Sustainable Workforce Development: The Role of Green HR Practice in Malaysian Hotels

Sustainable Workforce Development: The Role of Green HR Practice in Malaysian Hotels

Helmina Thomas*., Stephen Laison Sondoh Jr., Toh Pei Sung., Dean Nelson Mojolou

Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah

DOI: https://dx.doi.org/10.47772/IJRISS.2025.908000356

Received: 06 August 2025; Accepted: 12 August 2025; Published: 11 September 2025

ABSTRACT

Sustainable development emphasizes organizations acting in the interest of current and future stakeholders to ensure long-term survival. This approach has gained importance due to growing concerns over the environment, resources, and social sustainability. The rapid expansion of the hotel industry and the emergence of new hotels have led to intense competition without considering their environmental impact. Dealing with an unpredictable market, changing customer expectations, and business innovation forces them to be equivalent to their competitors. This study seeks to examine the relationship between green HR practices and business sustainability in the hotel industry. Data were collected from 150 sustainable hotels across Malaysia. The study employed SPSS 26.0 and SMART PLS version 3.0 to assess the study’s model. The analysis reveals that green HR practices are partially significant to business sustainability. Practically, the study offers insight for top management and employees to enhance the effectiveness of organizational management functions. Academically, the findings contribute to an evolving body of literature on business sustainability in the hotel industry and provide valuable information for the human resource function. Future research could expand the scope by incorporating other variables.

Keywords: Green HR Practices, Business Sustainability, Environmental Sustainability, Economic Sustainability, Social Sustainability.

INTRODUCTION

The hotel industry is a strong and dynamic sector contributing to the country’s economic growth. The industry is adapting to meet changing demand due to economic uncertainty and customer expectations. According to the Malaysian Department of Statistics, the current population in the first quarter of 2024 is 34 million, up from 33.2 million in 2023, reflecting a 2.3% increase (DOSM, 2024). Selangor remains Malaysia’s most populous state, with an estimated 7.2 million, followed by Johor 4.1 million and Sabah 3.9 million (Statista, 2023). As the population grows, it inevitably leads to increased human needs and desires, which can only be satisfied through progressive economic development. Additionally, the changing standard of living, driven by advanced technology, slightly impacts societal lifestyle. The government faces the challenge of fulfilling these demands, as each incremental growth requires capital investment, and rapid resource availability is necessary for a progressive economy (Nawawi et al., 2015). In the first quarter of 2024, the Gross Value-Added Tourism Industry (GVATI) contributed 12.8% (RM197.9) to the GDP, reflecting the sector’s continued significance. However, challenges, including the impact of the pandemic on foreign tourism, have led to a decline in GVATI, demonstrating the industry’s need for adaptability and recovery. Issues affecting the hotel industry in Malaysia include unsustainable operations, over-tourism, and neglect of sustainability (Khan & Hashim, 2020). Furthermore, negative reviews often highlight service quality, potentially impacting customer loyalty and future business (TripAdvisor, 2017). Other issues and challenges that need to be considered to stimulate green growth include limited resources, environmental concerns, pollution, climate change, and disaster risks. According to Yusoff et al. (2018), the hotel industry in Malaysia faces a lack of environmental knowledge among hotel managers. Therefore, implementing green HR practices could be a guiding factor in overcoming these obstacles and increasing productivity (Cheema & Javed, 2017).

Many hotel employees faced challenges, including forced unpaid leave, pay cuts, and dismissal. The pandemic has put social responsibility to the test, impacting businesses and individuals and creating environmental and economic uncertainties, highlighting the need for effective leadership in overcoming organizational challenges. On the other hand, human resources have played an essential role in businesses to remain sustainable. Leaders are the captains of a continual journey in the face of threats, identifying problems, designing solutions, creating action plans, executing plans, and conveying the strategies to employees (Zabaniotou, 2020). Amid the global situation, it is undeniable that organizations have shifted their focus away from sustainability toward process recovery. However, the situation also allows businesses to redesign operations focusing on economic, environmental, and social. The post Covid-19 period has compelled organizations to restructure their business models to prioritize greater sustainability (Kumar et al., 2020). Despite the challenges, organizations are urged to strengthen their workforce’s capabilities through training and coaching, fostering resilience as they adapt to digitalization in response to the global crisis. This necessitates re-evaluating business practices, learning from the current situation, and making sustainable changes for the future.

Problem Statement And Gaps

Following a review of previous research on business sustainability, it has been discovered that numerous studies in the field of sustainability have been conducted (Sharpley, 2000). However, most of these studies have focused mainly on the environmental aspects without considering the overall concept of sustainability (Khursiah et al., 2018; KamalulArifin et al., 2013). Instead, more research is needed on the environmental perspective in Malaysia, particularly from a human resource management viewpoint (Yi Yong et al., 2019). It is essential to understand the holistic impact of sustainability, taking into account the socio-cultural, environmental, and economic dimensions of sustainability (Hitchcock & Willard, 2009). Yung and Chan (2012) stated that the fundamental aspects of sustainability must be in harmony to achieve sustainability objectives. Rodrigo (2017) also agreed on the lack of organization management models that align the holistic concept of sustainability to address environmental issues and social, cultural, and policy dimensions. According to Hart and Dowell (2011), the purpose of sustainable development is restricted to environmental concerns and the economy and social sustainability. Therefore, considering the triple bottom line of sustainability, especially in the hotel industry, is essential to understand the holistic effect of sustainability itself. Furthermore, there has been limited research on business sustainability, mainly empirical and construct tests. Most of the research has been descriptive, and there has been a lack of focus on how sustainability management is integrated into the activities of organizations (Høgevold et al., 2015). Adding to this point, the prior study mainly focused on the needs of various green or environmental standards, with relatively few academics examining the micro aspects of how sustainability management is integrated into an organization’s activities (Khursiah et al., 2018). In Malaysia, according to Salehudin et al. (2013), most sustainability policies focus only on new and developing policies rather than mature accommodation facilities. Those evolved facilities, however, are the more significant contributors to the hotel industry. Furthermore, recent publications show a dearth of research on sustainability issues, particularly during the pandemic. Instead, most publications are devoted to public health, social and economic consequences (Barreiro-Gen et al., 2020). Employee involvement and effort are crucial for the continued growth of organizations. Singjai et al. (2018) indicate a lack of HR practice that encourages employee development and well-being to ensure preparedness to embrace changes and carry out sustainability tasks. According to Wikhamn (2019), management should increase the employees’ prosperity to keep employees competitive and committed to innovation. Thus, organizations should emphasize knowledge and employees’ skills related to sustainability so that employees are more readily available, knowledgeable, and capable of handling any innovation within the organization. Along with initiatives to promote innovation within the organization, education and training are vital to ensure the effective implementation changes (Azila & Scarlat, 2007). Therefore, this study fills the gap by proposing the four practices of green HR management. This study examines the relationship between green HR practices (green planning, green organizing, green leading, green controlling) and business sustainability in the Malaysian hotel industry.

LITERATURE REVIEW

Green HR Practices

Implementing green HR practices involves all employees, regardless of their functional area, in creating a sustainable work environment (Siyambalapitiya, 2018). Chams and Garcίa-Blandὀn (2019) define HR practices as the policy to balance environmental, social and economic, aligning with other organizational strategies and cultures that promote sustainability. There is growing research in the management field on green accounting, green marketing and green retailing, however, green HR practices are relatively diverse (Kim et al., 2019). According to Zaid et al. (2018), one key challenge of implementing green HR practices is the costs, which can be a significant barrier for an organization. However, incorporating these practices can ultimately lower employee training costs in the environmental management system (Siyambalapitiya et al., 2018). El-Kassar and Singh (2019) suggest that adopting green HR practices can improve organizational performance through employee engagement and commitment to the environment. Furthermore, the connections between sustainability and human resource management are still new and need more research (Ahmad, 2015). There is a clear link between HR practice and sustainability, encompassing employee well-being, corporate efficiency and innovation, and responsible resource consumption (Mousa & Othman, 2020; Chams & García-Blandón, 2019). Besides, developing countries have limited theoretical and empirical studies on green HR practices, most of which occur in Western culture, specifically in manufacturing organizations (Mousa & Othman, 2020). Moreover, few quantitative studies have been conducted in the context of green HR practices, and the sustainability concept’s engagement with green HR practices has been slow (Tang et al., 2018). In Malaysia, research on green HR practices in many companies remains limited, and there is still debate and uncertainty about which green HR practices are required to improve environmental performance (Yi Yong et al., 2019). In addition, human contributions to the service industry are frequently overlooked (Siyambalapitiya et al., 2018). Therefore, it is essential to understand the challenges and opportunities in this emerging research field.

Green Planning – Green HR practices view planning as setting targets and responsibilities for implementing environmental initiatives (Arulrajah et al., 2015). During the planning stage, it is vital to take precautions to minimize harm to the community, reduce environmental damage and cut project costs (Nawawi et al., 2015). This involves establishing a clear strategy for developing plans and coordinating organizational activities with environmental needs. Nonetheless, integrating planning and environmental behaviour development demonstrates slow reactions from the stakeholders (Azilah & Scarlat, 2007). The challenges of green HR planning include lacking a comprehensive plan and a clear definition of green value (Fayyazia et al., 2015). Furthermore, existing literature does not specify the practices falling under green planning (Arurajah et al., 2015). On the other hand, Khursiah et al. (2018) discovered that human resource planning is highly regarded in Malaysia’s hotel industry, emphasising career development programs, local labour supply monitoring, internal promotion, and strong relationships with local colleges as a source of external supply.

Green Organizing – In terms of green HR practices, organizing refers to an environmentally friendly job task during the job analysis and job design phases (Bombiak & Marciniuk-Kluska, 2018). Previous researchers have classified organizing in various ways. For example, green job design (Chams & Garcίa-Blandὀn, 2019), green recruitment (Yi Yong et al., 2019), and green selection (Tang et al., 2018). According to Siyambalapitiya et al. (2018), employees are organized according to their responsibilities, including requirements such as knowledge, abilities, and skills in green job design. Additionally, environmentally friendly HR practices can improve “employer branding” by attracting high-quality employees and overcoming challenges (Mousa & Othman, 2020). Thus, having a reputation as an environmentally friendly employer is a good way to attract talented employees for instance, job postings should highlight the applicant’s knowledge about the environment. There has not been much research on how the environmental management movement affects the criteria and procedures in the hiring process (Renwick et al., 2012). However, organizations are encouraged to make hiring policies in a way that attracts people who care for environmental long-term success. Khursiah et al. (2018) found that in the hotel industry, hiring was based on positive attitudes, communication skills, work experience, the ability to do the job, and promotion processes such as performance goals and quality. Other studies also found that the primary factor in making a job attractive was the environmental image, whereas pay was a stronger predictor of job pursuit intention (Renwick et al., 2013). This implies that both environmental image and compensation must align with job characteristics. Moreover, candidates prefer organizations with a strong commitment to the environment. This has led some employers to include “green job candidates” in their hiring strategies.

Green Leading – Dumont et al. (2016) stated that leading involves influencing sustainable behaviours, attitudes, motivation and knowledge related to environmental awareness. In green HR practices, organizations use green training to help organizations achieve their environmental goals (Pinzone et al., 2019). This includes raising employee awareness of the environment, equipping them with environmental management skills, and strengthening the organization’s environmental management expertise (Mousa & Othman, 2020). However, there is a lack of empirical research to assess the positive impact of leadership (Gardner et al., 2011). Hence, it is essential to broaden the scope of green leadership research by including managerial values, personality and other possible antecedents of green leadership (Renwick et al., 2013). Previous research has established the critical role of training as a necessary component of innovation practices (El-Kassar & Singh, 2019). Pinzone et al. (2019) confirmed green HR practices through green training to assist with environmental management. In line with managerial commitment, reward management also demonstrates the organization’s ability to achieve effective sustainability. Siyambalapitiya et al. (2018) added that green rewards will motivate and satisfy the workforce, contributing to a greener working environment. However, the literature rarely discusses the relationship between pay and environmental management (Renwick et al., 2012). Thus, other researchers recommend linking organizational practices and rewards with non-monetary incentives such as paid vacation, certificates and time off (Cheema & Javeed, 2017).

Green Controlling – Controlling involves setting environmental targets for all employees, developing green performance indicators, evaluating employees’ environmental outcomes and using disciplinary actions when necessary (Tang et al., 2018). The impact of managerial control varies based on the level of the organization’s formalization, financial focus, and spontaneity, influenced by the unique characteristics and management of the organization (Tang et al., 2018). Regrettably, there are challenges in receiving feedback and information, which affects the control system’s effectiveness. Therefore, Beuren and Teixeira (2014) suggest that an organization’s management control system and business strategy coexist harmoniously. Effective sustainability management requires using specific indicators and an information system for performance management (Cheema & Javed, 2017). Moreover, Mousa and Othman (2020) stated that enhancing environmental performance through green performance evaluation removes challenges for the manager, allowing them to carry out the execution. Another challenge arises from excluding employees from the assessment project, including evaluating environmental objectives. Renwick et al. (2013) proposed that evaluations with ecological objectives be extended to all employees, not just executives and division managers. In addition, negative feedback or punishment may help employees focus on their primary objectives (Cheema & Javed, 2017). However, using negative reinforcement in the performance evaluation system may not necessarily educate employees about best practices and could lead to self-protective behaviours (Renwick et al., 2012). Tang et al. (2018) suggest performance appraisal as a component of green performance evaluation in reward and compensation. Mousa and Othman (2020) agree that organizations should reward employees based on green environmental criteria to support environmental strategy. Therefore, adopting a green standard and indicator requires setting objectives and goals and converting them into an action plan for employees (Siyambalapitiya et al., 2018).

Business Sustainability

Sustainability has emerged as a core focus for organizations striving towards greening. The Triple Bottom Line (TBL) model articulates business sustainability through three related terms: economic sustainability, which emphasizes wealth development and cost-effectiveness; environmental sustainability, aimed at the conservation and resource management to preserve biodiversity and natural heritage, and minimize pollution; and social sustainability, which focuses on safeguarding human rights, fostering equal opportunities and preventing exploitation (Mihalič et al., 2015). Hogevold and Svensson (2015) identify sustainability as a transformational change, moving beyond current levels through innovation, performance improvement, and continuous evolution. A widely recognized definition from The Brundtland Report (1987) describes sustainability as the principle of “meeting current needs without jeopardizing future generations’ ability to meet their own”. The growing research on sustainability suggests that organizations should be responsible for their business goals and their impact on the environment and society (Wagner & Svensson, 2014). Nevertheless, there is limited research on sustainability practices from a managerial perspective, and only a few studies have explored the specific organizational performance outcomes associated with sustainability-oriented innovation (Mihalič et al., 2015).

Meanwhile, implementing sustainable environmental management requires a significant initial investment but leads to long-term cost savings (Nurul Awatif et al., 2016). Environmental management is a strategic approach used by an organization to monitor its operational impact on the natural environment. Environmental issues are seen as a managerial challenge requiring the reinforcement of environmental standards and certifications to promote environmental sustainability (Mousa and Othman, 2020; Darnall et al., 2008). This can increase customer trust and improve the hotel’s financial and environmental performance. Nevertheless, sustaining a long-term environmental culture within an organization poses challenges, such as maintaining employee commitment to environmental initiatives. Success in this area relies heavily on the workforce’s readiness to integrate new practices (Pinzone et al., 2019). Employees, for example, often drive organizational change towards environmental consciousness, given that implementing environmental practices augmented their knowledge and awareness (Pham et al., 2019). For optimal effectiveness, the environmental management system should align with the organization’s operating procedures to sustain environmental efforts (Siyambalapitiya et al., 2018). Despite these insights, some sectors, like the hotel industry, still view environmental sustainability as a costly and non-critical concern, overlooking the significant role of the public sector in committing to environmental preservation (Mihalič et al., 2015; Mousa and Othman, 2020). Therefore, several HR factors are needed to enhance environmental sustainability (Siyambalapitiya et al., 2018). On the other hand, social issues are complex and challenging to identify because they depend on the diverse resources, values, and preferences unique to different individuals (Shi et al., 2012). It encompasses human interaction and relationships, behavioural patterns, and values among people, requiring a deep commitment across the organization (Roberts and Tribe, 2008). Such responsibility may affect employees accountable for achieving environmental goals (Pinzone et al., 2019). In the hotel industry context, addressing social issues such as employment and employee welfare and preserving local culture can strengthen the industry’s role (Azilah & Scarlat, 2007). While prior studies in Malaysia have mainly focused on environmental management practices, the relevance of social involvement in achieving environmental objectives remains significant (Zaiton et al., 2016; KamalulArifin et al., 2013). Additionally, there are guidelines to assist organizations in managing social issues, but no single dominant standard exists (Shi et al., 2012).

The Linkage between Green HR Practices and Business Sustainability

According to Renwick et al. (2013), integrating environmental values into HR practices has significantly enhanced organizational performance. Zaid et al. (2018) assert that green HR Practices, including green hiring, green training, green compensation and green performance management, are instrumental in driving positive organizational outcomes. Similarly, Gilal et al. (2019) emphasized the substantial positive impact of green HR practices on environmental performance, largely stemming from transformations in employee behaviours and attitudes. Kim et al. (2019) discovered a significant effect of Green HR practices on employees’ eco-friendly behaviour and commitment to non-green hotels. Zeenat and Mariam (2014) highlighted the deficiency in government support and enforcement of green management practices in the Malaysian hotel industry. In contrast, Tynan and McKechnie (2009) provide evidence of customers’ willingness to pay a premium for environmentally friendly service, even when staying at green hotels. Manaktola and Jauhari (2007) reinforced the notion that customers feel gratified by contributing to the environment when they choose environmentally friendly hotels. This underscores the criticality of infusing environmental values and behaviours into the organizational culture to cultivate green workplace behaviour. Moreover, Zaid et al. (2018) promoted strategies such as employee empowerment and environmental training as drivers of sustainability commitment. They believe that proactive green measures, including environmental training practices, can measurably mitigate resistance to change necessary for achieving sustainability. In line with this, Paillé et al. (2020) unveiled the significant indirect effect of green training and performance management on environmental performance by enhancing organizational support. Therefore, integrating green initiatives within HR processes holds the potential advancement towards overall sustainability development, as Tang et al. (2018) suggested. Additionally, Mousa and Othman (2020) highlight the pivotal role of green HR management in an organization’s commitment to social responsibility. Cheema and Javed (2017) proposed more managerial engagement in green practices through heightened HR involvement to meet sustainability objectives.

Figure 1: Conceptual Framework

METHODOLOGY

Sampling Techniques

A researcher conducted a quantitative research design, which is a purposive sampling technique to gather information regarding green HR practices and business sustainability in Malaysia’s hotel industry. The focus was on hotels of all ratings, from one to five stars. The study identified three types of hotels: a hotel that is awarded and certified as a green hotel, a hotel without a certificate but committed to being green, and a non-green hotel. The study examines green-certified hotels and hotels without a certificate but going green. The data analysis focuses on the organization level, where the respondents are top management executives, comprising a manager, assistant manager, general manager, and assistant general manager. G-Power software was used to determine the minimum sample size (Cunningham & McCrum-Gardner, 2007). The sample size was calculated using an effect size of 0.15, with a significance level of 0.05 and a power value of 0.95. The total sample size is 150 respondents. A self-administered questionnaire in English and Malay was distributed to the hotels throughout Malaysia. The questionnaire comprised 44 items on a five-point Likert scale, from Strongly Disagree (1) to Strongly Agree (5), to measure green HR practices and business sustainability. Section A included the screening question, such as the types of hotels (awarded or certified green hotel or non-green hotel but going green) and commitment to sustainability. Section B measured the green HR practices, which were adopted from Arulrajah et al. (2015), Bombiak and Marciniuk-Kluska (2018), Dumont et al. (2016), and Tang et al. (2018). Section C measured business sustainability and was adopted from Roberts and Tribe (2008) and Høgevold et al. (2015). Section D is the participants’ demographics, such as gender, age, working experience, education level and years of service. Prior to conducting the research, authorization was obtained from the respective hotels to collect the necessary data. The data from the Ministry of Tourism, Arts, and Culture Malaysia indicates the presence of 610 rated hotels ranging from one to five stars (MOTAC, 2020).

DATA ANALYSIS AND RESULT

Data Analysis

The researchers employed Statistical Package for Social Science (SPSS) version 26 to analyze the descriptive and primary data collection. Then, partial least squares structural equation modelling (PLS-SEM) version 3.3.3 was used to test the study’s hypotheses. To examine the construct validity, the researchers computed the average variance extracted (AVE), composite reliability (CR), and Cronbach’s alpha coefficients.

Assessment of Reflective Measures (First-Order Construct)

When evaluating reflective measurement models, it is essential to assess both Cronbach Alpha and Composite Reliability to determine Internal Consistency Reliability, Individual Indicator Reliability (Outer Loadings), and Average Variance Extracted (AVE) to evaluate Convergent Validity. Additionally, Discriminant Validity is considered when evaluating reflective measurement models. The Fornell-Larcker criterion, Cross-Loadings and, most notably, the Heterotrait-Monotrait (HTMT) correlation ratio can be used to assess discriminant validity. Based on Table 1, the values for Cronbach alpha ranged from 0.862 to 0.935, meeting the threshold of 0.7 recommended by Hair et al. (2010). The composite reliability results for all constructs exceeded the minimum value of 0.7, ranging from 0.868 to 0.938. These results indicate that the measurement model has adequate reliability. Meanwhile, all the outer loading indicator values have met the requirement for indicator reliability, with indicator values ranging from 0.555 to 0.906, as recommended by Byrne (2016). Additionally, the results for convergent validity indicated that the AVE values for all the constructs are greater than 0.5, ranging from 0.608 to 0.737. Therefore, the results conclude that the measurement model has acceptable convergent validity.

Table 1: Results Summary for Reflective Models (First-Order Construct)

Assessment of Formative Measures (Second-Order Construct)

This study modelled business sustainability – economy, environment, social- as formative measures. The researchers followed Becker et al. (2012) approach to create reflective-formative second-order constructs in PLS using a type II hierarchical latent variable model. First, we assess the quality of the reflective measurement model’s first-order constructs (see Table 1). Then, we obtained the latent scores for these constructs using the PLS algorithm results. In the second stage, we use the latent scores of the first-order constructs (economy, environment and social) as indicators for the second-order constructs. Since the second-order constructs were modelled as formative measures, we evaluated and reported the quality of the formative indicators at the higher-order level, as per Becker et al. (2012). First, VIF values should be checked for collinearity issues. According to Hair et al. (2011), VIF 5 or higher and VIF values 3.3 or higher (Diamantopoulos & Siguaw, 2006) indicate potential collinearity issues. Second, the significance and relevance of the outer weights for each formative indicator will be examined by looking at bootstrapping results (t-values for each indicator weight). For t-values above 1.96 indicate a significance level of p<0.05, and t-values greater than 2.57 indicate a significance level of p<0.01 for a two-tailed test. The formative measurement model is considered appropriate if all the formative indicator’s outer weights are significant and there are no collinearity issues (Hair et al., 2017). However, non-significant indicator weights should not automatically be regarded as poor measurement quality. Instead, researchers should consider the absolute contribution of each formative indicator to its construct. Suppose an indicator’s outer weight is insignificant, but its outer loading is high (above 0.50). In that case, the indicator is absolutely important, though not relatively important, and is usually retained in the model. On the other hand, if an indicator has a non-significant weight and the outer loading is below 0.50, the decision to keep or remove the indicator should depend on its theoretical relevance and potential redundancy with other indicators of the same construct (Ramayah et al., 2018). Table 2 presents the assessment results of the formative measurement for the second-order constructs. The findings showed that the outer weight indicators for environment and social aspects were significant, but the economic aspect was not as strong. The VIF values for each formative indicator were below 5, suggesting no multicollinearity issue. In addition, all outer loading indicators were significant and above 0.5 at p<0.01 significance level. We concluded that our combined model for measuring business sustainability was satisfactory.

Table 2: Measurement Model for Formative Second-Order Construct

Discriminant Validity (Heterotrait Monotrait ratio of Correlation – HTMT)

According to Gold et al. (2001), all HTMT values for the construct should be below the threshold value of 0.9. As shown in Table 3, all HTMT values are below the threshold of 0.90, and the square root of Average Variance Extracted (AVE) is higher than the relationships between the indicators. This confirmed the divergent validity of the measurement model.

Table 3: Discriminant Validity (HTMT)

Figure 2: Measurement Model

Assessment of the Structural Model

The structural model determines the predictive relevancy and the relationships between constructs. These included collinearity issues, the significance of the structural model relationships, coefficient of determination (R²), effect size (f²), predictive relevance (Q²), and PLSpredict. As shown in Table 4, VIF values are between 2.626 and 3.891, less than 5 (Hair et al., 2011), suggesting that collinearity was not an issue in this analysis. Then, the researchers tested the strength of the relationship using bootstrapping at a 0.05 significant level, a one-tailed test, and 5000 subsamples to test the path coefficients’ significance. For hypotheses (H1, H2, and H4), it is anticipated that there is a positive relationship between green HR practices (green planning, green organizing, green controlling) and business sustainability. The result shows that green HR practices (green planning) were positively related to business sustainability (β=0.192, t-value=1.820, p<0.01), with a 95% bootstrapped CI [0.020, 0.368] and a small effect size (f² = 0.028), green HR practice (green organizing) (β=0.269, t-value=2.857, p<0.01), with a 95% CI [0.114, 0.421] and a small to medium effect size (f² = 0.068),  and green HR practice (green controlling) (β=0.370, t-value=3.720, p<0.01), with a 95% CI [0.208, 0.538] and a medium effect size (f² = 0.155). Therefore, H1, H2, and H4 are supported. However, green HR practices (green leading) did not have a significant impact on business sustainability (β=0.067, t-value=0.749, p>0.05), with a 95% CI [-0.092, 0.204] and a negligible effect size (f² = 0.004). Thus, H3 is rejected. The R² value was 0.663, indicating 66.3% of the variance in business sustainability was explained by the green HR practices in the model – a substantial level of predictive accuracy (Hair et al., 2017).

Table 4: Hypothesis Testing

The Q² value is used to determine the predictive relevance of a model. The predictive relevance Q² values for economy, environment and social are 0.299, 0.554 and 0.534, respectively, demonstrating that the model has predictive relevance, as the Q² values are greater than zero (Hair et al., 2018). Moreover, PLSpredict results further confirmed strong predictive power, as all indicators (economy, environment, social) had lower RMSE values compared to the LM benchmark (Shmueli et al., 2019). Hence, it can be concluded that the model in this study has strong predictive power.

Table 5: Assessment of the PLS-predict

DISCUSSION AND CONCLUSION

Discussion of Results

The study examined the influence of Green HR practices on business sustainability in the Malaysian hotel industry in a bid to provide a better understanding of how these practices can improve sustainability. Since some of the hotels in Malaysia are green or toward green hotels, they need to manage their HR aspects well. The overall result showed that the link between green leading and business sustainability was not supported. However, the connection between green planning, green organizing, and green controlling with business sustainability was supported. This demonstrates that green HR practice influences business sustainability. Renwick et al. (2013) stated that green HR practice enhances performance by integrating environmental values into an organization. This highlights the significance of green HR practices in achieving business sustainability.

The first aspect of green HR practices is green planning. The result suggests a relationship exists between the green HR practice dimension of planning and business sustainability. Green HR planning practices involve setting out targets, goals, and responsibilities to implement the environmental initiatives and decide the organizational strategies to meet the environmental demand. It also entails providing opportunities for employees to participate in environmental management by setting environmental targets and goals to develop a business plan, ultimately ensuring long-term profitability. Implementing green HR practices in planning requires high commitment and motivation from top management. Strong support from top management plays a crucial role in enhancing sustainability efforts. Siyambalapitiya et al. (2018) emphasized that appropriately planning and hiring the right number of employees through recruitment are critical for promoting environmentally friendly and sustainable employment practices. Sustainability is the business practice that maximizes the organisation’s efficient use of available resources. Shi et al. (2012) highlight that continuous improvement of organizational management and the systematic design of management processes help reduce waste and protect the environment. In addition, Zaid et al. (2018) found a positive impact of green HR practice bundles on sustainability through green selection. Hence, green HR planning significantly influences business sustainability in the hotel industry in Malaysia. Meanwhile, green organizing includes tasks related to environmental protection in the job description that can encourage sustainability in the workplace. Structuring a job role with sustainability in mind and choosing candidates with environmental knowledge can significantly contribute to a company’s sustainability efforts. Besides that, focusing on the environment and effective monitoring are essential for achieving sustainability. This is supported by Kim et al. (2019), indicating that green HR practices positively influence employees’ eco-friendly behaviour and commitment to non-green hotels. Therefore, this highlights the strong connection between an organization’s green HR practices of organizing and sustainability in the Malaysian hotel industry.

Moreover, green HR practices of leading also drive the organization’s sustainability. Green leading involves employees’ green training, environmental knowledge and skills, and motivation. Unfortunately, studies have not found a direct relationship between green leading and business sustainability. Organizations may struggle to create long-term sustainability plans due to a lack of commitment and motivation at higher management levels, even if the organization offers opportunities for employees to participate in environmental management. One of the main obstacles is a lack of general understanding about managing sustainability, as many employees are not adequately educated on the importance of such practices, leading them to view sustainability as non-essential to the organization’s growth. The failure is also attributed to insufficient environmental training, contributing to employees lacking the necessary knowledge and skills. It is suggested that boosting rewards and motivation, alongside improving cooperation among top management, could be the remedy. Moreover, it is crucial to include environmental considerations in performance evaluations and give employees chances to contribute to environmental protection efforts. The finding goes against the study by Gilal et al. (2019), which suggests that green HR practices positively impact environmental performance mainly due to changes in employee behaviour. Therefore, the leadership aspect of green HR does not directly support sustainability in Malaysia’s hotel industry. Lastly, the green controlling aspect of green HR practice contributes to business sustainability by incorporating green performance indicators in performance evaluations. Organizations should start by establishing green targets, goals, and management responsibilities to promote sustainability. Managers play a vital role in implementing sustainability efforts, requiring a good understanding of effectively controlling green HR practices. Besides, managers should include sustainability objectives in performance appraisals to work towards successful business sustainability. Zaid et al. (2018) have emphasized that green HR practices, including green hiring, training, compensation, and performance management, can be implemented through the controlling function of green HR. Therefore, green HR controlling practices are directly linked to achieving sustainability in Malaysia’s hotel industry.

The Implication of the Study

There is still limited research on how green HR practices are connected to business sustainability, despite the growing literature on other green-based management fields like green accounting and green marketing. Green HR practices are relatively new and need more research (Kim et al., 2019). This study helps to fill that gap by demonstrating the importance of green HR practices in enhancing a hotel’s environmental efforts. Previous research mainly focused on Western studies and did not include respondents from the hotel industry. Instead, earlier studies have drawn from various industries (i.e. manufacturing, construction, healthcare and retail companies) (Renwick et al., 2013; Mousa & Othman, 2020). In Asian countries, including Malaysia, there is a noticeable scarcity of theoretical and empirical studies on green HR practices, a lack of quantitative studies, and limited engagement of sustainability concepts with green HR practices (Tang, 2018). Malaysia has less emphasis on how green HR practices can influence a hotel’s sustainability (Yusoff et al., 2018). Therefore, the findings of this study provide valuable insights, especially for academics and future researchers, by expanding the available literature within the Malaysian context. The significant relationships demonstrate that green HR practices are crucial in the early stages of greening an organization. This is particularly relevant given that the respondents in this study were managerial level from various departments, each playing a vital role in the planning and implementation of environmental programs in hotels. For policymakers, the findings support adding the green HR criteria in hotel certification schemes, developing targeted training and capacity-building programs for hotel managers, and offering incentives or tax rebates for hotels adopting HR driven sustainability initiatives. Additionally, the industry can benefit from practical toolkits developed from these findings. Such resources could outline step-by step guidelines, performance indicators, and best practices for integrating green HR practices. By offering hotels a structured approach to adopting green HR practices, these toolkits can facilitate consistent and measurable progress toward sustainability goals. By aligning these findings to national policies, this study provides practical guidance for government agencies, hotel associations, and industry leaders to support Malaysia’s progress toward becoming sustainable tourism destination.

Limitations and Recommendations for Future Studies

Each service industry has its own environmental protection regulations and management style. Hotel industry market segments differ from other service sector industries. It is highly recommended that the study should be expanded further. Since the study focuses on hotel industry employers and examines organizational sustainability efforts, it is best to broaden the scope. Thus, future research should explore other service sectors in Malaysia, such as transportation, travel agencies, food and beverage, banking, and retail. Limitations from the unit of analysis are also obtained. The data was collected from a single informant in each hotel (i.e. top management, middle management, and person in charge of the sustainability policies). Although the single informant could provide accurate information to the study, it could neglect the experience of lower-level personnel responsible for running the practices and representing the hotel’s sustainability image. Thus, the study suggests including input from a range of employees. Additionally, using a mixed method is also advised to be included. Future researchers may find additional green HR strategies that promote organization sustainability. Moreover, comparing environmental practices among hotels with different star ratings or ownership structures is also valuable. Finally, the moderator or mediator variables should be examined by considering the perspective of the organization and the customer for a more comprehensive understanding. Incorporating the customer’s viewpoint can show how green HR efforts affect guest satisfaction, loyalty, and the hotel’s brand image. This could help connect internal sustainability practices with external market outcomes.

Conclusion

The study aims to examine green HR practices and business sustainability in the Malaysian hotel industry, ranging from one to five stars. It focuses on the four main functions of HR management in the aspect of green – planning, organizing, leading and controlling – in relation to business sustainability. The research extends previous studies on green HR practices to the Asian and Malaysian context and provides a foundation for future research. Consequently, four hypotheses were made to describe the causal relationship of all constructs. The purposive sampling method has been used for the methodology part. The data were collected from 150 hotels in Malaysia. In the context of hotels in Malaysia, the study revealed that green planning, green organizing and green controlling are important for promoting business sustainability, while green leadership does not significantly impact business sustainability. In particular, the significance of each relationship inferred in the hypothesis offers valuable insights for academics and practitioners.

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