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Best Environmental HRM Practices in The US: John Milliman and Judith Clair
Best Environmental HRM Practices in The US: John Milliman and Judith Clair
O
RGANISATIONS are experiencing increasing pressures for
environmentally-sensitive products and operations. Unfortunately,
many organisational efforts in this direction fail because human
resource management (HRM) practices are left unchanged during the
implementation of environmental programmes. To suggest a pathway to
overcome this flaw, this chapter describes the methods used by the most
progressive corporations in the US to develop environmental HRM
practices. First, the strategic context for environmental management is
described. Secondly, best environmental practices in training, performance
appraisal, and reward systems are discussed. Thirdly, suggestions for future
practice in each of these areas are offered.
■ Introduction
Many researchers agree that the planet faces a significant ecological crisis.
As a major source of this environmental damage, corporations are
increasingly pressured to develop ‘green’ practices by government regulators,
environmental activists, business competitors,1 and consumers.2 In develop-
ing green programmes, research suggests that a systems approach is crucial
to programme success. Put simply, all organisational systems must be
aligned to fulfil environmental goals. Thus, environmental programmes
often require significant internal and external organisational changes. These
changes include the alteration of core internal organisational systems, the
creation of ‘green’ operations and products,3 and the development of new
relationships with various environmental stakeholders.4
In line with this systems approach, a business organisation must also adjust
its human resource management (HRM) practices.5 Consultant E. Craig
50 Greening People
Strategic
Environmental Context
Environmental vision
specifies goals
Rewards
Incentive pay and Training
recognition provided for Provides the necessary
environmental environmental skills
performance.
Performance Appraisal
Measures employee
environmental
performance and provides
feedback
■ Environmental Training
■ Translating the Environmental Vision into Training Objectives
Once an environmental vision is developed, employees need to be
instructed on its implementation. Environmental education programmes
Best Environmental HRM Practices in the US 53
provide employees with the capabilities and information required for the
implementation of green programmes. Such an emphasis on training is
consistent with the fourth principle of the International Chamber of
Commerce (ICC) Business Charter for Sustainable Development which
states that organisations should ‘educate, train, and motivate employees to
conduct their activities in an environmentally responsible manner’.20
Consultants Judy Cook of Mac Technical Services Co. and Brenda Seith of
ERM Northwest take this principle further by expressing that ‘A training
programme can be the single most important element of a company’s
compliance strategy. By carefully identifying regulatory requirements,
company goals, and employees’ needs, the training assures that these can all
be satisfied.’21 Thus, training appears to be an absolutely critical component
in the success of environmental endeavours.22 Perhaps this is the reason why
US firms have instituted more environmental training programmes than
any other aspect of HRM.23
Once an organisation commits to environmental training, an environmental
training programme objective that is consistent with the organisation’s
environmental goals and strategy must be established.24 Polaroid provides a
good example of a clear environmental training objective that is related to
organisation’s vision for regulatory compliance. The company’s environ-
mental training goal is ‘the creation of an environment where every member
is provided with the proper knowledge and training to increase awareness
of environmental issues and to assure full compliance with the regulatory
requirement’.25
share their positive attitudes with other employees,45 and to provide more
ideas and suggestions.46
Effective communication tools and media are a key component of
environmental awareness programmes to ensure that employees understand
the importance of environmental issues. Such communication can take
many different forms; for example, Xerox educates its employees through
CEO communications, the company environmental, health and safety (EHS)
newsletter, employee environmental publications, company electronic mail
networks, employee forums, and videos.47 Duke Power also communicates
the importance of environmental issues via the organisation’s electronic
bulletin board, interdepartmental task force communications, the placement
of environmental questions on employee opinion surveys, and company
celebrations and other social events.48 Other organisations communicate the
importance of environmental issues in their annual reports and through the
delivery of training in naturalistic settings.49
I. Training
1. Translate company environmental vision into concrete environmental training
objective.
2. Conduct a systematic training needs analysis that specifies the skills to be
gained, who will be included in the training, and how the training will be
delivered.
3. Conduct training on three key areas: regulatory requirements, employee
awareness, and a programme for improving environmental processes and
systems, such as TQEM.
III. Rewards
1. Develop a reward system for environmental performance that includes
financial, recognition and non-traditional incentives to maximise the
motivation of a diverse workforce.
2. Ensure that a significant portion of an employee’s incentive package is based
on environmental performance.
3. Ensure that environmental rewards are highly visible and are offered on an
individual, team and company-wide basis.
managers can receive some credit in their performance appraisal even when
they have only partially accomplished a goal. Thirdly, the performance
appraisals take into account external factors (e.g. delays in permit
approvals) which are beyond the immediate control of managers, since
interaction with government agencies and regulators is frequently required.68
These latter two steps take much of the pressure off managers and thereby
decrease their need to distort appraisal systems.
In addition to accounting for external factors that influence a manager’s
environmental performance, another challenge of performance appraisals
involves how accurately and consistently to measure performance standards
across different units of the organisation. This is a particularly important
issue for multinational corporations (MNCs), because environmental
expectations and regulations vary extensively by country. For instance,
Amoco found itself in a dilemma in when it sought to ban personnel from
wearing beards in areas of the company that contain toxic gas. Holding
managers accountable for the implementation of this policy became a
problem in the company’s operating units in Muslim countries in the
Middle East where wearing beards is a cultural custom. Roy Hutson, Senior
Environmental Consultant at Amoco, recalled: ‘you suddenly find that you
have run headlong into a culture that holds beards to be part of its religion.
Now what do you do?’69
Amoco dealt with this issue by instituting new corporate-wide environ-
mental performance standards for on-site use policies, waste management
plans, environmental audits and waste reduction. Although Amoco’s
standards are customised to some degree to each country’s culture and
regulations, they are still considered to be proactive because a number of the
countries have little or no environmental requirements.70
■ Environmental Rewards
As shown in Figure 1, a final step in environmental HRM is the develop-
ment of reward programmes to provide further incentive for employees to
be ecologically proactive.88 To ensure that employees are rewarded on a
performance contingent basis, reward systems should be tightly linked to
the attainment of goals in performance appraisals. Bruce Gantner, Director
of Environmental Compliance at BFI, states: ‘Performance goals are the
critical foundation for any incentive plan.’89 To date, organisations have
primarily developed monetary-based and recognition-based rewards for
environmental performance.90 Research indicates that these rewards have
primarily been implemented for managers, rather than employees.91 Below
we discuss both types of rewards, along with some non-traditional rewards
that are being developed by a small number of innovative firms.
■ Summary
Organisations must systematically change a number of HRM practices to
implement effective environmental management initiatives successfully.
Although the majority of firms in the US still lag behind, a small but
increasing number of companies have implemented proactive environ-
mental HRM practices. US companies, probably due to in large part to legal
pressures, have to date developed the most extensive and sophisticated
HRM practices in regulatory training. Other major training efforts include
employee awareness of environmental issues and preparing employees to
implement TQEM.
In contrast to training, environmental practices in performance appraisals
and monetary rewards still appear to be relatively underdeveloped.
Nonetheless, some cutting-edge firms are including environmental criteria
as a key part of managers’ performance appraisals and are linking these
criteria to financial incentives. Further, a promising trend is that many
organisations have developed sophisticated recognition rewards for environ-
mental performance at individual, team and plant levels.
A critical first step in the success of these various HRM practices seems to
be for top management and key environmental professionals to translate the
organisational strategic environmental vision into more specific and
concrete objectives for environmental training. Secondly, these organisa-
tional objectives must also be translated into meaningful environmental
targets and standards for the various employees throughout the company
and included into these employees’ performance appraisals. Thirdly,
companies must recognise and financially reward employees based upon
their environmental performance.
Developing effective environmental training, performance appraisal and
reward systems is not an easy task; it takes considerable time, resources, and
the combined efforts of staff and managers systematically to develop each of
these areas. In addition, each HRM system must be carefully linked to each
other and aligned with the overall corporate vision as well as other
organisational systems, such as EMIS and environmental audits. An ideal
environmental management system clearly informs employees what their
Best Environmental HRM Practices in the US 69
■ Notes
1. See K. Dechant and B. Altman, ‘Environmental Leadership: From Compliance to
Competitive Advantage’, in Acad em y o f Managem ent Executive, Vol. 8 No. 3
(August 1994), pp. 7-27.
2. See J. Fiksel, ‘Quality Metrics in Design for Environment’, in To tal Quality
Enviro nm ental Managem ent, Vol. 3 No. 2 (Winter 1993/94), pp. 181-82.
3. See Dechant and Altman, o p . cit.; C.B. Hunt and E.R. Auster, ‘Proactive
Environmental Management: Avoiding the Toxic Trap’, in Slo an Managem ent
Review , Winter 1990, pp. 7-18.
4. See J.F. Milliman and J.A. Clair, ‘Total Quality Environmental Management
(TQEM): Implications for Research and Practice’, in Pro ceed ings o f the Internatio nal
Association of Business and Society Conference, Hilton Head, SC, March 1994, pp.
442-47.
5. See J. Cahan and M. Schweiger, ‘Product Life Cycle: The Key to Integrating EHS
into Corporate Decision Making and Operations’, in To tal Quality Enviro nm ental
Managem ent, Vol. 3 No. 2 (Winter, 1993/94), pp. 141-50.
6. E.C. McGee and A.K. Bhushan, ‘Applying the Baldridge Quantity Criteria to
Environmental Performance: Lessons from Leading Organisations’, in To tal Quality
Enviro nm ental Managem ent, Autumn 1993, p. 6.
7. See W.H. Parker, ‘Continuous Improvement at EG&G: The Waste Reduction Pays
(WARD) Initiative’, in To tal Quality Enviro nm ental Managem ent, Vol. 3 No. 4
(Summer 1994), pp. 421-31.
8. See R.S. Greenberg and C.A. Unger, ‘Environmental Management, Internal
Control, and TQEM’, in To tal Quality Enviro nm ental Managem ent, Vol. 5 No. 2
(Winter 1993/94), pp. 223-28.
9. See Milliman and Clair, o p . cit.
10. See C.A. Stevenson, ‘Training for Benchmarking: The Allied Signal Experience’,
in To tal Quality Enviro nm ental Managem ent, Summer 1993, pp. 397-403.
11. See Hunt and Auster, o p . cit.; R.P. Wells, P.A. O’Connell and S. Hochman, ‘What’s
the Difference between Reengineering and TQEM?’, in To tal Quality Enviro nm ental
Managem ent, Spring 1993, pp. 273-82.
12. See Hunt and Auster, o p . cit.
13. J.M. Hutterly, ‘Creating an Environmental Vision’, in Pro ceed ings o f the Glo bal
Enviro nm ental Managem ent Initiative Co nference, Arlington, VA, March 1993, p. 1.
14. See B.A. Gantner, ‘Evaluation of Facility Managers Using TQEM’, in Pro ceed ings
70 Greening People
o f the Glo bal Enviro nm ental Managem ent Initiative Co nference, Arlington, VA,
March 1992, pp. 149-56; W.R. Woodall, ‘Environmental Management System
Assessment’, in Pro ceed ings o f the Glo bal Enviro nm ental Managem ent Initiative
Co nference, Arlington, VA, March 1994, pp. 127-39.
15. See Hutterly, o p . cit.
16. See T.J. Dagon and J.W. Kleppe, ‘Product Stewardship in Photoprocessing’, in
Pro ceed ings o f the Glo bal Enviro nm ental Managem ent Initiative Co nference,
Arlington, VA, March 1994, pp. 17-22.
17. See Wells, O’Connell and Hochman, o p . cit.
18. See W.E. Stead, J.G. Stead, A.S. Wilcox and T.W. Zimmerer, ‘An Empirical
Investigation of Industrial Organizational Efforts to Institutionalize Environmental
Performance’ (Paper presented at the Internatio nal Asso ciatio n o f Business and
So ciety Co nference, Hilton Head, SC, 1994).
19. See Stead et al., o p . cit.
20. International Chamber of Commerce, The Business Charter for Sustainable
Development (Paris, France: ICC, 1991).
21. J. Cook and B.J. Seith, ‘Designing an Effective Environmental Training Program’,
in Jo urnal o f Enviro nm ental Regulatio n, Autumn 1992, p. 53.
22. See Cook and Seith, o p . cit.; B.M. Thomlinson, ‘Church & Dwight Does the
Environmentally Correct Thing’, in Fo o d Pro cessing, September 1993, pp. 33-37.
23. See Stead et al., o p . cit.
24. See Cook and Seith, o p . cit.
25. B. Schwalm, ‘Apply Total Quality and Strategic Planning Techniques for Improved
Compliance and Performance at Polaroid’, in To tal Quality Enviro nm e ntal
Management, Vol. 3 No. 2 (Winter 1993/94), p. 163.
26. See Cook and Seith, o p . cit.
27. See T. Worley, ‘Promoting Employee Environmental Awareness and Involvement’,
in Pro ceed ings o f the Glo bal Enviro nm ental Managem ent Initiative Co nference,
Arlington, VA, March 1994, pp. 141-45.
28. See ‘How Hyde Tools’ Quality-Oriented Culture Produces Pollution Prevention
Results’, in Business and the Enviro nm ent, Vol. 4 No. 8 (August 1993), pp. 5-6.
29. See Cook and Seith, o p . cit.
30. Ibid .
31. See Worley, o p . cit.
32. See Cook and Seith, o p . cit.
33. See B. Filipczak, ‘Toxic Training’, in Training, July 1992, pp. 53-56.
34. See A.C. Pierce, ‘Guidelines for Corporate Environmental Performance’, in
Jo urnal o f Enviro nm ental Regulatio n, Summer 1992, pp. 421-24.
35. See Filipczak, o p . cit.
36. Ibid .
37. See M.E. Marshall and D.W. Mayer, ‘Environmental Training: It’s Good Business’,
in Business Ho rizo ns, March/April 1992, pp. 54-57.
38. Parker, o p . cit., p. 422.
39. See Filipczak, o p . cit.
40. See Marshall and Mayer, o p . cit.
Best Environmental HRM Practices in the US 71
m ental Managem ent Initiative Co nference, Arlington, VA, March 1994, pp. 7-10.
74. See Schwalm, o p . cit.
75. See Fiksel, o p . cit.
76. Wolfe and Howes, o p . cit., p. 365.
77. See P.D. Coulter, ‘The Use of Union Carbide’s Audit Program as a Management
Tool’, in Pro ce e d ings o f th e Glo b al Enviro nm e ntal Manage m e nt Initiative
Co nference, Arlington, VA, March 1994, pp. 95-98.
78. See Carpenter, o p . cit.; Coulter, o p . cit.
79. See L.B. Cahill, ‘Evaluating Management Systems as Part of Environmental
Audits’, in To tal Quality Enviro nm ental Managem ent, Vol. 2 No. 2 (Winter 1992/93),
pp. 171-76; B.J. McGuinness, ‘Moving toward Management Systems Auditing:
DuPont’s Environmental Audit Programs’, in Pro ce e d ings o f th e Glo b al
Enviro nm ental Manage m ent Initiative Co nference, Arlington, VA, March 1994, pp.
113-19.
80. See Thomlison, o p . cit.
81. See Wells et al., o p . cit.
82. See McGuinness, o p . cit.
83. See Wolfe and Howes, o p . cit.
84. See J.F. Milliman, R.A. Zawacki, B. Schulz, S. Wiggins and C. Norman, ‘Customer
Services Drives 360-Degree Goal Setting’, in Perso nnel Jo urnal, June 1995.
85. See J.F. Milliman, R.Z. Zawacki, C. Norman, L.C. Powell and J. Kirksey,
‘Companies Evaluate Employees from All Perspectives’, in Perso nnel Jo urnal,
November 1994.
86. See Wells et al., o p . cit.
87. See S.P. Robbins, Organizatio nal Behavio ur: Co ncep ts, Co ntro versies and
Ap p licatio ns (6th edn; Englewood Cliffs, NJ: Prentice Hall, 1993).
88. See Wells et al., o p . cit.
89. Gantner, o p . cit., p. 150.
90. See Milliman and Clair, o p . cit.
91. See Stead et al., o p . cit.
92. See J.M. Cramer and T. Roes, ‘Total Employee Involvement: Measures for
Success’, in To tal Quality Enviro nm ental Managem ent, Vol. 3 No. 1 (Autumn 1993),
pp. 39-52.
93. ‘Pay for Environmental Performance’, in Environmental Manager, August 1994, p.
4.
94. J.D. Snyder, ‘More Execs Find Pay Linked to EHS Goals’, in Enviro nm ent To d ay,
October 1992, p. 22.
95. See Gantner, o p . cit.
96. See S. Woods, ‘Making Pollution Prevention Second Nature to your Nature’, in
Pro ceed ings o f the Glo bal Enviro nm ental Managem ent Initiative Co nference,
Arlington, VA, March 1993, pp. 51-56.
97. See ‘How Hyde Tools’ Quality-Oriented Culture...’, in o p . cit.; H. Whitenight,
‘Integrating Total Quality and Environmental Management: A Story of Applied
Learning’, in Pro ceed ings o f the Glo bal Enviro nm ental Managem ent Initiative
Co nference, Arlington, VA, March 1992, pp. 101-104.
Best Environmental HRM Practices in the US 73