Green Human Resource Management and Employee Pro-Environmental Behavior: Environmental Knowledge Best Mediate or Moderate the Relationship?

Abstract

Malaysia is known as a laggard in adopting environmental and social elements in projecting economies towards greener growth pathways. Accordingly, Malaysia should address this issue by directing efforts towards low-carbon and inclusive green economies rather than simply growing the economy faster. The service sector is regarded as the largest GDP contributor to economic growth. However, it demonstrates the relatively slower pace of green practices and thinking in Malaysian financial institutions. This study aims to examine the role of seven green human resource management practices as independent variables and environmental knowledge in explaining the pro-environmental behavior of employees. PLS-SEM was utilized to ascertain the causal effect between the variables, and the results were based on a survey collected from employees (N=366) in six Malaysia Development Financial Institutions (DFIs). The findings indicate that four out of seven independent variables have a positive direct effect on employee pro- environmental behavior (R2 = 68.4 percent). On the other hand, the results suggest that environmental knowledge is not an important mediator or moderator in enhancing employee behavior within this study context. However, it is worth taking into consideration that this knowledge, if utilized properly through proper implementation of organizational green practices, will enhance employee pro-environmental behavior. In other words, the significant determinants should be improved, and the non-significant determinants should be looked closely upon and strategized properly to create the same positive impact on environmental behavior. This study has extended the research on employees in six Malaysian DFIs by examining the influence of the Ability-Motivation-Opportunity core constructs. These examinations resonate with the necessity to understand whether the constructs together with personal norms of the Norm Activation Model can explain employees’ environmental behavior. This study established an alternative philosophical framework for employees and organizations to adopt a transformative change strategy.