TODAY – Session V

1. Presentation CSR & Human Resource Management – Embedding CSR in the Organisational DNA

2. Break

3. Siemens Presentations

Session V

CSR & Human Resource Management

Embedding CSR in the Organisational DNA

CONTENTS

I. Introduction

II. The Role of human resource management (HRM) in sustainability.

III. A Model of Sustainable HRM built on three Pillars of Sustainability.

IV. Theories related to Sustainable HRM

V. Instruments of Sustainable HRM

VI. Sustainable HR Advantage - Case Studies

I. Introduction

The Definition of Sustainable HRM

Sustainable HRM is defined as “those long-term oriented

conceptual approaches and activities aimed at a socially

responsible and economically appropriate recruitment and

selection, development, deployment, and release of

employees” (Thom and Zuagg, 2004: 217).

I. Introduction

“HR must ensure that a sustainable approach to

managing its employees is part of the business

strategy. […] A truly sustainable business is created

when all employees are aware of how their roles

contribute to the sustainability agenda. […] In this way

HR transforms the business impacts ON employees

into the sustainable impacts OF employees.”

Elaine Cohen, Corporate Sustainability Expert

The Social Responsibility of Business is based on three Dimensions

Internal Social Dimension

Social / Societal Dimension

Environmental Dimension

The Internal Social Dimension

Sustainable HRM falls under the internal social dimension which includes:

•Working conditions - hygiene, health, security, ergonomics …

• Compensation policy - agreements between unions and management for fair salaries for employees …

• Social dialogue in companies - annual interviews, consultation with internal stakeholders …

• Social climate in companies - less strikes, less absenteeism, loyalty to company projects etc.

II. The Role of HR in Sustainability

HR has a two-fold role in terms of sustainability:

1. It must ensure that a sustainable approach to managing employees is part of business strategy; and

2. Employee well-being, health and safety, work-life balance, diversity and inclusion, gender equality, hiring and firing practices, fair rewards, a living wage, employee learning and growth, positive internal communications, open dialogue and employee involvement in the community are all important aspects to pay attention to in terms of managing employees in a sustainable way.

Work-Life-BalanceIndividual R

esponsibility

Em

ploy

abili

ty

Individual

Companies

Strategies Objectives

Instruments Methods Processes Structures

Culture Attitudes Values

Zaugg/Blum/Thom 2001.)

III. Model of Sustainable HRM built of three Pillars of Sustainability

The three Pillars Sustainable HRM

Work-Life-Balance

Growing importance of professional careerGrowing importance of private and family life

Individual Responsibility

Increased autonomy and self-determination in questions of professional development

Employability

Focus on continuous development and professional agility rather than specific activity

*The project was supported by the Swiss Federal Office of Personnel and the European Association of Personnel Management (EAPM).

The three Pillars in practice in Europe

A Survey* of 1016 European companies was conducted by Zaugg, Blum and Thom (2001).

The Aims of the study were to establish:

• An overview of state of the art of HRM in Europe;

• The conception and stage of implementation of sustainable HRM in European companies; and

• Cross-country comparison.

The three Pillars in practice in Europe

Switzerl. Germany Italy France Spain Netherl. Austria England Country Questionnaire Abs. % Abs. % Abs. % Abs. % Abs. % Abs. % Abs. % Abs. %

Mailed Questionnaires

3020 47 500 7.8 500 7.8 500 7.8 500 7.8 500 7.8 400 6.2 500 7.8

Returned Questionnaires

749 73.7 45 4.4 81 8 42 4.1 37 3.6 37 3.6 12 1.2 13 1.3

Return rate 24.8% 9% 16.2% 8.4% 7.2% 6.8% 3% 2.6%

Total of mailed questionnaires 6420

Total of returned questionnaires 1016

Total return rate 15.83%

• Sectors: industry, service providers, trade, transport, public sector, IT, healtchcare, banking, construction, insurance

• Company size: 40% >500 empl; 47% 50-500 empl; 13% <50 empl

Source: Zaugg/Blum/Thom 2001.)

Objectives of HRM in European Companies

1

2

3

4

Economic objectives

Employability

Self-realisation

Pleasure at work

Individual responsibility

Quality of life

Social contacts

Compensation

Social responsibility

Health

Europe Netherlands France

Central Objectives of HRM in European Countries

• Contributing to achievement of economic objectives

• Promoting individual responsibility (90% of questioned companies)

• Ensuring adequate pay and promoting employee health

• Enhancing employability (strong dispersion: 68% of Dutch vs. 22% of French companies)

Conception of Socially Responsible European Companies

Keywords associated with HRM and sustainability :

• HR development: training, continuous education, career planning …

• Employee characteristics: motivation, flexibility, responsibility …

• Leadership: consistency, social skills…

• Staff retention, incentives …

Theories Related to Sustainable HRM The first systematic, theoretically and empirically substantiated

concept for a ‘Sustainable Human Resource Management’ was coined by representatives of the University of Bern who conducted a study of Swiss companies (Ehnert, 2006).

• Current publications on this stream of research include Thom (2002); Thom and Schüpbach-Brönnimann (2003); Thom and Zaugg (2002; 2004); Zuagg (2002); Zuagg, Blum and Thom (2001).

Another stream is the ‘sustainable management of human resources’ investigated by Remer (1993); Müller-Christ and Remer (1999) and Müller-Christ (2001).

• They do not remind actors of their responsibilities or moral obligations for employees or society, but underline the central assumption that it is economically rational to act in a sustainable way if resources are scarce.

Theories Related to Sustainable HRM

Other authors say that in a truly sustainable business employees are aware of how their roles contribute to the sustainability agenda (Bansal, 2005).

Other specific issues are health (Antonovsky, 1987); training (Aragon-Sanchez, Barba-Aragon and Sanz-Valle, 2003; Bandura, 2005); competitive advantage (Barney, 1991; 2002; Grant, 1991; Oliver, 1997); innovation (Evans and Doz, 1998) and retrenchment (Mariappanadar, 2003)

Theoretical approaches important and related to sustainable HRM include sustainable work systems (Kira, 2002); Human Investment Philosophy (Miles and Snow, 1995); People-Centred Management (Pfeffer, 1998); entrepreneurial HRM (Wunderer and Dick, 2000); stakeholder theory (Freeman, 1999) and self-organization theory (Göbel, 1998; Probst, 1987).

Instruments of Sustainable HRM

• Recruitment: requirement & job profiles; HR marketing; labour market research

• Deployment: health management; staff composition (older employees!); advanced working-time management

• Development: encouraging continuous education; career planning; promoting individual responsibility & participation

• HR marketing; image analysis & improvement

• Retention: sophisticated incentive systems

• Disemployment: exit interviews; outplacement

• Management & Leadership: participative management styles; assessment of superiors

Recruitment Employees & Company

Investors & Shareholders

Customers Communities & Government

Integrating sustainable development into the recruitment process.

Are sustainable development issues included in job descriptions and assessment materials?

Monitoring the long-term competency requirements for your company

Has the company identified key sustainable development competencies?

Which competencies will improve productivity and deliver innovation?

Which competencies will enhance the value of the customer proposition?

Which competencies will deliver value to society?

Providing new employees with information about sustainable development policies.

Are sustainability issues included in induction materials?

Using recruitment procedures which support the equitable representation of applicants & recruits in terms of gender, age, ethnic groups, etc.

Are monitoring systems in place to ensure that the workforce is representative of the communities in which it operates?

Is the company at risk of reputational damage or legal challenge?

What are the key diversity issues?

Source: WBCD, 2011

Incentives

Employees & Company Investors & Shareholders

Communities & Government

Incorporating social and environmental considerations within the company’s performance management and appraisal systems.

Are monitoring systems in place?

Are executive bonuses linked to social and environmental performance?

Identifying and supporting an appropriate work/life balance.

Are initiatives in place to promote an appropriate work/life balance within the company? Are systems in place for employees to contribute to decision making processes?

How do employee packages contribute to financial performance?

What are key employee benefit issues?

Encouraging employees to participate in corporate community involvement programmes.

Are employees involved in discussing the company’s choice of community programmes?

What are the most significant social and environmental benefits to which the company could contribute?

Source: WBCD, 2011

Competency Development

Employees & Company Investors & Shareholders

Customers

Including social and environmental issues within employee training and development programmes – at all levels, from technical health and safety considerations on the shop floor, t strategic sustainability issues at the executive management and board level.

Are sustainability-related training programmes in place?

Which training programmes will enhance the value of the customer proposition?

Ensuring that training programmes consider the business risks and opportunities from sustainable development and how to identify them.

Do training programmes cover the full range of social, environmental and economic risks and opportunities?

What are the financial opportunities from enhanced training in sustainable development?

Identifying the most effective means of building sustainable development competencies – for different business functions and different levels of seniority.

Which learning approaches are most effective in diverse parts of the organization?

Source: WBCD, 2011

• In adopting a sustainable strategy, businesses contribute not only to the sustainability of the planet, but also, to their own sustainability as businesses.

• The key partnership role of HR in this context is embedding a culture of sustainability because, ultimately, the business performance is only as good as the decisions its people make.

Sustainable HR Advantage

• Companies can employ strategies to create better business through advancing – advancing diversity, – going green, – paying attention to employee well-being and – human rights issues, – educating employees about company sustainability

commitments and – encouraging employees to work in partnership with NGOs

and local communities .

Sustainable HR Advantage

All HR processes can be leveraged to create an inclusive culture where the entire workforce can contribute to greater innovation, improved customer relationships, reduced workplace conflict and enjoy higher motivation, productivity and workplace loyalty.

This means designing HR processes which actively seek out candidates from diverse backgrounds, proactively training managers to hire with an inclusive mindset, purposefully creating a workplace which respects the needs of different employees, especially minority groups, and sensitively promoting diversity in internal communications.

Advancing Diversity

As a company focused on innovation, Intel is committed to investing in their employees.

The unique skills, experiences, and backgrounds of employees allow them to contribute valuable new ideas and perspectives to the company’s everyday operations.

According to Intel, they create an inclusive environment where every employee feels valued.

For example, Intel works closely with their Black, Hispanic, and Women's Leadership Councils to facilitate employee engagement, development, and retention at the senior levels.

Advancing DiversityCase Study - Intel

Reducing environmental impacts is one of the most serious business challenges today and business can gain advantage only when the entire workforce is engaged.

HR support for the employee-driven Green Teams to enhance employee practices related to electricity usage, use of paper for printing, recycling, waste reduction and more delivers benefits of reduced operating costs, improved environmental protection, and employees who derive satisfaction from becoming ambassadors for a more sustainable planet.

Going Green

The US Postal Service says its “Lean Green Teams” reduced energy, water, solid waste to landfills and petroleum fuel use last year, saving the agency more than $5 million in 2010 alone.

These teams also helped recycle more than 222,000 tons of material — an increase of nearly 8,000 tons over the prior year — which generated $13 million in revenue, and saved an additional $9.1 million in landfill fees.

According to the Postal Service, these employee green teams are helping mesh low-cost and no-cost sustainable practices with performance management systems to help the agency meet its specific sustainability goals.

Going GreenCase Study – US Postal Services

HR policies which help employees to manage their own well-being deliver an ROI in reduced absenteeism, reduced health care costs, higher productivity and longer job tenure.

However, corporate health and wellbeing programs are often seen as warm and fuzzy HR initiatives, with no hard and fast business benefits.

While the outcomes of such programs are often positive anecdotally, examples of their financial worth do exist.

Employee Well-Being

Unilever developed a global health and wellbeing program that is hardwired into business outcomes.

The program, called Lamplighter, was initially created in 2001 following a request from senior company leaders to help them improve and manage their energy levels, to allow them to get the most out of their personal time and find ways to better manage their heavy workloads, according to Dean Patterson, global health and productivity manager for Unilever.

It proved such a success that Lamplighter went global in 2009 and is currently being implemented in 30 Unilever countries reaching 35,000 employees.

Employee Well-BeingCase Study – Unilever

There are over 200 million children illegally employed in businesses around the world, over 12 million people in forced labour and millions of employees who do not enjoy the basic right to freedom of association.

This would not happen if the HR voice was stronger - HR managers need to help identify the human rights risks in their supply chains and ensure robust HR policies to uphold human rights.

Creating a culture in which these issues can be openly addressed requires a new skill on the part of HR Managers.

Doing it well protects and advances the business, employees, and communities.

Human Rights

The Toshiba Group provides education on human rights to all employees.

The “Toshiba Group Standards of Conduct” stipulates adherence to all relevant laws and regulations, respect for fundamental human rights, and prohibition of discriminatory treatment, child labour and forced labour.

It requires that respect be accorded to diverse values, individuality, and privacy of individuals, prohibits discriminatory behaviour based on race, religion, gender, nationality, physical disability, age, or sexual orientation, and prohibits physical abuse, sexual harassment, abuse of power, and any other actions that disregard the dignity and individuality of others.

Human RightsCase Study – Toshiba

Educating Employees about Company Sustainability Commitments

It is important that companies inform and educate their employees about their sustainability commitments and goals.

Building awareness of the company’s sustainable development commitments and performance helps to keep employees committed to the company and its goals.

It may therefore assist in reducing high turnover and improving productivity.

Educating Employees about Company Sustainability Commitments

Case Study: Novo Nordisk’s TakeAction! Programme

The programme aims to integrate and embed a sustainable development mindset and culture in the organization.

It informs, supports and inspires employees to engage in voluntary work within Novo Nordisk’s therapy areas.

To many Novo Nordisk employees, this approach to sustainable development enhances their job satisfaction and supports their decision to remain with the company.

In the company’s annual survey, eVoice, employees are asked whether environmental and social issues are important for the future of the company - In 2004, the average response was 4.2 on a scale from 1-5, with 5 being the highest score.

Encouraging employees to work in Partnership with NGOs and Local Communities

Companies can create trust amongst community members and customers by allowing and encouraging their employees to become involved in social projects spearheaded by NGOs and local communities.

Many employees appreciate being given the opportunity to be involved in such projects and company loyalty may be influenced – this in turn may cut costs on high turn-over and may increase productivity.

Encouraging employees to work in partnership with NGOs and local communities

CASE STUDY: Severn Trent

Severn Trent is a provider of water, waste management and utility services which became involved with the Cromford Venture

Centre in the UK in 1995.

The Centre was founded upon the belief that young people respond positively to opportunities for self-development if they are

offered in surroundings that provide a stimulus for new experiences and activities.

Severn Trent saw that the Centre would be he ideal catalyst to help disadvantaged young people to improve their prospects.

The company decided to build strong leadership at the Centre, making an effort to understand its objectives and needs, and to involve Severn Trent employees as fully as possible at every opportunity.