Exploring Sustainable HRM Through the Lens of Employee Wellbeing

Abstract

People are considered the most valuable resources in the workplace. They bring their unique knowledge, skills, and abilities (KSAs) to contribute to the organization’s success. A sustainable workplace puts people first by prioritizing policies and practices to support employees’ physical, mental, and emotional health and promote work–life balance, which ultimately lead to increased job satisfaction and overall wellbeing. Wellbeing and positive functioning are considered essential elements for developing sustainable work performance. Organizations ought to develop sustainable management processes and practices as well as sustainable leadership to minimize the negative effects of the workplace on employee wellbeing and to foster a sustainable culture. This study aims to explore how a sustainable HRM would promote and enhance employee wellbeing in the workplace by investigating and developing a theoretical framework to connect the conceptual list of sustainable HR policies and practices with the five elements of the PERMA model of employee wellbeing.

1. Introduction

Sustainability has gained more attention in the recent literature since the United Nations officially adopted the term “sustainability” in 1987, which is defined as “meeting the needs of the present without compromising the ability of future generations to meet their own needs” [1]. In 2015, the United Nations adopted the 2030 agenda for sustainable development and developed 17 Sustainable Development Goals (SDGs), among which “good health and well-being” is listed as the #3 goal [2]. Researchers further indicate forming a workplace that supports employee mental health and wellbeing is considered an ultimate challenge in sustaining a long-term competitive advantage for organizations [3]. In 2020, the COVID-19 pandemic brought employee mental health and wellbeing at work to a new level of importance; thus, nurturing a healthy and sustainable workplace is critical during and post pandemic [4].

In a recent study, Cinar and Bilodeau [5] proposed a proactive five-stage model to address workplace mental health and wellbeing and to implement SDG3 in line with an organization’s business goals. They discussed the importance of mental health and wellbeing in the process of sustainable development and reinforced the critical role of mental health in achieving sustainable business outcomes, particularly in the post-pandemic landscape. A recent bibliographic review conducted by Garcia [6] also emphasized that the implementation of sustainable practices positively impacts SDG3. Based on a review of recently published articles, Garcia [6] highlighted several major factors including fairness perception [7], nature exposure [8], and favoritism [9] that impact mental health and wellbeing in the workplace, as well as the development of a sustainable workplace. The study revealed that mental health care is not only an ethical responsibility but also a smart business strategy and one of the most influential factors in enhancing employee productivity and engagement in the workplace. As a result, sustainable HR practices, mental health initiatives, and fair workplace environments are all integral to improving employee wellbeing. Sustainable organizations ought to set their priority to protect the safety and health of their most vital resources (human resources) and embrace the mindset of promoting their employees’ wellbeing. Therefore, human resource sustainability has become crucial to address employee health and wellbeing in achieving social sustainability outcomes.

Research progress in the field of HRM has been widely acknowledged in the past few decades, in which HRM theory and research have been devoted largely to the benefit of organizations in terms of improving performance [10]. Strategic HRM has been the focus of organizations to achieve organizational outcomes [11]. Correspondingly, high-performance work systems (HPWSs) have been developed and implemented, which are designed to promote employees’ skills, motivation and involvement for organizations to gain a sustainable competitive advantage [12]. HPWSs identify the best bundles of HR practices to build a highly skilled and committed workforce [13], such as selective employment, competitive compensation, comprehensive training and development, and employee empowerment [12,14,15,16]. Researchers argue that organizations pursue their sustainable organizational performance at the expense of a concern for employee wellbeing [10] and often ignore the dark side of the HPWSs, i.e., negative effects on employee health and wellbeing [17,18]. With the development of HPWSs toward this new direction, some researchers adopted the synthesis approach to explain the effects of HPWSs; i.e., the positive and negative effects of HPWSs are not mutually exclusive but mutually reinforcing. Organizations can improve organizational performance through HPWSs, at the same time as reducing the harm of HPWSs on employee wellbeing [19]. Based on social exchange theory and the norm of reciprocity, researchers further argue that HPWSs can increase employee wellbeing since the investments in HPWSs signal to employees that organizations care about their wellbeing; therefore, employees respond to these signals with positive attitudes and behaviors [20,21,22].

In the past few decades, the workplace has experienced dramatic changes in the nature and context due to technology and the COVID-19 pandemic. The work modality has shifted to remote and hybrid settings, which made employee wellbeing a priority for most organizations. As a result, different approaches to HRM have been proposed and tested such as wellbeing-oriented HRM [10,23,24] and human-centered approaches toward sustainable workforces [25,26] compared with the previous performance-dominated HPWSs. As one of the new approaches, sustainable HRM has drawn growing attention in the HRM literature. In a recent study, Herlina and Iskandar [27] explored the interrelationship of sustainable HRM, Artificial Intelligence (AI), and employee wellbeing on motivating employee engagement. They found significant positive associations between the sustainable HR practices and employee engagement, along with employee wellbeing, which made it relevant for embedding sustainability into the framework of HRM. Their findings provided significant theoretical implications by challenging the traditional HRM models that have primarily focused on performance management and may have overlooked environmental and social factors. Their results indicated that sustainability is a core component of HRM theory, and sustainable HR practices, which emphasize long-term employee wellbeing and social responsibility, are essential for fostering engagement. This study made significant contributions to the advancement of the literature on sustainable HRM and proved the need to adopt sustainable HRM practices with the focus on employee wellbeing. In organizations, employees are considered the most valuable resources. Therefore, HRM plays a vital role in achieving sustainability. The current study intends to investigate how to improve employee wellbeing in organizations through sustainable HRM. In the following sections, sustainable HRM, employee wellbeing, and the PERMA model of wellbeing will be reviewed and defined, based on which the theoretical framework will be developed to connect the conceptual list of various sustainable HR policies and practices with the PERMA model of employee wellbeing.

2. Literature Review

2.1. Sustainable HRM

The term sustainable HRM was created and labeled to represent the attempt to apply a people-oriented perspective to the development of HRM policies and practices in order to enhance organizational performance, which has become a priority to support, develop, and enhance people at work [28]. The theoretical concept of sustainable HRM has been developed from different angles such as a focus on social responsibilities [11,29], long term orientation [11,13,30], employee centered [31], etc., which made the literature on sustainable HRM fragmented and diverse. In the recent literature, researchers have conducted systematic reviews on the concept of sustainable HRM and classified sustainable HRM in the following four different categories: socially responsible HRM, green HRM, triple-bottom-line HRM, and common good HRM [32,33,34]. In the most recent bibliometric analysis of sustainable HRM, Faisal [34] summarized these four types of sustainable HRM, as below.

• Socially responsible HRM refers to a socially responsible approach to HRM, which includes corporate social responsibility-related personnel policies.
• Green HRM focuses on environmentally conscious HR strategies, including hiring environmentally conscious staff, providing green training, evaluating performance against the organization’s green standards, and providing a green reward system for achieving green goals.
• Triple-bottom-line HRM seeks to accomplish the environmental, social, and economic goals simultaneously to attain sustainability by minimizing the adverse environmental effects caused by an organization’s operations.
• Common good HRM intends to use HRM policies and practices to help all employees. Such policies and practices involve the participation of employees in decision making, proper grievance handling, job security, and providing help to employees in cases of need.

Although sustainable HRM has been defined in many different ways, the same notion has been shared in the literature; i.e., sustainable HRM attempts to apply a people-centered approach to develop HR policies and practices in order to enhance long-term organizational outcomes, including human and social, not merely financial outcomes. The key principles of sustainable HRM include long-term-oriented HRM approaches; development of employee skills, knowledge, and their potential; development of good employee–employer relationships; and emphasis on employee care through maintaining and supporting their health and wellbeing [28,35]. Based on a comprehensive review and discussion of sustainable HRM, Aust et al. [33] highlights the need to shift the focus of sustainable HRM to the common good approach, which embeds common good values within all areas of HR policies, structure, and procedures in order to solve one of the grand challenges or SDGs. The intent of the current study is to explore the HR policies and practices that are effective in making HRM systems more sustainable and more capable of contributing to SDGs, which is in line with the common good HRM. Specifically, this study will focus on the United Nations’ SDG #3 “good health and well-being” and connect the sustainable HRM with promoting and enhancing employee wellbeing at workplace.

2.2. Employee Wellbeing

Wellbeing has been viewed as a multidimensional concept. It describes a dynamic state that changes over time [36]. Wellbeing can be measured both objectively and subjectively. The objective measure of wellbeing is assessed by the third party of a person’s state of wellbeing [37]. The subjective measure of wellbeing is considered especially important as it is related to personal feelings [38]. There are two different approaches in the literature to explain subjective wellbeing. The hedonic approach considers the maximization of pleasure and making life more pleasant as the primary factor of wellbeing, where increased pleasure and decreased pain lead to momentary happiness [39,40]. On the other hand, the eudemonic approach emphasizes the state of long-lasting happiness, which consists of meaning, life purpose, self-acceptance, self-actualization, autonomy, personal growth, social contribution, sense of belonging, competence, and personal expressiveness [40,41,42,43,44]. In comparison with the hedonic approach, the eudemonic approach suggests that a person lives a flourishing life through experiencing good health, overcoming challenges, engaging with enriching activities and relationships, and achieving something great for oneself and for the greater purpose of others [44].

Employee wellbeing in the workplace has been given more attention in the past few decades and has been viewed as a state in which an employee “realizes his or her own abilities, can cope with the normal stresses of life, can work productively and fruitfully, and can contribute to his or her community” ([45], p. 2). Companies investing in the wellbeing of their workforce have recognized that employee wellbeing is an important factor in determining organizational success [46,47,48]. Employee wellbeing can be affected by job-related factors, such as pay, colleagues, supervisors, working conditions, job security, training opportunities, involvement, team working and the nature of the work undertaken [46]. Although various approaches to employee wellbeing exist in the literature, all share the same notion: to help people fit in and function well at work [49]. Employee wellbeing has been proved to correlate with various organizational success indicators, including efficiency, employee turnover, employee engagement, work performance, workplace satisfaction, workvplace loyalty, depression, and work–life balance [50,51,52,53,54,55]. Enhancing employee wellbeing can be highly beneficial for organizations [56]. Therefore, employers started focusing their attention on providing a healthy, pleasant, and supportive workplace [57] and various stimulative benefits [58] to increase the overall employee wellbeing in the workplace.

There are several prominent wellbeing models in the literature to explain and measure subjective wellbeing. Diener’s model of subjective wellbeing consists of three components: life satisfaction, positive affect, and negative affect. These emphasize an individual’s subjective experience of their own lives and wellbeing, regardless of external factors [59]. Ryff’s six-factor model was one of the first systematic models of psychological wellbeing, which identifies six core components of psychological wellbeing: self-acceptance, personal growth, purpose in life, positive relations with others, environmental mastery, and autonomy [60]. Seligman’s PERMA model of wellbeing represents five core elements of wellbeing (what PERMA stands for): positive emotion, engagement, relationship, meaning, and accomplishment [44]. Although all the above models have gained great attention in the literature and have been empirically verified, Seligman’s PERMA model of wellbeing has been the most widely acknowledged and broadly applied in the literature to enhance employee wellbeing [61,62]. It provides a holistic perspective to understand and improve employee wellbeing and has been validated in a diverse body of workplaces and occupations [63,64,65,66,67,68,69]. The current study explores employee wellbeing in the organizational setting. Therefore, Seligman’s PERMA model of wellbeing is more relevant to the current study and will be used to develop the theoretical framework.

2.3. PERMA Model of Wellbeing

Seligman [44] integrated the components of both the hedonic and the eudemonic approach of subjective wellbeing and outlined the following five components to inform an individual’s wellbeing. Positive emotion refers to one’s tendency to experience happiness, joy, love, gratitude, etc. Engagement is marked by being highly absorbed, emersed or experiencing flow while engaged in intense interest in an activity. A relationship is established and maintained to mutually benefit each other, characterized by experiences of feeling loved, cherished, valued, supported, and appreciated by others. Meaning refers to the experience of being connected to something larger than the self or serving a bigger purpose, which is achieved when one feels that their life has value and purpose. Finally, accomplishment refers to a sense of mastery over a particular domain of interest or achieving important or challenging life/work goals [44,70]. Together, these five factors act as indicators of a fulfilling life that contributes to optimal wellbeing. The five elements of the PERMA model are expected to enhance employee wellbeing in an organizational context when employees experience positive emotion, engage in their work activities, establish positive relationships with their coworkers and supervisors, have a meaningful job, and feel fulfilled at work with a sense of accomplishment. The current study intends to develop a theoretical model to connect a comprehensive list of sustainable HR policies and practices with the PERMA model of wellbeing to obtain a deeper understanding of both sustainable HRM and employee wellbeing.

3. Theoretical Framework

Previous research has proposed and examined various HR policies and practices that contribute to sustainable HRM in the promotion of employee wellbeing. Based on the work from [71,72,73,74,75], Stadler et al. [35] summarized the key principles of sustainable HRM that share the following commonalities: focus on long-term orientation; development of employee skills, knowledge, and potential; good employee–employer relationships; emphasis on employee care through maintaining and supporting their health and wellbeing. These principles of sustainable HRM serve as the foundation to the specific HR policies and practices in meeting the needs of employee wellbeing. Built upon the analysis of the empirical evidence about the antecedents of employee wellbeing, Guest [10] proposed the following five sets of HR practices that can promote aspects of employee wellbeing (p. 31). These specific HR practices provide a foundation to the theoretical framework proposed in this study.

• Investing in employees
  • Recruitment and selection
  • Training and development
  • Mentoring and career support
• Providing engaging work
  • Jobs designed to provide autonomy and challenge
  • Information provision and feedback
  • Skill utilization
• Positive social and physical environment
  • Health and safety a priority
  • Equal opportunities/diversity management
  • Zero tolerance for bullying and harassment
  • Required and optional social interaction
  • Fair collective rewards/high basic pay
  • Employment security/employability
• Voice
  • Extensive two-way communication
  • Employee surveys
  • Collective representation
• Organizational support
  • Participative/supportive management
  • Involvement in climate and practices
  • Flexible and family-friendly work arrangements
  • Developmental performance management

Researchers who study the impact of different HR policies and practices on employee wellbeing often treat employee wellbeing as a single construct. However, the PERMA model has been examined and validated in various work settings to show that employee wellbeing contains multiple dimensions and has been approved as a robust framework to measure and develop employee wellbeing [63,64,67,68,69,76,77,78,79,80]. The five elements of the PERMA model can be measured independently from each other and act as indicators of a fulfilling life that contributes to an individual’s subjective wellbeing [44]. Among the five elements of the PERMA model, positive emotion measures a wide range of hedonic feelings of happiness, such as joy, love, gratitude, hope, satisfaction, excitement, interest, pride, etc. These positive emotions help people flourish and thrive, producing positive outcomes, including a longer life and healthier social relationships [81]. In the workplace, positive emotions are frequently shown as connected to increased employee engagement, positive relationships, enhanced self-efficacy and competency, perceived autonomy, self-motivation, achievement and success [44,56,82,83,84,85]. Therefore, employees who score high on the other four elements of the PERMA model, including engagement, relationship, meaning, and accomplishment, are likely to experience positive emotions (the first element of the PERMA model), which in turn promote overall employee wellbeing.

As encouraged by Seligman [86], researchers have been actively exploring different ways to enhance, improve, and strengthen the PERMA model in work-related contexts. For example, Donaldson [87] and Donaldson et al. [88] found four additional elements (physical health, mindset, work environment, economic security) that could explain additional variance in workplace wellbeing, thus expanding the PERMA framework to PERMA+4. Instead of adding more components to the PERMA model, the current study proposes a slightly different approach to measure employee wellbeing. The current study considers the first element of the PERMA model (positive emotion) as an intermediate factor between the other four elements of the PERMA model and employee wellbeing. Employees in organizations where a certain set of sustainable HR policies and practices are adopted would most likely experience a higher level of engagement, relationship, meaning, and accomplishment, which in turn makes employees feel positive at work and ultimately promotes and enhances employee wellbeing. The following theoretical model (Figure 1) is proposed in this study, which will be discussed in detail below.

3.1. Engagement

Engagement refers to one’s deep involvement in activities that build upon specific and intense interests with true engagement and focus [81]. Engagement is an element in the PERMA model that represents flow, a positive mental state. A high level of engagement involves intense concentration, passion, focus, and absorption [89]. Engagement in the workplace refers to psychological connection to work tasks or organizations, which generates physical and psychological energies to perform, produce, and stay proactive [90]. Engaged employees feel positively involved in day-to-day tasks, which results in overall commitment to their work. Employee engagement reduces job stress from pressures or demands and generates positive work outcomes [91,92]. Engagement is closely connected with job characteristics. The job demands–resources (JD-R) theory [93,94] has been applied in the wellbeing literature to explain how job characteristics influence employee wellbeing and performance. It proposes that both job demands (demanding aspects of work such as workload, emotional demands, and work/non-work conflict) and job resources (resources that support work such as sufficient job autonomy, social support, development opportunities and feedback) play an important role in employee health and motivation [10]. According to the JD-R theory, employee wellbeing is primarily reflected by low levels of stress and burnout and high levels of work engagement [95]. Research based on this theory proves that the right HR practices can provide the necessary job resources to alleviate feelings of physical discomfort and help employees achieve their work-related goals, which in turn enhance both wellbeing and individual performance [22,96,97]. Based on the JD-R theory, the following HR policies and practices are considered to promote and enhance the dimension of engagement in the PERMA model of wellbeing.

• Engaging work and task identity with job resources;
• Jobs designed to provide autonomy and challenge;
• Information provision and feedback;
• Flexible work schedule, family-friendly work arrangements;
• Work–life balance, managing work–family conflict, life and family support;
• Healthy and safe working conditions, mental health support;
• Job security.

3.2. Relationship

The term relationship refers to closeness and connection with family, friends, or colleagues. Positive relationships mean being socially integrated, cared about, and satisfied with one’s social connections, which are established and maintained to mutually benefit each other. Positive relationships contribute to positive emotions in one’s wellbeing through the experiences of feeling cared for, loved, cherished, esteemed, valued, supported, and appreciated by others in one’s life [81]. Positive relationships at work come through great communication and interpersonal connection, which helps employees to be flexible, strong and resilient against setbacks and burnout [98]. Positive relationships can also enhance employees’ effectiveness, including task completion, career advancement, supportive friendship, mentorship, and self-growth [99]. High-quality work relationships are important throughout a person’s lifespan and contribute to workplace wellbeing in many ways. Social exchange theory is one of the main approaches in explaining human behaviors in social exchanges [100]. It has been used to explore individual behaviors and social relationships based on the cost and benefit exchanges; i.e., people do others a favor in exchange for some future benefit [101,102]. According to social exchange theory, when employees perceive that employers value employees’ general contributions, care for their wellbeing, and create a positive employment relationship, then employees will reciprocate and respond with positive work attitudes, motivations, and behaviors that can lead to enhanced performance [100,103,104]. Such work attitudes include organizational commitment and work engagement [96,105]. Motivations are reflected in willingness to collaborate and to engage in citizenship behaviors as well as higher energy levels [106,107]. Behaviors include lower absence, lower turnover and a stronger cognitive presence at work [108]. Based on social exchange theory, the following HR policies and practices are considered to promote and enhance the dimension of relationship in the PERMA model of wellbeing.

• Equal opportunities, diversity management, zero tolerance for bullying/harassment;
• Two-way communication, information sharing and employee surveys/voice;
• Social interaction, involvement, teamwork, partnership, and collective representation;
• Interpersonal relationships and relationship with immediate manager;
• Participative and supportive management and leadership;
• Sufficient supervisor and organizational support.

3.3. Meaning

Meaning refers to the feeling of “belonging to and serving something that you believe is bigger than the self” ([44], p. 17), which is achieved when one believes that one’s life is valuable and serves a bigger purpose [44,81,89]. People often find meaning when they engage in good deeds for others and are involved in low-risk activities to maintain good physical health [109]. Meaning in one’s work comes from connection and contributions to others in the workplace, which consists of self-value, motivation, individual interactions and relationships with coworkers, leaders, communities and family [110]. Meaning at work is cultivated from building culture; exercising vision and transformation; edifying charismatic leadership for common goals, values, and beliefs; and encouraging team building [111]. Employees feel their job is meaningful when they are able to and motivated to carry out their tasks with the opportunities provided by the organization, which is in line with the ability, motivation, and opportunity (AMO) theory [112,113]. The AMO theory posits that using practices to enhance employees’ abilities (fostering competencies), motivation (encouraging employees to participate) and opportunity to contribute (providing suitable working conditions to promote employee involvement) could enhance employees’ performance and wellbeing. When employees have the ability to perform their tasks, are motivated to pursue their goals, and gain the opportunities to get involved, they will feel meaning at work. Based on the AMO theory, the following HR policies and practices are considered to promote and enhance the dimension of meaning in the PERMA model of wellbeing.

• Challenging jobs, job quality, enriching and meaningful tasks;
• Strengthening and empowering (autonomy, voice, and feedback);
• Competency and skill variety and utilization;
• Self-motivation and self-efficacy;
• Employees’ role in an organization;
• Involved climate and team-building culture;
• Investment in employees and indirect compensation;
• Attractive career future and organizational support for career-related activities.

3.4. Accomplishment

Accomplishment refers to a sense of mastery over a particular domain of interest or achieving important or challenging life/work goals [44,70]. Accomplishment pertains to the pursuit of achievement, success, personal mastery, or competence at the highest level possible within a particular domain when one has a passion to attain certain goals. Achievement does not solely rely on intelligence but on effort and talent [114] as well as the power of perseverance or the desire or determination to achieve [44]. A sense of accomplishment at work can be achieved through feeling capable to perform daily tasks, making progress toward goals, and mastery of individual works, which leads to an employee’s good emotional health, higher engagement, and better cooperation [115]. Accomplishment is associated with high self-efficacy and low burnout levels [116], as well as better life satisfaction [63]. Employees need resources to achieve their work goals in addition to their ability and desire. The resource-based view (RBV) theory emphasizes the importance of identifying, developing, and leveraging unique and valuable internal resources, such as human resources, to achieve an organization’s competitive advantage, with human capital as the major means of leveraging organizational resources [117,118]. The RBV theoretical framework identifies the development of employees in the form of capacity building and task accomplishment, as well as the protection of natural resources, as essential elements for creating a competitive advantage [119]. Employees possess the knowledge, skills, and the essential competencies that help organizations gain competitive advantage. Organizations should provide the necessary resources to their employees to accomplish their tasks and achieve organizational goals. Based on RBV theory, the following HR policies and practices are considered to promote and enhance the dimension of accomplishment in the PERMA model of wellbeing.

• Employee learning and development;
• Developmental performance management;
• Mentoring, career support, and organizational support;
• Fair rewards and compensation system;
• Recognition program;
• Tolerance to errors.

Table 1. Sustainable HRM and the four elements of the PERMA model of employee wellbeing.

Sustainable HRM	PERMA Model
Engaging work and task identity with job resources Jobs designed to provide autonomy and challenge Information provision and feedback Flexible work schedule, family-friendly work arrangements Work life balance, managing work family conflict, life and family support Healthy and safe working conditions, mental health support Job security	Engagement
Equal opportunities, diversity management, zero tolerance for bullying/harassment Two-way communication, information sharing and employee surveys/voice Social interaction, involvement, teamwork, partnership, and collective representation Interpersonal relationships and relationship with immediate manager Participative and supportive management and leadership Sufficient supervisor and organizational support	Relationship
Challenging jobs, job quality, enriching and meaningful tasks Strengthening and empowering (autonomy, voice, and feedback) Competency and skill variety and utilization Self-motivation and self-efficacy Employees’ role in an organization Involved climate and team-building culture Investment in employees and indirect compensation Attractive career future and organizational support for career-related activities	Meaning
Employee learning and development Developmental performance management Mentoring, career support, and organizational support Fair rewards and compensation system Recognition program Tolerance to errors	Accomplishment

, below, summarizes the specific sustainable HR policies and practices associated with the four elements of the PERMA model of employee wellbeing.

4. Discussions

The recent systematic review of sustainable HRM conducted by Madero-Gomez et al. [120] highlights the need for organizations to develop sustainable HRM practices to promote and enhance employee wellbeing. Cinar and Bilodeau [5] also discussed the importance of mental health and wellbeing in implementing SDG3 to achieve organizational sustainable business goals, especially in the post-pandemic landscape. Garcia [6] reinforced the need for implementing sustainable HRM practices, which positively impact SDG3. In line with SDG3, developed by the United Nations, it is critical for organizations to implement sustainable practices focusing on their employees’ mental health and wellbeing to achieve sustainable development and, ultimately, their long-term competitive business goals. Based on the study of Herlina and Iskandar [27], which indicated sustainability as a core component of HRM theory and revealed the need for adopting sustainable HRM practices with the focus on employee wellbeing, the current study unfolds the link between sustainable HRM and employee wellbeing by investigating the specific sustainable HR policies and practices needed to improve employee wellbeing in organizations. Following Aust et al. [33], focused on the common good approach for sustainable HRM, which intends to use HRM policies and practices to help all employees, the current study explores what HR policies and practices are effective in making HRM systems more sustainable and more capable of contributing to SDG3, i.e., promoting and enhancing employee wellbeing in the workplace. In comparison with the other wellbeing models, such as Diener’s model of subjective wellbeing and Ryff’s six-factor model, Seligman’s PERMA model of wellbeing was selected in this study to serve as the theoretical foundation for the proposed framework. Seligman’s PERMA model provides a holistic view of wellbeing and has been applied and validated in various organizational contexts, which makes it the most suitable model to develop the theoretical framework for the current study. The conceptual framework developed in this study takes a different perspective on Seligman’s five components of the PERMA model. The first element of the PERMA model (positive emotion) is considered as highly correlated with the other four elements (engagement, relationship, meaning, and accomplishment). People who score high on engagement, relationship, meaning, and accomplishment are most likely to experience positive emotions, which in turn motivate overall employee wellbeing. Therefore, in the proposed theoretical framework, positive emotion serves as an intermediate factor between the other four elements in the PERMA model and employee wellbeing. Based on this theoretical framework, the current study further develops the specific sustainable HR policies and practices associated with each of the four elements in the PERMA model (engagement, relationship, meaning, and accomplishment) in promoting and enhancing employee wellbeing.

The current study adds significant conceptual contributions to the literature without limitations. It is the first attempt to use positive emotion as an intermediate factor based on the PERMA model. The mediation effect of positive emotion needs to be tested and validated by empirical studies. The current study adopts Seligman’s PERMA model of wellbeing in developing the theoretical framework. Future research may consider different wellbeing models other than Seligman’s PERMA model to further enrich the literature on subjective wellbeing. The specific sustainable HR policies and practices formed with the theoretical framework do not make up an exclusive list. Instead, they serve as a starting point for future exploration and need to be examined in empirical research. The intent of the current study is to encourage researchers to engage in empirical studies to examine and validate the proposed theoretical model and to further refine the model and identify the new phenomena related to sustainable HRM and employee wellbeing. Future research should extend the HRM literature by further exploring the conceptual models of sustainable HRM, as well as investigating the empirical relationships between sustainable HRM and employee wellbeing in various contexts.

5. Conclusions and Implications

This study makes several theoretical contributions to the existing literature on HRM and employee wellbeing. First, this study highlights the emerging trend of the development of sustainable HRM in contrast to the HPWSs, which offers an alternative approach to the HPWSs for promoting employee wellbeing. This study broadens the scope of sustainable HRM by forming a conceptual list of the specific HR policies and practices for organizations to achieve their sustainability goals through employee wellbeing. Second, this study sheds further light on the process through which sustainable HR policies and practices contribute to employee wellbeing. Unlike the existing literature, where most studies consider employee wellbeing as a single-dimension construct, the current study unpacks the construct of employee wellbeing into multiple dimensions using the PERMA model of employee wellbeing. The list of HR policies and practices may affect specific elements of employee wellbeing, which ultimately promote and enhance overall employee wellbeing. Third, this study proposes a different direction towards the five elements of the PERMA model by arguing that the following four elements (engagement, relationship, meaning, and accomplishment) all exert influence on the first element in the PERMA model, i.e., positive emotion of employee wellbeing, which in turn impact overall employee wellbeing. In other words, positive emotion serves as an intermediate factor between the four elements in the PERMA model and ultimate employee wellbeing. Lastly, the current study advances the understanding of the sustainable HRM literature by looking at sustainable HR policies and practices through the lens of employee wellbeing, which is consistent with what researchers have called for; i.e., wellbeing is one of the sustainability goals, a human-centered approach should be focused on, and wellbeing-oriented HRM practices should be developed to reach the sustainability goals.

In addition, the current study offers the following practical implications. Organizations have devoted their attention predominately to performance-oriented HR strategies in the past, often at the expense of employee wellbeing. Using the synthesis approach, researchers in the field of HPWSs have demonstrated that organizations can improve organizational performance through HPWSs and, at the same time, reduce the harm of HPWSs on employee wellbeing [19]. Sustainable HRM emphasizes employee mental health and wellbeing, fair treatment, employee development, an inclusive work environment, and environmentally responsible practices and policies [6,27]. Organizations should focus their efforts on long-term development programs that foster human nature and promote employee growth and wellbeing, which further inform employers on how to establish a sustainable workplace. As human resources are the most valuable resource for organizations and the driving force for the success of their business, organizations should invest in holistic HRM strategies to achieve their business outcomes, as well as the sustainability goals.