Role of employee relations and HRM in driving commitment to sustainability in MSME firms

Abstract

PurposeThe purpose of this study is to explore the role of employee relations and human resource management (HRM) practices on firms' commitment to sustainability in the context of micro, small and medium enterprises (MSME) in India. This paper proposes a theoretical framework, namely “awareness, action, comprehensiveness, and excellence (AACE),” to present the solutions and practices as adopted by MSME firms in meeting their sustainability objectives alongside pluralistic constraints related to human resource, capital and legitimacy risk.Design/methodology/approachThe paper employs a cross-case methodology to investigate five food processing MSME firms to understand and delineate the role of employee relations and HRM practices in driving their commitment to sustainability.FindingsThe paper discusses the status of employee relations and HRM practices as practiced by MSME firms, specifically designed to meet their agenda to strengthen their commitment to sustainability. The study proposes a framework constituting four levels, namely “awareness, action, comprehensiveness, and excellence (AACE),” that reflects HRM practices as adopted by MSME firms to develop their commitment to sustainability.Social implicationsMSMEs and food processing industries are critical to the growth of Indian economy and likewise for other emerging and developing economies. They are especially critical for their contribution to overall employment and sustainability comprising the second, third and fourth supplier links in supply chains. They have a major impact on sustainability outcomes and the life quality of employees. This paper makes a contribution in this direction.Originality/valueThe study fulfills the need to explore the role of employee relations and HRM practices to develop “commitment to sustainability” in the context of food processing MSME firms in an emerging economy of India. This paper adds an understanding of people management practices and sustainability in small firms (MSMEs), adding to the existing literature on the domain, which is mostly skewed toward large firms.