff

2004).

Sustainable HRM can be a more visible part of CSR

reports and programs in the future, which will also increase

awareness of this topic. The dimensions of sustainable

HRM can also be complemented by such measures (Kra-

mar 2014), for example the quality of the employment

relationship, the health and well-being of the workforce,

actual productivity, the quality of relationships at work, the

employer brand, work–life balance, and the costs associ-

ated with business travel.

We next discuss the limitations of our study and offer

suggestions for future research.

Limitations of the Study and Suggestions for Future

Research

Our findings contribute to the further understanding of

sustainable HRM and stakeholders, but the effort did have

Sustainable Human Resource Management with Salience of Stakeholders… 717

123

several limitations that we need to be acknowledged here.

The first one relates to our target group and the cross-

sectional research design. Because this study focused on

top managers’ perceptions of sustainable HRM, it is pos-

sible that their hierarchical positions might have affected

their answers (Parent and Deephouse 2007). For example,

the managers largely ignored any environmental discussion

(Jackson and Seo 2010; Jackson et al. 2011; Renwick et al.

2008, 2013, 2016), contract workers, and customers. We

expect that this choice is related to stakeholder salience but

that inference needs further studies for clarification. It is

also possible that top managers will employ particular

interpretations of sustainable HRM that reflect well on

themselves (e.g. Christensen et al. 2013; Rojo and van Dijk

1997), and accordingly, the answers they gave may not

represent the reality that exists in their organizations, but

rather their rhetorical management intentions or even their

aspirations.

Acquiring a better view of actual organizational reality

might involve studies that investigate other employee

groups, such as manual and clerical workers, as their ideas

about sustainable HRM might differ greatly from those of

the managers interviewed for this study. With a different

focus group, we could have gained different results—

middle managers would likely discuss customers and

contract workers more, and employees would likely discuss

the permanent employment relationship, outsourcing,

health care, or increasing employee influence.

Different stakeholders might also apply different deci-

sion-making logic and power as both relate to the impor-

tance of sustainability and their own operation areas (see

Greenwood and Van Buren III 2010; Hahn et al. 2015). For

example, trade unions and customers might focus on

employee-level outcomes (employee well-being, commit-

ment, intent to stay, etc.) more than they would on orga-

nizational outcomes (profit, market share, etc.). Similarly, a

stakeholder perspective may expand to include social

activists (Fineman and Clarke 1996), who may take a more

active role if the company is not taking care of its

employees. The urgency attribute was not visible in our

data, and longitudinal studies are required to understand the

potential changes in the salience of stakeholders and their

attributes more clearly (Mitchell et al. 1997; Parent and

Deephouse 2007).

Second, Brewster and Mayrhofer (2012) reported that

geographic location is an important factor when explaining

how HRM is understood, which stakeholders’ HRM is

meant to serve, the practices that spur legitimacy, and the

effects of specific HR practices. Because a global con-

sensus on the meaning of sustainability in HRM does seem

unlikely (Kramar 2014), the main limitations of this study

then link to the context in which it was conducted. Hence,

the context is a Nordic (or Scandinavian) country, which do

score high in terms of equality, social welfare, and CSR

activity (Accountability 2007; Ryner 2007). The dimen-

sions of sustainable HRM that we identified herein con-

structed the meaning of sustainability in HRM from the

perspective of Nordic top managers. However, we believe

that these findings can also be generalized to most Western

countries. Finland is a modern developed country, and we

do expect that the meaning of sustainability might differ in

other contexts, such as in those developing countries

struggling with child labour, bad working conditions,

environmental sustainability issues, or resource scarcity

and/or depletion. While the dimensions of sustainable

HRM do not reveal which dimension is the most dominant

one, further studies could investigate the relationship

between the dimensions and in so doing identify others as

well. One path for future research would be to study how

the concept of sustainable HRM fits into research on CSR–

HRM interface (Gond et al. 2011; Jamali et al. 2015).

Third, the importance of the supply chain as it relates to

HRM was mainly ignored (see Ehnert et al. 2016).

Although some external stakeholders were mentioned,

there is still a long way to go to fully understand the

supplier–organization–customer value chain because sup-

pliers, like customers, may also evaluate an organization

based on the level of sustainable HRM, including their

impressions of how employees are treated in that

organization.

Finally, the topic of sustainable HRM can benefit from

more discussion of the links between HRM and sustain-

ability and the differences between sustainable HRM and

strategic HRM as well as the role HRM plays in an overall

CSR discussion (Gond et al. 2011; Jamali 2008; Jamali

et al. 2015). Especially, the boundary and overlap between

CSR and HRM needs more discussion (Gond et al. 2011).

Sustainable HRM as a term may refer to the type of people

management that brings the social dimension of HRM to

the CSR discussion and represents the ‘‘good HRM’’ that

Gond et al. (2011) mention.

Conclusions

Based on a general discussion of sustainability and stake-

holders in organizations (e.g. Hörisch et al. 2014), business

ethics, green HRM, social responsibility, responsible

leadership, and the ethical aspects of human resource

management (HRM) have received increasing attention

among scholars (Cooke and He 2010; de Gama et al. 2012;

Gond et al. 2011; Greenwood 2013; Jackson and Seo 2010;

718 M. Järlström et al.

123

Morgeson et al. 2013; Renwick et al. 2008, 2013, 2016;

Voegtlin et al. 2012; Waldman and Siegel 2008). CSR,

responsible leadership, ethics in HRM, and sustainable

HRM all relate in different ways to the social responsibility

and stakeholders. One important question a stakeholder

theory asks is: ‘‘What responsibility does management

have to stakeholders?’’ (Freeman et al. 2004, p. 364).

Hence, we focused on sustainable HRM (Clarke 2011;

Ehnert 2009a; Ehnert et al. 2014), which seeks to connect

corporate sustainability to HRM practices and develop

sustainable business organizations with sustainable HRM

systems. By focusing on top managers’ responses, we

identified four dimensions of sustainable HRM and corre-

sponding broader responsibility areas, and illustrated how

they are linked to salient stakeholders. This relationship has

previously attracted only limited research attention (for

exceptions see, Guerci and Shani 2013; Schuler and Jack-

son 2014), and is a step forward in conceptualizing the

sustainable HRM concept (Ehnert et al. 2014). The findings

indicated that although employees are a key stakeholder

group in sustainable HRM and salient based on their

legitimacy and power, sustainable HRM relates to multiple

stakeholders supporting stakeholder theory (Freeman

1984). Thus, sustainable HRM seems to bring the people

and respect for humanity back to the human resource

management (Cleveland et al. 2015) and widen the future

HR perspective to include both internal and external

stakeholders as well as more employee-oriented thinking in

organizations turning the leadership also to a more

responsible direction (Gond et al. 2011; Voegtlin et al.

2012). Based on our findings, sustainable HRM relates

CSR to organizational level, and leads towards ‘good

HRM’ (Gond et al. 2011) by bringing new responsibility

areas into social responsibility (Carroll 1991). Therefore,

there is a call for further studies which integrate CSR and

HRM (Jamali et al. 2015; Gond et al. 2011) to extend our

knowledge and understanding of the connection between

CSR and HRM and sustainability in HRM. Our focus on

sustainable HRM with a keen relation to CSR is connected

to a wider discussion on business ethics (Grace 1995)

raising thus a need for further research on the relationship

between sustainability in HRM and business ethics.

Sustainable Human Resource Management with Salience of Stakeholders… 719

123

Appendix 1: Structure of the Data

Illustrative Quotes Related to Sustainable HRM Categories Aggregate Dimensions

“Distribute and allocate human resources in the most suitable way. Neither too
sloppy nor too tight.”
“To ensure recruitment in difficult fields, such as nursing.”

“I think that sustainable human resource management is taking care of
employees competencies so that it benefits the business. It is the best way to
maintain jobs and job satisfaction.”
“In my opinion competence management is extremely important from the
sustainability perspective since that is one way the company stays competitive,
but also the individuals stay competitive in the job markets in case they need to
change jobs.”

“Pay should be based on the job demands and on a transparent payroll
system. Rewards should apply to the whole personnel, not just the top
management.”
“Pay and job tasks need to be synchronized taking the level of training into
account.”

“Particularly in expert organizations, career planning should play a central role.”
“Committing to the right kind of competencies and developing those so that a
win-win situation is created. Caring, and building a personal career path.”

“Giving people the opportunity to participate in planning and developing their
own work has positive effects on motivation, and that way the responsibility
for individuals’ work is shifted to the employees.”
“We make sure that it is possible for everyone to develop in their own job by
discussing their interests and needs with every employee.”

“Flexibility in terms of working hours will play an even bigger role as an
employer offering in the future. Daily flexibility or longer leave periods help
employees (to balance their lives and) wellbeing, but are demanding for HR
planning. In the future, those organizations able to offer flexible working hours
will have an advantage.”
“Money, job descriptions, flexible working hours, remote working, vacations,
retirement – there needs to be room for flexibility in these areas.”

“Includes all of the issues related to the employment relationship, and as such
is also linked to the collective agreements, laws etc. At the same time it speaks
of the organization taking responsibility for the employment relationship.”
“The organization acts in accordance with the agreements and decisions made
(nationally and locally).”

“In the recruitment process, ethnic groups, age structures, gender and health
are considered in order to get a diverse workforce which will then be led well.”
“A big employer needs common, equal, and just rules for everyone but there
needs to be room for well grounded flexibility too.”

Diversity
management

“Ethicality is the cornerstone of good human resource management even now.
In the future, it will be the lifeblood of good human resource management, as
well as of management in general.”
“As a company we will act ethically in everything we do and towards everyone.
We treat our personnel equally as far as that is possible. We address difficult
matters. We invest in leadership and that way make sure that the company has
good leaders. We take into account the special needs of our personnel.”

“Walk as you talk. For example, if you demand your followers cut travelling
costs, do so yourself too.”
“A leader’s decisions should be well grounded, transparent, and
understandable. The decisions need to be based on the same principles in
every case. If exeptional decisions need to be made, those need to be well
justified.”

Participation

Career planning

Rewarding

Ethicality as a
cornerstone of

HRM

Exemplary behavior
as a manager

Obeying laws &
regulations

Flexibility

Competence
development

Recruitment and
allocation of human

resources

Transparent
HR practices

Justice &
equality

720 M. Järlström et al.

123

Appendix 2: Structure of the Data

Illustrative Quotes Related to Sustainable HRM Categories Aggregate Dimensions

“Employee development, work motivation, and commitment to their work, all of
this is based on good leadership.”
“To be easily approachable. Possible to contact in difficult matters. A leader
does not underestimate anybody.”
“The employees need to be able to trust their superior in multiple areas of
working life.”
“The individual differences are taken into account in leadership”
“People and only people do all the work. Only if you understand the needs,
motivation, and activities of these people, can sustainable results be
achieved.”
“Motivation stems from the feeling that your work is meaningful and
appreciated. A motivated employee is responsible, hard-working, inventive,
committed and feels good.”

“Both mental and physical stress factors need to be taken into account and we
must strive to reduce them.”
“To take care that no one gets hurt or perish at work.”
“Well organized occupational health and safety and occupational health care
will serve both sides [employees, employer].”
“The importance of mental well-being grows in future.”
“How do we treat each other?”

“Human resource management is not a separate task but is planned to support
“HR is part of strategic management and it follows the changes in the business
environment from the business perspective, not only from the HR perspective;
and it will seek solutions to reach business goals.”

“It is not wise to take a back seat. There is always something to learn and
improve. There are numerous improvement opportunities ranging from human
resource management to organizational development.”

“Sustainability is a moving and developing target. One needs to be aware of the
direction the interpretations of responsible business are taking and how they
affect human resource management.”

“When making decisions one needs to keep the totality of the business in mind
and think what is best in the long-term.”
“The most important thing is to create opportunities for comprehensive human
resource managment while keeping the company vision, strategy, economic
realities and the operating environment in mind.”

“To do right things in a profitable way. HR managers need to look at things
from the business perspective and from the profitability perspective. The
human resource matters behind the numbers are important too.”
“Business thinking is one of the cornerstones of HR-management.”

Leadership style

Caring & support of
employees

Proactiveness in
actions

Long-term thinking

Business
knowledge of HR

leader

Integration of HRM
and strategy

Profitability

Employee
Well-being

Sustainable Human Resource Management with Salience of Stakeholders… 721

123

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• Sustainable Human Resource Management with Salience of Stakeholders: A Top Management Perspective

Abstract
Introduction
The Scope of Sustainable HRM
Stakeholders of HRM and Sustainable HRM
Methodology
Context of the Study
Data Collection and Sample
Data Analysis
Results
The Dimensions of Sustainable HRM
Justice and Equality
Transparent HR Practices
Profitability
Employee Well-Being
Stakeholders of Sustainable HRM
Discussion
Theoretical Contributions
Practical Implications
Limitations of the Study and Suggestions for Future Research
Conclusions
Appendix 1: Structure of the Data
Appendix 2: Structure of the Data
References

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Soft skills to enhance graduate employability:
comparing students and employers’ perceptions

Chiara Succi & Magali Canovi

To cite this article: Chiara Succi & Magali Canovi (2020) Soft skills to enhance graduate
employability: comparing students and employers’ perceptions, Studies in Higher Education, 45:9,
1834-1847, DOI: 10.1080/03075079.2019.1585420

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Soft skills to enhance graduate employability: comparing students
and employers’ perceptions
Chiara Succi and Magali Canovi

ESCP Europe Business School, Turin, Italy

ABSTRACT
The aim of this article is to show the increased relevance of soft skills in a
continuously changing environment. A research was carried out to
examine and compare students’ and employers’ perceptions regarding
the importance of soft skills in different European countries.

Results

show that 86% of respondents indicate an increased emphasis on soft
skills over the last 5–10 years and that companies consider soft skills
more important than students/graduates. Furthermore, major differences
have also been identified in the ranking of the 20 soft skills listed in this
paper, indicating different levels of priorities. This paper suggests that
companies and Higher Education Institutions (HEIs) need to work
together not only to increase students’ awareness of the importance of
soft skills but also to guide them in taking individual responsibility to
acquire and develop these essential skills in order to continuously adapt
to the changing labour market and improve their employability.

KEYWORDS
Soft skills; graduate
employability; human
resources development;
higher education
management

Introduction

One of the most discussed and controversial debates within the current literature on higher edu-
cation management relates to the quality of graduates and their lack of soft/transferable skills, essen-
tial in today’s labour market and necessary to increase individual employability (Crossman and Clarke
2010; Clarke 2017). The ‘blame game’ has been going on for over three decades between employer
groups and higher education with regard to the responsibility of graduate employability. Employers
have blamed and criticized higher education for not preparing students adequately for the current
labour market, and thus continuously highlighting students’ lack of transferable skills (Hurrell
2016). Although, throughout the years, HEIs seem to have responded to this criticism and progress-
ively addressed this issue, improvements in students’ acquisition of transferable competences still
seem to be missing. Accordingly, should the soft/transferable skills gap – identified by employers
– be attributed to higher education institutions, graduates or employers themselves through adopt-
ing inadequate recruitment and graduate development processes (Hurrell 2016; Griffiths et al. 2018)?

This paper contributes to this dominant debate within the higher education management litera-
ture by directly involving students and by arguing that they have a different understanding of
employability, as they rank the importance of soft/transferable skills differently from employers.

Graduate employability

While graduate employability has received increased attention over the last decades, this complex
concept still remains under-explored within the current literature on higher education (James

© 2019 Society for Research into Higher Education

CONTACT Chiara Succi csucci@escpeurope.eu

STUDIES IN HIGHER EDUCATION
2020, VOL. 45, NO. 9, 1834–1847
https://doi.org/10.1080/03075079.2019.1585420

http://crossmark.crossref.org/dialog/?doi=10.1080/03075079.2019.1585420&domain=pdf

http://orcid.org/0000-0002-3868-5354

mailto:csucci@escpeurope.eu

http://www.tandfonline.com

et al. 2013; Clarke 2017), with no clear understanding of what actually constitute graduate employ-
ability skills (Griffiths et al. 2018). Hillage and Pollard (1998, 1) defined graduate employability as ‘the
knowledge, skills and attitudes that graduates are expected to be able to demonstrate they have
acquired in higher education’ (Clarke 2017, 3). The literature on employability has extensively
explored the continuous changes within the external environment and the impacts of these
changes on the job market and on graduate employability (Forrier and Sels 2003; Fugate, Kinicki,
and Ashforth 2004; Sung et al. 2008). Scholars noted that changes such as increased globalization,
greater job insecurity, massification of higher education and the shift to a knowledge economy
have led to the need for graduate employability (Bauman 2003; Sin and Neave 2016; Clarke 2017).
While in the past, a higher education qualification was viewed as a sure route to success and employ-
ability (de Weert 2007), the current situation shows that graduates are increasingly confronted with
numerous challenges and have to face reality either through accepting lower level positions, or occu-
pations that are outside of their area of competence (Clarke 2017). Scholars highlight the fact that
nowadays graduates are no longer able to rely on their higher education qualification, but have to
be flexible and adapt to the changes in the labor market, through developing and achieving a ‘pos-
itional advantage over other graduates with similar academic and class-cultural profiles’ (Tomlinson
2012, 20). It has been argued that in order to achieve a positional advantage, graduates need to
develop and acquire a combination of skills, notably core/hard skills and transferable/soft skills
(Clarke 2017). It is important to note that over the last decades, research has largely focused on
the technical/hard skills and know-how required by the labor market (Balcar 2016; Eshet 2004)
whereas only limited attention has been devoted to the investigation of soft/transferable compe-
tences (Seligman 2002; Ciappei and Cinque 2014). This is quite surprising, considering the importance
of soft skills in relation to graduate employability. Archer and Davison (2008) pointed out that the
International Employee Barometer (IEB) survey confirmed the importance of soft skills amongst
employers. They argue that employers attributed higher importance to soft skills compared to stu-
dents’ higher education qualifications. Similarly, the World Economic Forum identified 10 out of 16
‘crucial proficiencies in the twenty-first century’ to be related to employees’ soft competencies
(Deloitte Access Economics 2017, 1). The following section will thus discuss the notion of soft
skills, highlighting the inconsistency in scholars’ attempts to define the concept.

Soft skills development

There are different ways of defining and classifying ‘soft skills,’ notably as life skills (WHO 1993),
twenty-first century skills (Moore and Morton 2017), transversal skills, generic competences as well
as key competencies for a successful life, a well-functioning society (|OECD 2003, 2012) and lifelong
learning (EU 2006). Life skills, social skills, interpersonal skills, leadership skills, transversal compe-
tences, social competences and meta-competences are commonly used to refer to the ‘emotional
side’ of human beings, in opposition to the IQ (Intelligent Quotient) component related to hard
skills (Delamare-Le Deist and Winterton 2005; Shalini 2013). According to Heckman and Kautz
(2012, 451), ‘soft skills [are] personality traits, goals, motivations, and preferences that are valued in
the labor market, in school, and in many other domains […].’ They are ‘a mix of dispositions, under-
standings, attributes and practices’ (Yorke 2006, 4). Knight and Page (2007) describe them as wicked
competences, as it is very difficult to define them because they can assume different forms in
different contexts and they keep developing along the entire lifetime (Ciappei and Cinque 2014).

A working definition we propose for this paper is taken from Haselberger and other authors within
the ModEs project (2012, 67): ‘Soft skills represent a dynamic combination of cognitive and meta-cog-
nitive skills, interpersonal, intellectual and practical skills. Soft skills help people to adapt and behave
positively so that they can deal effectively with the challenges of their professional and everyday life.’
In this instance, soft skills relate to a vast range of interpersonal and social qualities and competences,
transferable across economic sectors and industries (Hurrell 2016; Deloitte Access Economics 2017).
These soft skills include communication, teamwork, problem solving, critical and innovative thinking,

STUDIES IN HIGHER EDUCATION 1835

creativity, self-confidence, ethical understanding, capacity of lifelong learning, the ability to cope with
uncertainty, as well as the willingness to accept responsibility (Harvey 2000; Andrews and Higson
2008; Kalfa and Taksa 2015; Clarke 2017; Moore and Morton 2017). Some studies (Manpower
Group 2014) distinguished and classified soft skills according to the level of seniority within the
organization (i.e. junior, manager and executive) or considering the scope of action (i.e. personal,
social and methodological). The empirical study presented in this paper adopted the list of soft
skills defined and extensively described by the ModEs European Project (Table 1; Haselberger et al.
2012).

It is argued that the acquisition of these soft skills allows students to better adapt to the organiz-
ational culture, take initiative and contribute to organizational success (Harvey 2000). Similarly,
emotional intelligence studies support the hypothesis that interpersonal skills are more likely to
predict successful careers (Goleman 1995; Goleman and Boyatzis 2008; Claxton, Costa, and Kallick
2016) and are necessary for the rise in teamwork, the rapid pace of globalization, the capacity to dia-
logue in a cross-cultural environment and the growing need to retain talent in organizations.

Various documents issued by the European Commission (EC 2012a, 2012b, 2013) as well as a
numerous human resources experts (Grugulis and Vincent 2009, ISFOL 2012) pointed out that ‘soft
skills’ are closely connected with employability, particularly for young graduates entering the labor
market. According to these documents, companies need a more skilled workforce and opportunities
should be given to young people to develop soft skills, such as entrepreneurial skills, coping skills (i.e.
the capacity to deal with a problem in a creative way), learning to learn and other skills (such as the
ability to work in teams, to communicate clearly and effectively, to adapt to different cultural con-
texts, to solve problems, to manage conflicts, to show endurance in complicated or stressful situ-
ations, etc.) which will enable them to successfully transition between full-time education and
entering the labor market.

Table 1. List of the 20 soft skills utilized in the study (Haselberger et al. 2012; Succi, 2018).

Category Skill

Personal 1. Being Committed to Work – make a commitment to the organisation and understand its specific
characteristics

2. Being Professionally Ethical – take actions while bearing in mind the principles and ethics of the profession
in daily activities

3. Being Tolerant to Stress – show endurance in complicated or stressful situations
4. Creativity/Innovation Skills – contribute new ideas to develop improvements in the products or services of
the organisation as well as in the activities performed in the job

5. Learning Skills – provide a self-assessment of necessary knowledge (theoretical or practical) and take
measures to acquire and implement this knowledge

6. Life Balance Skills – manage successfully the frequent conflicts between life and work
7. Self-Awareness Skills – grasp our real weaknesses and strengths

Social 8. Communication Skills – transmit ideas, information and opinions clearly and convincingly, both verbally and
in writing, while listening

9. Conflict Management & Negotiation Skills –conciliate different opinions to reach an agreement that
satisfies everyone

10. Contact Network Skills – develop, maintain, and foster contacts
11. Culture Adaptability Skills – carry out managerial and entrepreneurial processes in multicultural
environments

12. Leadership Skills – motivate and guide others to get them to contribute effectively
13. Team-Work Skills – to build relationships based on participation and cooperation with other people

Methodological 14. Adaptability to Change Skills – redirect the course of action to meet goals in a new situation
15. Analysis Skills – draw conclusions and forecasts for the future by acquiring relevant information from
different sources

16. Continuous Improvement Skills – perform the activities, duties and responsibilities inherent to the job
under quality standards and strive for excellence

17. Customer/User Orientation Skills – identify, understand and satisfy efficiently the needs of customers
18. Decision Making Skills – make the decisions necessary to achieve objectives quickly and proactively +B18
19. Management Skills – set goals and priorities through the selection and distribution of tasks and resources
20. Results Orientation Skills – make organisational efforts profitable while having always in mind the goals
pursued

1836 C. SUCCI AND M. CANOVI

Although there seems to be a general consensus and understanding within both academia and
industry regarding the importance of transferable skills, it seems that employers, higher education
providers, and young people do not understand each other. They operate in ‘parallel universes’
and it has been argued that young people are often not acquiring a sufficient portfolio of general
skills during their university studies (Mourshed, Patel, and Suder 2014). The following section of
this paper will address these different stakeholder groups – HEIs, employers and students – involved
in graduates’ employability development.

Main stakeholders

It is well known that decreasing funds, lifelong learning needs, and online teaching possibilities are
threatening to upend established ways of teaching and learning (Cantoni, Botturi, and Succi 2007;
Bowen 2013). It has been claimed that the higher education model of ‘lecturing, cramming and exam-
ination’ has barely changed for centuries (The Economist 2014), but that, now, HEIs need to adapt to
the changing needs of society by improving their ‘resources, challenges and support relating to the
awareness of graduate identity and self-perception of employability, if graduates are to remain rel-
evant in rapidly changing labour market landscapes’ (Griffiths et al. 2018, 891). Within the literature,
in fact, there is a general consensus amongst scholars regarding the crucial role of higher education
institutions in equipping graduates with the required knowledge, skills and abilities needed to be
considered by the job market as ‘lifelong critical and reflective learners’ (Harvey 2000). Higher edu-
cation should help students build a wider base on which they can build their future professional
competences.

Sin and Neave (2016) highlighted HEIs’ primary role in preparing students for the current labor
market by developing ‘ready-for-work’ skills. Similarly, Andrews and Higson (2008) emphasised in
their study on graduate employability conducted in four European countries (e.g. Austria, Slovenia,
Romania, and the UK), that HEIs need to develop programs in which students are actively encouraged
to acquire and develop their soft skills. The authors go on by saying that HEIs across Europe need to
make sure that graduates are equipped with more than just hard skills and capabilities. In this
instance, HEIs have a crucial role in equipping students and graduates with the necessary skills.

Notwithstanding the importance of developing graduates’ soft skills, HEIs seem to have largely
concentrated on the development of students’ hard/technical skills. As a consequence, HEIs have
come under pressure from a variety of stakeholders, to put increased emphasis on developing stu-
dents’ soft skills (Tomlinson 2012; Sin and Neave 2016). Particularly governments/policymakers
and employer groups view HEIs as ‘drivers of economic growth’ (Sin and Neave 2016) and have cri-
ticized HEIs for not adequately preparing graduates for the labor market (Moreau and Leathwood
2006; Tomlinson 2012; Clarke 2017). Employers’ need to find people with the ‘right attributes’ has
laid down an important challenge to HEIs, which are accused of being detached from the business
world and no adequately preparing people to enter the job market (Bennis and O’Toole 2005;
Dunne and Martin 2006). It has been argued that graduates are not fit for purpose (Sin and Neave
2016; Griffiths et al. 2018), as HEIs are primarily focusing ‘too rigidly on academically orientated pro-
vision and pedagogy, and not enough on applied learning and functional skills’ (Tomlinson 2012,
412). As a response to this increased pressure from policymakers and employers, HEIs have started
to pay increased attention to graduate employability through developing and integrating a
number of skill-based learning outcomes into their degree programs (Kalfa and Taksa 2015; Clarke
2017). University teaching staff is increasingly required to develop and adopt pedagogical tools to
help graduates acquire transferable skills throughout their time at university (Archer and Davison
2008; Kalfa and Taksa 2015).

Particularly employer groups have complained about the lack of graduates’ transferable skills
(Hurrell 2016), and expect graduates, upon commencing employment, to be employment-ready
(Andrews and Higson 2008). While graduates might be regarded as a valuable work force in ‘enhan-
cing value-added products and services’ (Tomlinson 2012, 25), as well as ‘drivers of innovation and

STUDIES IN HIGHER EDUCATION 1837

technological progress’ (Humburg and van der Velden 2015, 482), employers highlight graduates’
inability to transfer their acquired skills to real-life situations (Shuayto 2013). 54% of employers in
the UK perceived graduates to be highly qualified but lacking soft skills, resulting in many vacancies
being unfilled (Llewellyn Smith 2015). Indeed, it has been argued that after the war for talent
(Michaels, Handfield-Jones, and Axelrod 2001), multinational companies are struggling to develop
leaders, who are able to operate in an increasingly complex environment.

While over the past three decades, employers have continuously criticized graduates’ lack of trans-
ferable skills, Clarke (2017, 11) argued that ‘little has changed from an employer perspective.’ Various
scholars highlighted the need for employers to engage in more effective and efficient communi-
cation, collaboration and partnerships with universities in order to address this matter (Archer and
Davison 2008; Sin and Neave 2016; Clarke 2017). Archer and Davison (2008) for example suggested
that employers should actively participate in the development of graduate transferable skills through
‘offering skill sessions on campus,’ ‘taking an increased number of graduates on placement/intern-
ship’ and ‘developing and delivering business case studies’ (p. 13). Adopting these measures
would allow for an improved cooperation between HEIs and employer groups (Sin and Neave 2016).

Having addressed the employer groups’ and HEIs’ roles in equipping students with the necessary
skills, knowledge and abilities required to successfully enter the labor market, an important question
has been raised within the literature as to how far responsibility for employability and the develop-
ment of transferable skills is individualized (Sin and Neave 2016). In other words, should students take
individual responsibility for their employability? While from a European perspective, the Bologna
declaration of 1999 recognized employability as a key objective, policymakers stressed the impor-
tance of individuals’ responsibility and effort in developing these employability skills (Sin and
Neave 2016). In this instance, HEIs adopt an assisting/supporting role by increasing graduates’ aware-
ness of labor market requirements and assisting them in developing the necessary skills (Archer and
Davison 2008). Although a number of stakeholders, particularly employers and policymakers, have
highlighted the importance of graduate employability and the acquisition of soft skills, from a gradu-
ate perspective, employability was attributed less importance and received much less consideration
(Sin and Neave 2016). Accordingly, this paper contributes to this debate and explores students’ as
well as employers’ perceptions of the importance of soft skills in enhancing graduate employability.

Methodology and research design

The literature review shows a growing interest in soft skills, a lack of academic programs devoted to
their development, and the need for companies/employers to engage in more effective and efficient
communication, collaboration and partnerships with universities in order to address this matter.
Moreover, there is a mismatch in the reciprocal expectations of companies, students and universities,
and no clear starting point for a discussion.

This research has thus been designed to comprehend how, on one side, employers perceive the
importance of soft skills in recruitment and development processes and, on the other side, how stu-
dents/recent graduates perceive the importance of soft skills in their first job and in their career
development. An exploratory study has been developed to achieve the research objectives, combin-
ing quantitative (i.e. surveys) and qualitative (i.e. focus groups and interviews) research methods.
First, a pilot study has been conducted in Italy followed by the main empirical study conducted
both in Italy and Germany. A business school was selected for the data collection. The school is
based in six different countries, counts more than 4500 students a year in degree programs, and col-
laborates on a regular basis with a large number of multinational companies.

The first phase of the research was carried out in February 2016 and was intended to verify the
interest of the corporate community on the topic and to create a common framework to build
further analysis. A pilot survey was sent to a group of Italian HR managers on the occasion of the
career day of the business school. Results of the pilot study confirmed that the development of
soft skills is a top priority on the agenda of Italian HR managers and, in particular, Teamwork,

1838 C. SUCCI AND M. CANOVI

Communication, Results orientation, and Learning skills were considered primary skills when assessing
and looking to employ young graduates. In their opinion, universities should encourage students to
face a wider variety of situations (Succi, 2018). They need to be able to step out of their comfort zone,
develop cognitive skills and ultimately apply what they have learned, to work with others, and to
solve problems.

Finally, respondents were also asked to express their opinion about the reliability and validity of
the soft skills listed in the study (Haselberger et al. 2012). Their comments and a set of individual inter-
views with HR managers brought to the refinement of a final list of 20 soft skills (Succi, 2018). More-
over, as the questionnaire was successfully tested and utilized by the researchers, it is argued that the
requirements for validity have been met.

Following the pilot study with Italian HR managers, the authors decided to enlarge the scope of
the research through extending the number of participants, both for employers and for students/
recent graduates, with no more than 2 years of experience. Other countries, in which the school is
present, in particular Germany, have also been included in this research.

The second phase of the research was conducted in the period between January and June 2017.
The target group was composed by two populations. On one side, the study included 1200 currently
enrolled masters’ students and recent graduates. On the other side, 800 HR managers were selected,
within the network of the school. The email questionnaire was sent out to the target groups for the
first time in March 2017, followed by an intense recall phase during the months of April and May.

The email questionnaire sent out to employers and students/graduates was divided into two sub-
sections: (a) perceived importance and ranking of soft skills; (b) demographic information, in order to
address the following research questions.

. RQ1: Which soft skills are ranked more important by respondents?

. RQ2: Are employers satisfied with the level of soft skill development amongst graduates, done by
HEIs?

. RQ3: Do employers and students/graduates perceive the importance of soft skills differently?

. RQ4: Are there any differences in perception among employers regarding the importance of soft
skills?

The first section of the questionnaire investigated the importance of soft skills compared to hard
skills and proposed the list of 20 soft skills, divided into three categories, to measure the perceived
importance of each of them. The respondents were asked to rate them on a Likert-type scale from 1
(not important at all) to 5 (very important).

The second section of the questionnaire focused on the collection of demographic data of
employers and the companies in which they operate as well as of students’ and graduates’ work
experience. In particular, researchers asked to indicate the area of business, the size and country
of the headquarter of each company, plus their level of internationalization. On the other side, stu-
dents and, especially, graduates were required to describe in detail the companies of their previous
work placement as well as their current job. The online questionnaire was distributed simultaneously
to the two populations investigating the same issues. A 21% response rate was obtained with 425
people participating in the study and 300 completing the questionnaire, among which 169 stu-
dents/graduates and 131 employers.

Description of the sample

Employers, participating in the survey were mainly Italian (50%) and German (35%) and equally dis-
tributed between women and men. The large majority (42%) are middle or senior managers and 20%
of respondents hold a CEO or executive position. 35% of respondents were born in the 1970s and
33% in the 1980s (the others are born before 1970). The majority of employers are working for big
companies 36% (more than 10,000 employees) with international activities (13% is headquartered

STUDIES IN HIGHER EDUCATION 1839

in the USA). Sectors in which companies operate are mainly finance, insurance and consulting (23%),
IT, media and digital (26%), industry and production (16%), and FMCG (12%).

The other sample is formed by 78% of students and by 22% of recent graduates. They come
mainly from Italy (37%) and Germany (46%) and from other European countries (17%). There is a
slight majority of male participants (59%). Furthermore, the majority of participating students under-
took at least one internship and 44% of students have done more than 3 internships. Almost all par-
ticipating students have international experience and they either worked in large companies (more
than 10,000 employees) or in small ones (below 50 employees). Students mainly worked in industry
and production (20%), consulting, insurance and finance (21%), FMCG (14%) or IT, media and digital
(12%) (Table 2).

A descriptive statistical analysis of the data was conducted to answer two research questions. First,
the two datasets (i.e. companies and students/graduates) have been analyzed separately to measure
the importance perceived by each population and to define the ranking of soft skills. As a second
step, an independent T-test analysis has been conducted to compare the means of the two indepen-
dent groups, in order to determine whether there was statistical evidence that the associated popu-
lation means were significantly different.

Results

The large majority of respondents (85.5%) – both employers and students – indicated an increased
emphasis on soft skills over the last 5–10 years and the need for managers and academics to devote
more attention to soft skills. Addressing the first research question (RQ1), respondents were asked to
assess each soft skill on a 5-point Likert Scale – 1 = not important, 5 = very important. Therefore, a
ranking of the 20 soft skills has been built based on their average (Table 3). Cronbach’s Alpha test
has been calculated to verify the internal consistency of the tool and the value of α = 0.823
confirmed the reliability of the instrument utilized.

It emerged that Communication skills, Being Committed to work and Teamwork skills are ranked as
the most important soft skills to enhance graduate employability, confirming also the trends indi-
cated by Deloitte (2017) in their annual report on ‘Global Human Capital Trends.’ Similarly,
Andrews and Higson (2008) – investigating graduate employability in four European countries –
found that team-working skills, being able to think innovatively, as well as oral communication skills

Table 2. Sample of the study.

Employers Students

N of respondents 131 169
Gender Male 47% 59%

Female 53% 41%
Nationality Italy 50% 37%

Germany 35% 46%
Others 15% 17%

Sector Finance, insurance and consulting 23% 21%
FMCG 13% 14%
Industry and production 16% 20%
IT, media and digital 26% 12%
Others 22% 33%

Role CEO/executives 20%
Middle managers 42%
Others 38%

Age Before 1970 35%
1971–1980 33%
After 1981 31%

Company size Below 50 employees 12%
Between 50 and 499 18%
Between 500 and 9.999 34%
More than 10,000 employees 36%

1840 C. SUCCI AND M. CANOVI

are a vital part of the graduate portfolio. Although these skills are perceived as highly important,
employers have, however, complained that graduates did not develop these particular soft skills
during their university studies (Robles 2012).

On the contrary, Life balance skills, Leadership skills and Management skills are ranked of lowest
importance. Possibly, these skills have not been considered essential, by employers, when recruiting
a young graduate, and, by students/graduates, at the beginning of their career. In fact, as reported in
the literature review, several studies differentiated between the soft skills required for an entry pos-
ition, a managerial or rather an executive one (Manpower 2014). Surprisingly, Culture adaptability
skills were not considered to be of high importance, despite the internationality of the target popu-
lation. Future research in this area could investigate this matter further.

Furthermore, in relation to the second research question (RQ2), employers were asked about their
satisfaction with HEIs’ preparation of graduates, and the development of graduates’ soft skills. The
large majority of respondents (60.2%) indicated that students are not well or very well prepared. In
qualitative comments, they indicated a lack of self-awareness and, in particular, the ability to identify
personal strengths and weaknesses. Respondents distinguished clearly between the level of prep-
aration provided by business schools or by universities, which offer less exposure to the ‘real
world’ conveyed, for example, by internships, case studies and corporate testimonials. Finally, they
reflected on graduates’ unrealistic expectations regarding the corporate world and their lack of
responsibility in acquiring and developing soft skills.

Addressing the third research question (RQ3), results show that students/graduates assessed soft
skills less important than employers when compared to technical skills. In fact, considering the var-
iance of data (Table 4), a substantial difference has been identified in how the two populations per-
ceive the importance of soft skills. Explanations for these differences can probably be found through
further investigating the level of work experience of the two samples of participants.

Furthermore, a T-test analysis has been conducted to go deeper in the comparison of the two
samples and to describe how perceptions differ on each single soft skill. Results show several signifi-
cant differences on how soft skills were ranked (Figure 1).

In particular, the soft skill ranked more important by HR managers (compared to graduates) is
Being professionally ethical. The other soft skills ranked significantly higher (Figure 1) by employers
are: Adaptability to change, Creativity and Innovation, Customer/User Orientation and Teamwork. On

Table 3. Ranking of the 20 Soft Skills amongst all participants.

All Participants
Students/
Graduates Employers

Rank Order Variable Mean Std. Deviation Mean SD

Mean SD

1 Communication Skills 4.67 0.539 4.73 0.509 4.58 0.568
2 Being Committed to Work 4.61 0.638 4.54 0.707 4.69 0.526
3 Team-Work Skills 4.56 0.703 4.45 0.794 4.71 0.533
4 Learning Skills 4.43 0.771 4.33 0.843 4.55 0.649
5 Being Tolerant to Stress 4.41 0.662 4.44 0.680 4.37 0.637
6 or 7 Analysis Skills 4.38 0.692 4.47 0.716 4.27 0.644
6 or 7 Continuous Improvement Skills 4.38 0.717 4.35 0.792 4.42 0.607
8 Results Orientation Skills 4.37 0.708 4.31 0.773 4.44 0.610
9 Adaptability to Changes Skills 4.31 0.702 4.19 0.766 4.47 0.574
10 or 11 Customer/User Orientation Skills 4.13 0.891 3.98 0.991 4.31 0.703
10 or 11 Self-Awareness Skills 4.13 0.775 4.12 0.802 4.13 0.741
12 or 13 Contact Network Skills 4.10 0.859 4.27 0.809 3.88 0.872
12 or 13 Creativity/Innovation Skills 4.10 0.825 3.98 0.896 4.25 0.697
14 Decision Making Skills 4.07 0.803 4.15 0.880 3.97 0.681
15 Being Professionally Ethical 4.06 0.917 3.75 0.965 4.47 0.661
16 Conflict Management & Negotiation Skills 4.03 0.806 4.15 0.799 3.87 0.791
17 Culture Adaptability Skills 3.96 0.917 3.90 0.998 4.03 0.797
18 Management Skills 3.95 0.841 4.05 0.844 3.83 0.824
19 Leadership Skills 3.80 0.951 3.76 1.038 3.85 0.827
20 Life Balance Skills 3.71 0.984 3.72 1.108 3.71 0.802

STUDIES IN HIGHER EDUCATION 1841

the other side, students/graduates rank significantly higher Contact network and Conflict manage-
ment skills. Again these results are likely to be fully understood, analyzing the impact of work experi-
ence and the generational difference component.

When addressing research question four (RQ4), we found some significant differences in percep-
tion among employers regarding the importance of soft skills, when data were analyzed based on
nationality, age, sector, and company size. First, with regards to nationality, we found five significant
differences between German and Italian employers regarding the importance of the following soft
skills: Communication skills, Analysis skills, Being professionally ethical, Contact network skills, and
Culture adaptability skills (Table 5). Being professionally ethical, for example, was considered more
important to Italian employers than German employers, while Analysis and Communication skills
were given more importance by German employers compared to Italian employers. Our results,
however, contradict Andrews and Higson’s (2008) study, which revealed that employers’ perceptions
of the skills and competencies necessary to enhance graduate employability were similar in all four
countries (Andrews and Higson 2008).

Second, when comparing different generations amongst the employer sample, we found that
employers who were born before 1975 ranked the skill of Being professionally ethical higher than
those born after 1976 (Table 5); while Analysis skills and Results orientation skills were ranked signifi-
cantly higher by managers born between 1976 and 1990. These results suggest that comparing
different generations (Culiberg and Mihelic 2016) can also provide insights into explaining differences
in perception between employers and students/graduates.

Third, the analysis by sector (Finance/insurance & Consulting vs. IT/digital) did not reveal any
major differences, except for Leadership skills, which were considered more important within the IT
and digital sector than the financial sector (Table 5).

Table 4. A comparison of students and companies’ answers regarding soft skills importance.

Mean SD

Students Compared to technical/functional skills, how important do you consider soft skills for your future
career?

3.35 0.513

Companies Compared to technical/functional skills, how important do you consider soft skills when hiring
business graduates?

4.43 0.608

Figure 1. A comparison between the rankings of students and companies. Significance indicators: ***p < .0001; **p < .001; *p < .05).

1842 C. SUCCI AND M. CANOVI

Table 5. Significant differences in perception among employers regarding the importance of soft skills, when data are analyzed based on nationality, age, sector, and company size.

Germany Italy
OLD –
>1975

YOUNG –
1976–1990

Finance,
insurance,

and
consulting

IT, TK,
digital and
Media

Below 50

employees

More than
10,000

employees

Mean SD Mean SD
Mean

Difference Mean SD Mean SD
Mean

Difference Mean SD Mean SD
Mean
Difference Mean SD Mean SD
Mean

Difference

Analysis Skills 4.51 0.5466 4.09 0.660 3,531(109) 4.14 0.577 4.39 0.662 −2041 (109) 4.38 0.561 4.38 0.604 −0.021 (61) 4.07 0.829 4.38 0.61 −1.54 (59)
p < .001 p < .05 p > .05 p > .05

Being Professionally
Ethical

4.21 0.7204 4.55 0.5871 −2757 (110) 4.64 0.53 4.32 0.72 2609 (110) 4.57 0.679 4.38 0.739 1034 (62) 4.53 0.64 4.54 0.69 −0.05 (59)
p < .05 p < .05 p > .05 p > .05

Communication Skills 4.70 0.4652 4.45 0.6381 2259 (109) 4.54 0.579 4.67 0.507 −1281 (109) 4.57 0.626 4.67 0.479 −0.716 (61) 4.4 0.828 4.7 0.511 −1653 (59)
p < .05 p > .05 p > .05 p > .05

Contact Network Skills 4.11 0.8493 3.71 0.8966 2372 (109) 3.74 0.803 3.97 0.93 −1.36 (109) 3.87 0.819 4.09 0.723 −1154 (61) 3.67 1.234 4.02 0.802 −1293 (59)
p < .05 p > .05 p > .05 p > .05

Culture Adaptability
Skills

3.80 0.7186 4.20 0.8515 −2569 (109) 3.9 0.789 4.1 0.81 −1298 (109) 4.07 0.799 4.03 0.758 0.201 (61) 3.67 1.113 4.19 0.680 −2206 (60)
p < .05 p > .05 p > .05 p < .05

Customer/User
Orientation Skills

4.45 0.619 4.25 0.771 1473 (110) 4.26 0.694 4.31 0.715 −0.346 (110) 4.23 0.626 4.5 0.663 −1648 (62) 3.67 0.8165 4.32 0.663 −3135 (60)
p > .05 p > .05 p > .05 p < .05

Leadership Skills 3.72 0.71 3.94 0.92 −1341 (110) 3.88 0.746 3.82 0.859 0.373 (110) 3.73 0.6397 4.18 0.673 −2.69 (62) 3.53 1.06 3.87 0.741 −1383 (60)
p > .05 p > .05 p < .05 p > .05

Results Orientation Skills 4.40 0.58 4.49 0.64 −0.748 (110) 4.28 0.64 4.52 0.593 −2021 (110) 4.27 0.64 4.53 0.563 −1748 (62) 4.07 0.704 4.45 0.619 −2004 (60)
0.46 p < .05 p > .05 p < .05

Self-Awareness Skills 4.06 0.85 4.15 0.71 −0.61 (110) 4.14 0.7 4.11 0.812 0.187 (110) 3.97 0.928 4 0.55 −0.177 (62) 3.67 0.976 4.26 0.681 −2.625 (59)
p > .05 p > .05 p > .05 p < .05

S
T
U
D
IE
S
IN

H
IG
H
E
R
E
D
U
C
A
T
IO
N

1
8
4
3

Finally, four significant differences emerged when analyzing the data based on company size.
Small-sized companies (<50 employees) ranked Cultural adaptability skills as more important com- pared to large firms (>10,000 employees) (Table 5). On the other hand, large firms considered
Results-oriented skills, Customer-oriented skills, as well as Self-awareness skills as more essential.

Thus our results did not only reveal differences in perception regarding the importance of soft
skills between employers and graduates/students but also among employers based on nationality,
age, sector and company size.

Discussion and further development

This paper intended to contribute to the discussion regarding the increased relevance of soft skills in
a continuously changing environment in terms of enhancing graduate employability. The importance
of soft skills identified amongst employers confirms that globalization and the shift to a knowledge
economy led to a higher emphasis on graduates’ ability to communicate effectively throughout
different channels, on being self-effective and committed to results, on their capacity to build
relationships in multiple teams, and on their ability to adapt to the external context.

Along the same lines, the results of this research confirmed the need to increase the awareness
of the main stakeholders: students/graduates, employers, and HEIs. In particular, we included stu-
dents/graduates in this research, to reflect on the importance of students’ soft skills development
and to better understand employers’ expectations. Companies were asked to assess students’
preparation and to indicate their priorities, when hiring young graduates. It emerged from the
results that HEIs neither communicate effectively the urgency of soft skills development to stu-
dents, nor do they prepare them adequately to enter the job market. These findings are in line
with Andrews and Higson’s (2008) study on graduates’ and employers’ perspectives of graduate
employability in four European countries. The authors highlight the fact that more needs to be
done by HEIs to enhance graduate employability and urge HEIs to implement work-based learning
programs as a way of providing students with initial work experience and improving their employ-
ment prospects.

Results further reveal major differences in perceptions of the importance of soft skills compared to
technical/hard skills between employers and graduates/students. Significant differences appeared
when the two populations were compared. Interestingly, employers consider more important the
skills of Being professionally ethical, Adaptability to change, Creativity and innovation, Customer/user
orientation and Teamwork, while students consider more important Contact network and Conflict
management skills.

The two stakeholder groups differ in the level of work experience and tend to belong to a different
generation. Future research could investigate further these two components, to gain a better under-
standing of the reasons causing different perceptions of each soft skill between employers and
graduates. Moreover, future studies could enlarge the sample through including other student
groups, coming from different HEIs, to address the limitations brought by having respondents
coming exclusively from one single business school. The point of strength of this study has been
the internationality of the sample, which could even further increase, through extending this
study to other European or non-European countries.

Conclusion

The aim of this paper was to show the increased relevance of soft skills in a continuously chan-
ging environment, as well as to examine the perceptions of employers and graduates/students
regarding the importance of developing soft skills in enhancing graduate employability. Findings
confirmed the increased emphasis on soft skills over the last 5–10 years by both employers and
graduates, while simultaneously revealing major differences in perception between both stake-
holder groups.

1844 C. SUCCI AND M. CANOVI

There are key implications for practitioners working in the field. On one side, employers have to
actively participate in developing students’ as well as graduates’ soft skills; on the other side, acade-
mia needs to build stronger partnerships with the industry and work effectively together to guaran-
tee ready-for-the-job graduates. Finally, students and young graduates need to be made aware of
their individual responsibility in developing soft skills and in adopting a pro-active role in order to
increase their employability. The authors believe that, instead of blaming HEIs for graduates’ lack
of transferable skills, the three main stakeholders identified in this paper need to effectively work
together to achieve the desired outcomes.

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Chiara Succi http://orcid.org/0000-0002-3868-5354

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STUDIES IN HIGHER EDUCATION 1847

• Abstract

Introduction
Graduate employability
Soft skills development
Main stakeholders
Methodology and research design
Description of the sample
Results
Discussion and further development
Conclusion
Disclosure statement
ORCID
References

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