Green Human Resource Management and Firm Performance: The Role of Green Innovation in Indonesian SMEs

Gde Bayu Surya Parwita; Made Ika Prastyadewi

doi:10.37641/jimkes.v14i3.5213

Authors

Gde Bayu Surya Parwita Universitas Mahasaraswati Denpasar, Indonesia
Made Ika Prastyadewi Universitas Mahasaraswati Denpasar, Indonesia

DOI:

https://doi.org/10.37641/jimkes.v14i3.5213

Keywords:

Green Human Resource Management, Green Innovation, Small and Medium-Sized Enterprises, Sustainable Performance

Abstract

SMEs play a crucial role in economic development but face challenges in integrating environmental sustainability into business operations. Green Human Resource Management (GHRM) has been proposed as a mechanism to foster green innovation and enhance sustainable performance. However, evidence from SMEs, particularly in emerging economies, remains limited and predominantly quantitative. This study investigates how GHRM contributes to multidimensional firm performance through green innovation in Indonesian SMEs. Using a qualitative multiple case study design, data were collected from 12 SMEs across manufacturing and service sectors via semi-structured interviews, non-participant observations, and document analysis. Thematic analysis identified four key patterns: emergent, values-based adoption of GHRM, selective deployment of core GHRM practices, green innovation as a linking mechanism between GHRM and performance, and capability and institutional barriers influencing outcomes. Findings indicate that informal, owner-driven GHRM fosters employee engagement in green process, product, and organizational innovations, generating environmental, operational, market, and social benefits. The study highlights the role of contextual factors such as regulatory enforcement and supply-chain pressures. Implications include guidance for SME managers on embedding environmental values in HR practices and for policymakers on designing integrated support programs to promote sustainable, innovation-driven SMEs.

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