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American Journal of   Environmental
Economics (AJEE)

Green Human Resource Management and Employee Performance in an Emerging 
Economy: Mediating Role of  Job Satisfaction and Industry Type as Moderator

Farhan uddin Usmani1*

Volume 4 Issue 1, Year 2025
ISSN: 2833-7905 (Online)

DOI: https://doi.org/10.54536/ajee.v4i1.5762
https://journals.e-palli.com/home/index.php/ajee

Article Information ABSTRACT

Received: July 20, 2025

Accepted: August 27, 2025

Published: November  06, 2025

Green Human Resource Management (GHRM) has turned out to be a critical organisational 
strategy for managing environmental sustainability and conforming top employee 
performance. The purpose of  this study is to analyse the relationship between Green HRM 
practices and employee performance in an emerging economy (Pakistan) while investigating 
the mediating role of  job satisfaction, and the moderating role of  industry type. This study 
has utilised a quantitative research approach to evaluate this interrelationship. The target 
population of  this study includes employees working in different industries that implement 
GHRM practices. These industries include banking (service industry) and pharmaceutical 
and FMCG (Manufacturing industry). It ensures diversity in organisation practices and 
employee roles. The survey was filled by 400 respondents from these diverse industries 
employees. The data was analysed using Partial Least Squares-Structural Equation Modelling 
(PLS-SEM) analysis in SMART PLS. The findings revealed that both green recruitment 
and green compensation have a positive and significant impact on employee performance, 
whereas green performance has an insignificant impact on employee performance. Job 
satisfaction was also indicated to have a significant mediating role in the relationship between 
green compensation and employee performance and also between green performance and 
employee performance. Job satisfaction does not mediate the relationship between green 
recruitment and employee performance. Furthermore, the industry type did not have any 
moderating impact. The study contributes to understanding GHRM’s role in increasing 
employee performance, elaborating green recruitment and compensation as important 
drivers. Practically, it helps emerging economies to adopt tailored GHRM strategies, focusing 
on job satisfaction. Cross-industry findings support policy development for sustainable HR 
practices regardless of  sectors.

Keywords

Employee Performance, GHRM, 
Job Satisfaction, Sustainability

1 Nazeer Hussain University, Pakistan
* Corresponding author’s e-mail: farhanzia_23@yahoo.com

INTRODUCTION 
GHRM has turned out to be a critical organisational 
strategy for managing environmental sustainability and 
conforming top employee performance (Yong et al., 2020). 
That is why GHRM addresses environmental concerns 
through the green culture in human resource policies of  
recruitment, performance appraisal, and compensation. 
Hameed et al. (2020) as Pakistani environment gets more 
and more challenging it becomes pertinent to understand 
relationship between GHRM and employee performance. 
Precisely, this study examines the moderating influence of  
type of  industry and the mediating role of  job satisfaction 
for GHRM strategies and employees’ performance, and 
these findings offer substantial theoretical and practical 
contributions to the GHRM literature.
GHRM is defined as the process of  utilizing 
environmentally sustainable HR practices, which include 
green recruitment, green training, green performance 
appraisal and other environmentally sustainable activities 
to manage and develop human resources while improving 
organizational performance of  the company (Mousa & 
Othman, 2020). They have established moderate success 
in enhancing work commitment and productivity through 
sustainability norms that correspond with organizational 

beliefs.
The reason as to why GHRM should be implemented 
in Pakistan is based on the fact that the country faces 
sever environmental issues that include pollution, water 
rationing and deforestation among others (Shaikh & 
Mahesar, 2024). Furthermore, job satisfaction is postulated 
to moderate this relationship because of  its importance 
to the enhancement of  performance; moreover, the 
indistinct character of  industrial type as a consequence of  
distinctions in industrial practices and pressures explains 
its moderated role as well. This research seeks to fill these 
gaps by examining these relations in a vortex.
Company and stakeholders are demanding more 
adherence to environmentally friendly practices, despite a 
staggering number of  organizations failing to incorporate 
GHRM efficiency, both environmentally and employee 
performance (Truong et al., 2024). One major concern 
is that there is little fit between GHRM strategies and 
employee drivers which leads to low employee performance 
and job satisfaction. For example, green policies can 
be frowned at as non-essential or inconsequential by 
the employees and thus, they do not dedicate their 
energies. Besides, GHRM practices significantly differ in 
effectiveness in one industry or another because of  the 



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environmental regulation and operational constraints, 
and organizational culture differences (Aggarwal & 
Agarwala, 2023). As in many other developing countries, 
environmentally challenge such as pollution and scarcity 
of  resources require immediate attention in Pakistan, 
however, in many institutions, GHRM strategies are not 
properly developed to commemorate the requirement of  
different sectors, thus lead to erratic results.
The purpose of  this study is to analyse the relationship 
between Green HRM practices and employee 
performance in the context of  Pakistan while investigating 
the mediating role of  job satisfaction, and the moderating 
role of  industry type. It seeks to advance knowledge of  
how sustainable HR practices, which are HR solutions to 
industry-specific issues, improve employees’ productivity 
and facilitate other sustainability initiatives. This research 
is important to undertake due to increasing issues of  
environmental responsibility and workforce productivity 
in various sectors of  Pakistan. This study contributes 
to the literature on Green HRM by considering the 
moderating factor of  industry type as well as the mediating 
factor of  job satisfaction to prove how Green HRM may 
contribute positively to organizational performance. It 
generates recommendations to help the HR managers 
who want to develop organisational solutions for 
encouraging employee participation and performance in 
matters achieving organisational sustainability objectives. 
Further, it will help the theory of  Green HRM to develop 
by providing the much-needed insight into the subject 
and pave way for formulation of  tailor-made solutions 
depending on the industry demands.

LITERATURE REVIEW 
Overview of  Green Human Resource Management 
(GHRM)
GHRM and human resource management practices 
integrate together to produce environmentally friendly 
behaviours related to staffing techniques, training, 
performance appraisal and reward methods (Malik et 
al., 2021). It is a systemic concept designed to promote 
green culture in organisations and align them with 
overall sustainable management goals of  HRM. GHRM 
also ensures that organisations do not only conform to 
environmental standards but also enhances employees’ 
commitment, performance and organisation performance 
as well (Roscoe et al., 2019).
In the last decade, GHRM has received much attention 
globally. A bibliometric analysis of  GHRM research 
increases the publications by 200% in the period covering 
2015-2020 in order to demonstrate an increasing 
interests of  scholars in this domain (Pooja & Bhavani, 
2025). A circular economy initiative in Europe for 
sustainable practices envisages that the measures would 
generate about 700000 jobs by 2030. Equally, the ILO 
estimates that green economy could create 24 million 
more employments worldwide by the same year which 
makes GHRM practices to be economically beneficial in 
generating employment (Van der Ree, 2019).

The adoption of  GHRM corporate strategies is shaped 
by legal requirements and enviornmnetal pressures. Study 
by Chen et al. (2024) revealed that the manufacturing 
industries in different states including China have 
undergone appreciable changes to adopt green ideas. 
Shah and Soomro (2023) points out that companies that 
have adopted GHRM practices in China received added 
benefits of  15% increase in operation efficiency besides 
enjoying a boost in innovation. Likewise, the concepts of  
green recruitment and training in the hospitality sector 
have shown better results in terms of  satisfaction and 
retention of  the employees, increased by 10%.
Presently, the application of  GHRM in Pakistani 
organisations is in its infancy but is receiving a growing 
level of  recognition especially in industries that contribute 
to environmental degradation such as textiles and 
manufacturing (Zafar, 2023). Research also shows that 
firms that adopted green HRM practices had increased 
overall employee performance by 12% and enhanced 
organisational sustainability commitment.
The adoption of  GHRM has numerous advantages that 
include; enhanced thresholds of  organisational employee 
engagement. Employees are willing to participate in 
an organisation’s objectives in case they consider the 
employer an environmentally-friendly one (Gill et al., 
2021). For instance, green training and performance 
management systems were positively correlated with 
enhanced performance by 20% based on a survey carried 
out in 2022 (Al-Alawneh et al., 2024). Also, companies 
implementing GHRM practices may find improved 
branding, and get the attention of  talented employees 
who care about the environment. This trend is most 
noticeable in millennial and Gen Z employees, as 70% 
of  them believe the environmental policies are being 
implemented by the employer. 
Nonetheless, adoption of  GHRM comes with some 
challenges viewing the fact that most organisation will go 
for generic rather than human capital-oriented approach, 
especially where the environment is restrictive in terms 
of  resources (Boon et al., 2018). In contrast, most SMEs 
have limited financial and technical capital to support the 
effective execution of  efficient green HRM strategies. 
Also, change or organisational culture resistance and 
ignorance among the company’s employees and managers 
can also counter these efforts (Tasoulis et al., 2024). As a 
means of  overcoming these barriers, complete emphasis 
must be placed on the way that organisations are structured 
by focusing on ways of  establishing culture that sustains 
training on environmental issues. Governments and 
industry associations can also fulfils this role by providing 
motivation towards the use of  green practices through 
commendations and support programs.

Employee Performance and Its Determinants
There are few things in the organisation more important 
than performance of  its employees in the context of  
organisational effectiveness. The term is defined as how 
well employees embrace their responsibilities and bear 



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obligations to provide productivity and efficiency in the 
organisation (Atatsi et al., 2019). To sustain success and 
introduce long-term organisational objectives amidst a 
competitive and ever-changing business structure, it is 
crucial to maximize the performance of  organisational 
members. The factors of  performance are many and 
complex and can be grouped as organisational factors, 
personal factors, and environmental factors.
Performance may refer to measures of  employee 
productivity including achievements of  laid down tasks, 
quality of  the work produced, the level of  punctuality, 
and compliance to organisational requirements (Thierry, 
2018). Performance, in addition to personal contributions, 
encompasses groups, ideas, overview with organisational 
goals, and objectives. Not only do outstanding performers 
excel in achieving individual objectives but also generate 
organisational competitiveness, creativity, and the ability 
to adjust to new circumstances (Ferreira et al., 2020).
Organisational, individual and external interacting 
factors impact on the performance of  the employees. 
Leadership, HR practices, and work environment were 
identified as organisational determinants that explain 
levels of  performance. According to Graves et al. (2019), 
managerial leadership helps promote commitment and 
enthusiasm among the employees. Proper employee 
involvement dramatically improves organisational 
performance through functional HR processes such 
as selection, development and control of  employees’ 
behaviour. A friendly and stimulating organisational 
culture also ensures that employees give their best in an 
organisation (Ogbeibu et al., 2018). At the individual level 
the knowledge includes job satisfaction, skills required 
when performing the job, competencies and motivation. In 
essence, meaningfulness, perceived Organisational value 
and fit between personal and work-related requirements 
relate with performance. Other reasons that lead 
individuals to perform include, personalized motive, non-
personalized motive, incentive, stimulation, promotion, 
recognition, awards, and development chances. On the 
other hand, external factors such as economic outlook, 
competition, and culture define performance relations in 
terms of  job stability, intensity, and organisation stability 
(Akpa et al., 2021). All these determinants lie in a system 
thus making organisational contribution to organisational 
success a very dynamic process.
GHRM practices integrate sustainability in HR 
management objectives without a direct positive 
correlation to HR functions or employee performance 
(Amjad et al., 2021). It was established that by promoting 
a green culture within an organisation, employees are 
more inspired. For instance, green training programs 
enhances skill acquisition with an additional enhancement 
of  environmental goals creating a sense of  responsibility 
and thereby enhancing job satisfaction and commitment 
levels. A study by Roscoe et al. (2019) showed that 
an organisation with effective GHRM had enhanced 
performance by 20% than an organisation with no 
effective GHRM policies.

Performance is not a simple concept and is used in 
this paper to refer to overall organisational, individual, 
and external factors. The subsequent self-organizing 
variable includes job satisfaction, motivation, and skills, 
which help determine how much an employee can assist 
an organisation (Ogbeibu et al., 2018). While practicing 
such growing trends as GHRM, it is possible to expand 
the lists of  opportunities provided by implementing 
sustainability into the practices of  the human resource 
management, thus creating the competitive advantages for 
the organisation and contributing to the accomplishment 
of  the global goals for sustainability (Amjad et al., 2021).

Mediating Role of  Job Satisfaction
Organisational job satisfaction mediated the effect of  
GHRM practices on employee performance. Irabor and 
Okolie (2019) highlighted that job satisfaction refers to 
a worker’s evaluation of  workplace culture and climate, 
having regard to their level of  satisfaction of  workplace 
policies, working conditions and prospects for career 
advancement. This mediating role is important because 
it suggests that satisfied employees are more likely to 
demonstrate enhanced motivation, elevated levels of  
engagement and optimum organisational performance 
which are crucial organisational performance objectives 
of  the HRM practices (Alsomaidaee 2023; Quader, 2024).
Green recruitment, sustainable performance evaluation 
and environmental friendly reward systems are 
GHRM practices that intend to match organisational 
responsibilities with sustainable initiatives. According 
to Susanto (2023), they help create a positive image in 
the eyes of  stakeholders regarding the organisation’s 
responsibility towards society and environment, which 
in turn boosts employees’ satisfaction. It has been found 
that organisational sustainability is positively associated 
with perceived role meaning, to imply a higher level of  
commitment towards organisational roles by employees 
(Cheema et al., 2020). The degree to which employee 
values correspond to job values enhances job satisfaction, 
hence a positive impact on its performance.
The study by Baluyos et al. (2019) state that job satisfaction is 
related to the performance improvement. Research shows 
that GHRM practice implemented at workplace enhance 
organisational climate which helps in minimizing stressful 
environment and optimize the level of  job appropriation 
by encouraging measure. For instance, the green training 
schemes facilitate a reinforcement of  knowledge and 
competencies on matters of  ecological management so as 
to foster their usefulness to the corporate goals (Quader, 
2024). It makes them empowered, which leads to job 
satisfaction that will determine their performance results.
Further, the mediation of  job satisfaction means that the 
psychological process explaining the GHRM-employee 
performance has received attention. This means that 
if  employees receive high levels of  satisfaction at the 
workplace, they tend to demonstrate healthy workplace 
behaviours, which entail staking out higher productivity, 
innovativeness, and cooperation (Baluyos et al., 2019). 



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On the other hand, job dissatisfaction has negative 
implications on a firm, which include disengagement, 
intentions of  leaving and reduced organisational 
commitment, all of  which counteract the effectiveness of  
GHRM practices (Susanto, 2023).

Moderating Role of  Industry Type
Industry type has relation with both Green Human 
Resource Management (GHRM) practices and employee 
performance; it is quite suitable in the context of  Pakistan. 
Pakistan industries are different in terms of  pollution 
index, government regulation policies and constrain in 
availing natural resources so the factors affecting the 
implementation of  GHRM are moderate (Hassan et al., 
2019). These variations need to be explored to ensure 
that green initiatives can be targeted at organisations to 
have the best effect.
Manufacturing sector of  Pakistan comprises of  around 
13% of  the GDP and provides approximately 15% 
employment to the total labor force of  the country but 
it is heavily cost-effective in terms of  energy utilization, 
emissions and waste generation (Khan et al., 2023). 
Industries, especially in textile, energy and chemicals 
sectors, are forced to integrate GHRM practices due to 
global sustainability standards’ increasing concern with 
environmental compliance. For instance, textile which 
contributes up to 60% of  the total exports of  Pakistan 
is integrating more sustainable practices to thus adapt to 
market requirements (Mehar, 2022). Other programmes 
under GHRM include green performance management 
through environmental training of  its employees in 
relation to sustainable goals; this fosters satisfaction and 
improved results among employees.
On the other hand, the industries or sectors like IT, 
banking, telecommunications etc that forms 58% of  the 
economic growth in Pakistan, have relatively small issues 
with environment (Nizam et al., 2020). Hence, these 
sectors emphasize on simple solutions of  GHRM to give 
a sustainable solution such as virtual recruitment and 
paperless system. However, these initiatives are relatively 
cheaper to implement, the perceived improvements in 
employee performance is weaker as compared to high 
impact industries. For example, Ahmed et al. (2021) 
revealed that 72% of  the employees of  the banking sector 
consider GHRM practices as non-strategic activities, 
which indicates that there is a gap in the execution of  
these programmes.
Besides, it revealed that the regulatory environment and 
culture play a central role in the adoption of  GHRM 
across the firms in Pakistan. The study by Stavropoulos et 
al.  (2018) also shows that National Environment Quality 
Centres (NEQs) provide more stringent environmental 
regulations for manufacturing industries than services 
sectors, hence encouraging more manufacturing industries 
to adopt environmental friendly practices. Nevertheless, 
lack of  resources and awareness reduces the ability of  
small industries to integrate strategic GHRM approaches 
(Kodua et al., 2022). For example, more than ninety 

percent of  the firms in Pakistan’s industry sector are 
categorized as SMEs, and often they cannot contribute 
significantly enough on the impact of  green practices 
on the performance of  their human assets due to their 
constrained financial and technical capabilities.

Hypothesis Development
H1: Green recruitment has a positive impact on 

employee performance.
H2: Green performance management has a positive 

impact on employee performance.
H3: Green compensation has a positive impact on 

employee performance.
H4: Green recruitment positively influences job 

satisfaction.
H5: Green performance management positively 

influences job satisfaction.
H6: Green compensation positively influences job 

satisfaction.
H7: Job satisfaction has a positive impact on employee 

performance.
H8: Job satisfaction mediates the relationship between 

green recruitment and employee performance.
H9: Job satisfaction mediates the relationship 

between green performance management and employee 
performance.

H10: Job satisfaction mediates the relationship between 
green compensation and employee performance.

H11: Industry type moderates the relationship between 
green recruitment and employee performance.

H12: Industry type moderates the relationship 
between green performance management and employee 
performance.

H13: Industry type moderates the relationship between 
green compensation and employee performance.

Research Model/Conceptual Model 

Figure 1: Conceptual Model

MATERIALS AND METHODS 
Methods and Materials 
This study has utilised quantitative research approach 
to evaluate the impact of  GHRM on the employee 
performance whereas job satisfaction serves as the 
mediator and industry type as moderator. The research 
has adopted causal relationship research design to evaluate 
direct and indirect relationship among the variables. The 



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research framework is structured to evaluate the impact 
of  GHRM practices on employee performance mediated 
through job satisfaction and moderated from industry 
type. The design is selected for its ability to provide 
complex relationships and provide insights about the 
interaction between these variables. Sekeran and Bougie 
(2016) indicated that researches that evaluate the cause 
and effect relationship are suitable to be conducted using 
the quantitative approach. Therefore, this approach 
seems to be most suitable for the research. 
The target population of  this study includes employees 
working in different industries that implement 
GHRM practices. These industries include banking, 
pharmaceutical and FMCG sectors. It ensures diversity 
in organisation practices and employee roles. The sample 
size of  the research was targeted to be 385 respondents 
to ensure robust analysis. The questionnaire were sent to 
750 respondents out of  which 427 respondents has filled 
the survey. However, after cleaning for the missing data 
400 responses were left to be evaluated. 

Research Instrument 
Green Recruitment
Green recruitment instrument outlined by Haldorai et 
al. (2022) has been used to evaluate the extent to which 
organisation utilises environmental concerns, knowledge 
and attitudes into recruitment process. It involves 
statements focusing on the organisation commitment to 
select candidates with strong environmental awareness 
and values. The instrument provide valuable insights 
about how green practices are integrated into recruitment 
strategies helping organisation to evaluate their efforts to 
attract environmentally conscious employees.  

Green Compensation 
Green compensation scale proposed by Haldorai et 
al. (2022) measured how organisation has incentivised 
employees for their contribution to environmental 
sustainability. It includes statement to evaluate rewards 
given to employees to suggest improvements in 
environmental programs attaining environmental 
goals and taking proactive steps in environmental 
management. 

Green Performance 
Green performance scale developed by Haldorai et al. (2022) 
indicated how organisation can integrate environmental 
goals into employee performance evaluations. It 
includes statement related to the implementation of  
environmental objectives for all employees, evaluating 
individual contribution to environmental management 
and potential consequences for employees failing to 
meet environmental performance expectations. It helps 
in measuring the degree of  environmental performance 
incorporated into employee evaluation and its impact 
on career progression, reinforcing sustainability as key 
performance factor. 

Employee Performance 
Job performance scale was designed to measure both 
task performance and contextual performance. The scale 
evaluates the effectiveness of  employees in completing 
their core job responsibilities and contribute to the 
overall work environment. It involves items evaluating 
productivity, quality of  work and goal achievement along 
with behaviours supporting organisation culture and 
teamwork.

Job Satisfaction 
The job satisfaction survey (JSS) or comparable validated 
scale was designed to measure different aspect of  job 
satisfaction which include work condition, compensation 
and career development opportunities. The scale 
measures employee feelings about work environment, 
salary and overall satisfaction. It provides insights about 
how these factors can impact on the satisfaction (Reponte 
& Doble, 2025). 

Industry Type 
The industry type is taken as categorical variable in the 
demographic profiling which includes two options that 
is manufacturing or service industry. The respondent 
working in any of  the manufacturing industry would 
select 1 while service industry employee would select 
2. This has helped in evaluating the differences across 
industry types. 

Data Analysis 
The study has undertaken the data cleaning as the crucial 
initial step to study the impact of  GHRM on the employee 
performance with job satisfaction as mediator and 
industry type as moderator. The responses were screened 
for missing, incomplete or inconsistent data. There was 
not such data found and hence there were no remedies 
taken for these steps. The data was further analysed using 
structural equation modelling (SEM) using SMART PLS. 
It includes the confirmatory factor analysis to evaluate 
the reliability and validity of  the instrument. Further, path 
analysis was used to confirm the hypothesis testing. 

RESULTS AND DISCUSSIONS
Descriptive Statistics 
Table 1 above shows the descriptive statistics of  the 
variables. It shows that green recruitment has the mean 
value of  3.49 with standard deviation of  0.915 which 
means that green recruitment practices are moderate 
to high. Furthermore, green performance has the 
mean value of  3.52 with standard deviation of  0.817 
indicating that green performance is moderate to high. 
Furthermore, green compensation has the mean value of  
3.57 showing moderate to high green compensation for 
the given sample. Employee performance has the mean 
value of  3.70 showing that the employees have relatively 
higher performance. Job satisfaction has the mean value 
of  3.82 with standard deviation of  0.679 showing higher 
satisfaction in average respondents.



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Table 1: Descriptive Statistics
N Minimum Maximum Mean Std. Deviation

Green Recruitment 400 1 5 3.493 0.915
Green Performance 400 1 5 3.521 0.817
Green Compensation 400 1 5 3.573 0.867
Employee Performance 400 1 5 3.703 0.770
Job Satisfaction 400 1 5 3.829 0.679

Table 2: Multi-collinearity
VIF

Green Compensation -> Employee Performance 1.935
Green Compensation -> Job Satisfaction 1.724
Green Performance -> Employee Performance 1.504
Green Performance -> Job Satisfaction 1.452
Green Recruitment -> Employee Performance 1.861
Green Recruitment -> Job Satisfaction 1.853
Job Satisfaction -> Employee Performance 1.297

Multi-Collinearity
Table 2 shows multi-collinearity statistics. A variance 
inflation factor (VIF) value below 5 or 10 shows that 
the multi-collinearity does not exist in the model while 
value above threshold shows higher multicollinearity. The 

table above shows that VIF values are less than 5 for all 
variables, showing that the issue of  multicollinearity does 
not exist. 

Confirmatory Factor Analysis 

Figure 2: Measurement Model using Confirmatory Factor Analysis showing Outer loadings, P-values, and R-Square

Outer Loadings
Table 3 below shows the outer-loading value for each 
construct and its indicators. The outer loading value is 
used to evaluate the validity of  the indicators to measure 
the constructs. The study conducted by Latan et al. 

(2017) indicated that the value of  outer loadings must be 
above 0.6 to ensure the validity of  the factor. The table 
indicates that all the factors are above 0.6 indicating that 
no indicators are required to be dropped and hence it is 
valid.



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Table 3: Outer Loadings
Construct Indicator Outer loadings
Employee Performance EP1 0.904

EP2 0.927
EP3 0.905

Green Compensation GC1 0.891
GC2 0.925
GC3 0.881

Green Performance GP1 0.812
GP2 0.898
GP3 0.848

Green Recruitment GR1 0.880
GR2 0.899
GR3 0.858

Job Satisfaction JS1 0.831
JS2 0.893
JS3 0.886
JS4 0.899

Construct Reliability and Validity
Table 5 above shows the construct’s reliability and 
validity. For testing the reliability of  the constructs, 
Cronbach’s alpha and composite reliability have been 
applied. The results are reflected in Table 1 for the 
reliability showing internal consistency. Kline (2015) has 
reflected that Cronbach’s Alpha and composite reliability 
must be higher than 0.7. Table 4 shows that variables 
have higher internal consistency, confirming reliability 
since employee performance Cronbach’s alpha is 0.899, 
green compensation Cronbach’s alpha is 0.881, green 
performance has Cronbach’s alpha of  0.812, green 

recruitment Cronbach’s alpha is 0.853 and Job satisfaction 
Cronbach’s alpha of  0.9. The composite reliability of  
employee performance is 0.899, and green compensation 
is 0.881, green performance is 0.812, green recruitment is 
0.853, and job satisfaction is 0.900. 
Furthermore, the table also reflects the convergent 
validity that describes the extent of  relatedness which is 
illustrated through Average Variance Extracted (AVE) 
having threshold value of  0.5 (Hair et al., 2017). The 
results indicated in Table 5 shows that AVE values are 
higher than 0.5 and hence data contain convergent 
validity. 

Table 4: Construct Reliability and Validity
Cronbach's alpha Composite reliability Average variance extracted (AVE)

Employee Performance 0.899 0.899 0.832
Green Compensation 0.881 0.882 0.808
Green Performance 0.812 0.815 0.728
Green Recruitment 0.853 0.855 0.773
Job Satisfaction 0.900 0.901 0.771

Discriminant Validity 
Table 5 above indicates discriminant validity of  the 

variables. Discriminant validity is also deemed a large 
aspect as related to data validity that has to be ensured. 

Table 5: Discriminant Validity
Employee 
Performance

Green 
Compensation

Green 
Performance

Green 
Recruitment

Job 
Satisfaction

Employee Performance
Green Compensation 0.733
Green Performance 0.470 0.557
Green Recruitment 0.616 0.719 0.631
Job Satisfaction 0.521 0.503 0.408 0.317



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On this regard, HTMT ratio is applied for which assists 
in identifying distinctiveness between various variables 
of  the study to prevent multicollinearity problem 
(Wong, 2011). It has elaborated that in order to make 
much sense the HTMT ratio has to be below 0.85. This 
discriminant validity is highlighted in table 6 above 

using the HTMT ratio. This means that all the value 
are below this threshold of  0.85. Thus, data has not 
violated the assumption of  discriminant validity in the 
present study.

Path Analysis

Figure 3: PLS Bootstrapping showing P-values and R-Square

Table 6: Hypothesis Testing using Path Analysis 
Path Coefficient T statistics P values

Green Compensation -> Employee Performance 0.498 5.441 0.000
Green Performance -> Employee Performance -0.035 0.470 0.638
Green Recruitment -> Employee Performance 0.282 3.623 0.000
Green Performance -> Job Satisfaction 0.200 3.013 0.003
Green Compensation -> Job Satisfaction 0.404 6.047 0.000
Green Recruitment -> Job Satisfaction -0.080 1.118 0.264
Job Satisfaction -> Employee Performance 0.225 3.808 0.000
Industry Type x Green Recruitment -> Employee Performance -0.106 0.930 0.353
Industry Type x Green Performance -> Employee Performance 0.082 0.808 0.419
Industry Type x Green Compensation -> Employee Performance -0.135 1.082 0.279
Green Compensation -> Job Satisfaction -> Employee Performance 0.091 2.893 0.004
Green Performance -> Job Satisfaction -> Employee Performance 0.045 2.430 0.015
Green Recruitment -> Job Satisfaction -> Employee Performance -0.018 1.033 0.301

Table 6 below shows the path analysis for the model to 
test the hypothesis. It shows that green compensation 
(B= 0.498, P= 0.00) positively and significantly impacts 
employee performance. Furthermore, green performance 
(B= -0.035, P= 0.638) has a negative and insignificant 
impact on employee performance. Green recruitment 

(B= 0.282, P= 0.000) positively and significantly 
impacts employee performance. Green performance 
(B= 0.200, P= 0.003) positively impacts job satisfaction. 
Furthermore, green compensation (B= 0.404, P= 0.00) 
positively influences job satisfaction. It also indicated that 
green recruitment (B= -0.080, P= 0.264) has a negative 



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and insignificant impact on job satisfaction. Furthermore, 
job satisfaction (B= 0.225, P= 0.00) positively impacts 
employee performance. 
Furthermore, the moderating effect of  industry type 
between green recruitment and employee performance 
is negative and insignificant (B= -0.106, P= 0.353). The 
industry type positively and insignificant moderates the 
relationship between green performance and employee 
performance (B= 0.082, P= 0.419). Further, industry 
type also negatively and insignificantly moderates the 
relationship between green compensation and employee 
performance. Hence, industry type does not moderate 

the relationship between green HRM and employee 
performance. 
Additionally, job satisfaction mediates the relationship 
between green compensation and employee performance 
positively and significantly (B= 0.091, P= 0.004). Further, 
it positively and significantly impacts the relationship 
between green performance and employee performance. 
Further, job satisfaction negatively and insignificantly 
mediates the relationship between green recruitment and 
employee performance. 

Hypothesis Assessment

Table 7: Hypothesis Testing using Path Analysis 
Hypothesis Decision
H1: Green recruitment has a positive impact on employee performance. Accept
H2: Green performance management has a positive impact on employee performance. Reject 
H3: Green compensation has a positive impact on employee performance. Accept 
H4: Green recruitment positively influences job satisfaction. Reject 
H5: Green performance management positively influences job satisfaction. Accept 
H6: Green compensation positively influences job satisfaction. Accept 
H7: Job satisfaction has a positive impact on employee performance. Accept
H8: Job satisfaction mediates the relationship between green recruitment and employee performance. Reject
H9: Job satisfaction mediates the relationship between green performance management and 
employee performance.

Accept 

H10: Job satisfaction mediates the relationship between green compensation and employee 
performance.

Accept

H11: Industry type moderates the relationship between green recruitment and employee 
performance.

Reject 

H12: Industry type moderates the relationship between green performance management and 
employee performance.

Reject 

H13: Industry type moderates the relationship between green compensation and employee 
performance.

Reject

Discussion and Recommendation 
The study has aimed to evaluate the impact of  
GHRM practices on the employee performance, job 
satisfaction, and the mediating and moderating roles 
of  job satisfaction and industry type respectively. 
Through these objectives, the study contributes valuable 
insights about the effectiveness of  GHRM practices 
and their implications for organisational sustainability 
and employee performance. The conclusion from 
this study are based on the analysis of  the relationship 
between GHRM practices like green recruitment, green 
performance and green compensation, job satisfaction, 
employee performance and moderating role of  industry 
type. The research findings aligns with the hypothesis 
outlined in the study providing significant implications 
for both theory and practices in GHRM realm. 
The study demonstrated that green recruitment and 
green compensation significantly and positively impact 
on employee performance, validating that HR practices 
focused on sustainability and environmental values 
positively impact on employee outcomes. Particularly, 

green recruitment ensures that employees align with 
organisation sustainability goals resulting in higher 
commitment and performance. Green compensation 
motivated the employees further by providing rewards 
linked to environmental contributions, increasing 
performance. On the other hand, green performance 
reflected negative and insignificant relationship 
with employee performance. It indicates that green 
performance management system might not always 
translate into immediate improvements in employee 
performance potentially considering mismatch in 
expectation or implementation. 
The impact of  GHRM on job satisfaction was also 
a significant aspect of  the study. It found that green 
compensation and green performance significantly and 
positively impact on the job satisfaction. Employees that 
receive rewards for engaging in green practices report 
higher satisfaction since they perceive these rewards as 
recognition of  their contribution to the organisation’s 
sustainability effort. Similarly, green performance also 
contributes to job satisfaction by linking employees 



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green initiatives with their performance evaluation. 
However, green recruitment has been insignificant for 
job satisfaction indicating that while recruitment based 
on sustainability values align employees with organisation 
goals, it does not improve job satisfaction. 
Job satisfaction was also indicated to have a significant 
mediating role in the relationship between green 
compensation and employee performance and also 
between green performance and employee performance. 
It suggests that employees who are satisfied with 
green compensation and performance practices highly 
demonstrate higher performance levels. In contrast, job 
satisfaction does not mediate the relationship between 
green recruitment and employee performance, showing 
that factors other than job satisfaction can influence 
performance outcomes in this context. 
The industry type has been considered as the moderating 
factor between GHRM practices and employee 
performance. However, findings indicated that industry 
type did not moderate significantly in these relationships. 
It indicates the impact of  GHRM practice on employee 
performance is relatively consistent across various 
industries, which indicates that sustainability-oriented 
HR practices are universally related across organisation 
contexts. Despite expectations that industries like 
manufacturing might show stronger effect due to higher 
focus on sustainability, the lack of  moderating effect 
points to the increasing focus and recognition of  GHRM 
practices in different sectors as well. 
Therefore, this study elaborate the critical role of  
GHRM practices on impacting both job satisfaction 
and employee performance. Green recruitment and 
green compensation as found to have positive impact 
on employee performance, whereas green performance 
did not have much impact. The mediating role of  job 
satisfaction was confirmed for both green compensation 
and green performance that underlines significance of  
employee satisfaction to translate green practices into 
increased performance outcomes. However, industry 
type was not a significant moderator here, reflecting that 
the positive effect of  GHRM practices is widely used in 
other sectors. 

Recommendations
The analysis showed that Green Recruitment has a 
positive relationship with the performance level of  the 
employees; however, it has no correlation with their 
satisfaction levels. It is recommended that organisations 
ensure that their recruitment patterns link the values 
of  all candidates to sustainability strategies and thereby 
guarantee that people working in organisations come to 
work with the natural inclination towards environmental 
objectives. A key strategy that companies ought to follow 
is the recruitment of  personnel with a passion of  fulfilling 
sustainability and environmental responsibilities. Still, 
it must be noted that increasing the level of  employee 
performance does not necessarily guarantee job 
satisfaction and, therefore, possibly Green Recruitment’s 

most significant limitation. To this end, organizations 
may enhance job satisfaction by adopting more effective 
communication regarding sustainability engagement 
and by providing proper expectations regarding the 
sustainability implementation in the workplace. The study 
also finds out that Green Compensation enhances positive 
reaction to performance and job satisfaction. Companies 
ought to incorporate green rewards into compensation 
package where employees are rewarded for their 
contribution to sustainable activities or for accomplishing 
certain amount of  environmental performance. To that 
extent, compensation-rewarding green performance 
not only encourages sustainable behavior among Line 
Managers but also enhances their job satisfaction. Other 
examples of  green compensation may include incentives 
for saving energy, recycling, or adopting any other act 
that would show support and increase organizational 
commitment towards sustainability as much as improve 
employee satisfaction. While Green Performance was 
insignificant and negative in its impact on employee 
performance in this research, it remains a factor that 
organisations can perform better in terms of. It’s 
important that organizations implement performance 
management systems that communicate over arching 
expectations of  the environment within the company 
and the frequent feedback given on green activities. For 
green performance management to be effective there 
is need to ensure that the employee is able to relate his 
performance to goals of  sustainability. In addition, the 
performance standards should indicate what employees 
need in terms of  tools, training, or support to deliver 
on these standards. Through integrating green goals in 
the measure and evaluation systems, it becomes possible 
to increase the motivation of  employees in the field 
of  sustainability performance and their organizational 
accomplishments.

Limitations
There are certain limitations prevalent to this study while 
providing useful insights about the context. First of  all, 
the number of  respondents 400 can hardly be considered 
sufficient to obtain a representative of  industries, regions, 
and cultures, so the generalization of  the results may be 
questionable. A more diverse and larger population might 
give further insight with regard to Green HRM practices 
on various fields or industries. Moreover, the study 
adopted a cross-sectional research design hence limiting 
the possibility of  showing the causality between Green 
HRM practice and the employee outcomes. The study 
could have given more conclusive results if  it were done 
cross-sectionally, or better still a longitudinal one. The use 
of  self-report data also put forward another limitation 
since the results suffer from social desirability or response 
bias where participants always tend to presents higher level 
of  satisfaction or performance than their actual. Finally, 
it is important to note that Green HRM and employee 
performance data used in this research indicate that 
industry type had relatively weak two-way interaction with 



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Green HRM and the performance indicators, This could 
be due to the fact that the available industry type range in 
the data set may not be large enough for a generalizable 
assessment of  the degree to which differences in industry 
type moderate the relationship between Green HRM and 
employee performance. It is necessary to continue the 
future research to eliminate the mentioned weaknesses 
and obtain more clear results related to the topic.

Future Research Directions
Future research in the area of  GHRM can explore 
various directions to expand on the findings of  the 
research. Firstly, a longitudinal study can be beneficial to 
evaluate the long term impact of  GHRM on employee 
performance and job satisfaction since this study used 
cross-sectional design. Longitudinal design can help 
in establishing causal relationship and provide clear 
understanding about impact of  GHRM on employee 
performance over time. Furthermore, the future studies 
can evaluate the moderating role of  other contextual 
factors like organisational culture, leadership style or 
organisation size. These factors can potentially influence 
GHRM effectiveness and provide nuanced insights 
about these practices work in different organisation 
settings. Thirdly, industry-specific studies can provide 
a deep understanding of  the way GHRM practices are 
implemented and perceived in different sectors. Research 
can investigate the unique challenges facing the industries 
like services, manufacturing, or technology and how these 
impact on the adoption of  GHRM practices. Finally, 
exploring the employee perceptions and experiences 
through qualitative methods like interviews or focus 
groups can provide rich insights about GHRM perception 
of  employees and its effect on different dimensions. It 
would complement quantitative findings and providing 
holistic view of  the issues. 

CONCLUSION
This research evaluated the influence of  GHRM practices 
on job satisfaction and employee performance and also 
their mediating role and moderating influence of  industry 
type. The results showed that green compensation and 
green recruitment have a positive influence on employee 
performance and green compensation significantly 
emerged as an influential factor by connecting rewards 
with sustainability results. Conversely, green performance 
management had negligible impacts on performance, 
with implications of  difficulty in expectation alignment 
and implementation. Job satisfaction played a significant 
mediating role in the links between green compensation, 
green performance, and employee performance, 
highlighting its significance in the conversion of  
sustainable HR practices to improved results. Industry 
type failed to moderate these links, which implies that the 
effect of  GHRM practices is uniform across industries. 
In general, the research emphasizes the importance of  
integrating sustainability into HR practices in order 
to increase employees’ satisfaction and performance, 

confirming the worldwide applicability of  GHRM to 
organisational success.

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