Sustainable HR for Future-Ready Organizations: An OB Perspective with observations at Tesla

  • Prof. Dr. Chaitanya Niphadkar Academic Community Member, Harvard Business School Online, Boston (USA) Verified “EDUCATOR” of Harvard Business Impact (USA)
    Scopus Author ID: 601G4072800 | Orcid ID: 0000-0003-4371-G608

Abstract

Sustainable Human Resource Management (SHRM) is an emerging strategic approach that integrates sustainability principles into workforce planning, employee development, and organizational culture. Unlike conventional HRM models that often focus on short- term efficiency and performance, SHRM emphasizes long-term employability, employee well-being, ethical employment practices, diversity and inclusion, and resilient organizational systems. This article explores SHRM through the lens of Organizational Behavior (OB), highlighting how motivation, culture, leadership, justice, and change management influence sustainable HR practices. A case study of Tesla is included to evaluate how a sustainability-driven organization manages its workforce and the challenges it faces in balancing high performance with human sustainability. The study concludes that organizations must embed sustainability internally through HR systems and behavioral culture, rather than focusing only on external sustainability outcomes.

Keywords: Sustainable HRM, Sustainable HR, Organizational Behavior, employee well- being, organizational justice, ethical leadership, Tesla, sustainability culture, employee engagement

  • Introduction

Organizations worldwide are increasingly operating in environments shaped by climate challenges, technological disruption, demographic shifts, and evolving employee expectations. These forces have encouraged many firms to adopt sustainability strategies. However, sustainability cannot be achieved solely through environmentally responsible products or corporate social responsibility initiatives. It must also be reflected in how organizations manage their people. This requirement has contributed to the development of Sustainable Human Resource Management (SHRM), which integrates sustainability principles into Human Resources (HR) policies, workforce systems, and organizational culture (Ehnert, 2009; Kramar, 2014).

SHRM focuses on balancing productivity and competitiveness with employee well-being, fairness, and long-term workforce resilience. It treats employees not merely as instruments of performance but as stakeholders whose health, development, and dignity are essential to organizational continuity. As a result, SHRM is increasingly viewed as a strategic framework for organizations seeking long-term success while maintaining ethical and social legitimacy.

  • Conceptual Framework: Sustainable Human Resource Management

Sustainable Human Resource Management refers to HR practices that support long-term organizational performance while maintaining and regenerating human resources over time. It includes strategies that prevent burnout, improve work-life balance, strengthen employee engagement, and promote ethical and equitable employment practices (Docherty, Kira and Shani, 2009; Pfeffer, 2018).

  • Principles of SHRM

SHRM is commonly grounded in the following principles:

  • Long-term orientation: HR decisions should prioritise continuity rather than short-term gains
  • Employee well-being: protecting psychological and physical health
  • Ethical employment: fairness, transparency, and respect for employee rights
  • Human development: continuous learning, reskilling, and career progression
  • Stakeholder alignment: balancing organizational goals with societal and employee expectations

Ehnert (2009) argues that SHRM is shaped by a paradox, as organizations must simultaneously achieve economic performance while preventing human resource depletion.

  • Literature Review
  • From Strategic HRM to Sustainable HRM

Strategic HRM focuses on aligning HR practices with business strategy to enhance performance. However, the literature suggests that such models often prioritize short- term performance and efficiency, sometimes resulting in employee stress and reduced long-term workforce sustainability. Sustainable HRM has emerged as a response to this limitation, shifting HR priorities toward long-term human and social sustainability (Ehnert, 2009; Kramar, 2014).

  • Conceptual Foundations of SHRM

Sustainable HRM is based on the view that employees must be maintained and developed over time rather than consumed for immediate productivity. Ehnert (2009) emphasises the tension between economic performance and human sustainability, arguing that sustainable HR must manage this paradox. This is supported by the sustainable work systems approach, which highlights that organizations must build work environments that maintain employee health, learning, and adaptability (Docherty, Kira and Shani, 2009).

  • Employee Well-being and the Sustainability of Work

Employee well-being is a central theme in SHRM literature. Pfeffer (2018) argues that many organizations rely on high-pressure systems that harm employee mental and physical health. Such practices create hidden organizational costs, including absenteeism, turnover, and reduced productivity. SHRM therefore promotes supportive practices such as manageable workloads, wellness initiatives, and psychological safety to ensure sustainable performance.

  • Organizational Justice, Ethics, and Sustainable HR

Sustainable HRM emphasizes ethical employment and fairness. Organizational justice theory provides an important foundation, as employee perceptions of fairness influence trust, engagement, and long-term commitment. Greenberg (1987) identifies distributive, procedural, and interactional justice as key components of fairness. SHRM incorporates these principles through equitable pay, transparent processes, non-discriminatory recruitment, and credible grievance mechanisms.

  • Diversity, Equity, and Inclusion (DEI)

DEI is increasingly viewed as a sustainability imperative. SHRM literature suggests that inclusive workplaces enhance organizational legitimacy, innovation, and long-term workforce resilience. DEI strengthens belonging, reduces conflict, and improves retention, aligning with justice-based OB perspectives (Greenberg, 1987).

  • Learning, Development, and Employability

Learning and development are core elements of sustainable HRM. Docherty, Kira and Shani (2009) argue that sustainable work systems require continuous skill development to maintain employability and adaptability. This is increasingly important in labor markets shaped by automation and technological change.

  • Motivation and Engagement (OB Perspective)

Organizational Behaviour literature strengthens SHRM by explaining motivation mechanisms. Self-Determination Theory argues that motivation improves when employees experience autonomy, competence, and relatedness (Deci and Ryan, 2000).

SHRM aligns with this theory by encouraging meaningful work, empowerment, and development rather than fear-based performance systems.

  • Leadership Behaviour and Culture

Leadership is a critical factor in SHRM implementation. Transformational leadership supports vision, purpose, and innovation, while ethical leadership ensures fairness and trust. Bass and Riggio (2006) argue that transformational leaders influence employee engagement through inspiration and meaning. Schein (2010) emphasizes that leaders shape organizational culture by embedding values and behavioral norms.

3.G Change and Resistance

SHRM often requires cultural and system-level change. Lewin’s change framework suggests that sustainable change requires unfreezing old behaviours, implementing new practices, and refreezing them into culture. Burnes (2004) notes that resistance is natural and must be addressed through participation, communication, and leadership commitment.

  • Organizational Behaviour as a Sub-Topic within SHRM

Organizational Behaviour (OB) provides the behavioural and psychological foundation for understanding how SHRM works in practice. Since SHRM depends on employee acceptance, engagement, and cultural alignment, OB becomes an essential sub-topic.

  • OB Contributions to SHRM

OB strengthens SHRM through:

  • Motivation and engagement: explaining what sustains employee effort long- term
  • Organizational culture: shaping sustainable norms and shared values
  • Leadership behaviour: influencing trust, purpose, and ethical performance
  • Conflict management: supporting employee relations and psychological safety
  • Change management: reducing resistance and sustaining adoption

Thus, OB explains why SHRM policies may succeed or fail depending on human behavior and workplace dynamics.

  • Methodology
  • Research Design

This article adopts a qualitative conceptual research design supported by a case study approach. The objective is to explore how SHRM can be understood through OB concepts and applied to a sustainability-driven organization such as Tesla. Qualitative conceptual research is appropriate because it focuses on interpretation of theory, workplace systems, and organizational culture rather than statistical testing (Ehnert, 2009; Kramar, 2014).

  • Research Approach

A deductive approach is used, beginning with established SHRM and OB frameworks and applying them to interpret Tesla’s people strategy and organizational culture.

  • Data Collection

The study relies on secondary data, including peer-reviewed journal articles, books, and widely recognized HR and OB literature. Publicly available information on Tesla’s mission, workforce culture, and HR-related concerns is used to contextualize the case study.

  • Data Analysis

The study uses thematic content analysis, where SHRM dimensions (well-being, ethics, learning, DEI, leadership, culture, and employee relations) are used as analytical themes to interpret Tesla’s case.

  • Case Study Justification

Tesla is selected because it is globally associated with sustainability and innovation. It provides a relevant case to examine whether sustainability-oriented organizations also implement sustainability internally through workforce practices.

  • Limitations

The study is limited by its reliance on secondary data and does not include employee interviews or internal HR data. Therefore, findings represent a conceptual interpretation rather than direct measurement.

  • Case Study: Tesla and Sustainable HRM

Tesla is widely recognized for its contribution to environmental sustainability through electric vehicles and renewable energy innovations. However, Tesla’s workforce culture and HR practices provide a valuable case for evaluating sustainable HRM.

  • Sustainability Mission and Employee Motivation

Tesla’s mission, ‘to accelerate the world’s transition to sustainable energy’, creates a strong purpose-driven identity. OB research suggests that employees are more engaged when they perceive meaning and societal contribution in their work (Schein, 2010). Tesla’s mission therefore supports high employee motivation and commitment.

  • High-Performance Culture

Tesla is known for rapid innovation cycles, strong accountability, and intense performance expectations. Such cultures can enhance achievement motivation and speed but may also increase stress and burnout risk if employee well-being is not sufficiently protected (Pfeffer, 2018).

  • Strengths of Tesla’s People Strategy

From the SHRM perspective, Tesla demonstrates several strengths:

  • Recruitment of adaptive talent: selecting employees capable of innovation and rapid change
  • Learning through stretch assignments: accelerated development through challenging roles
  • Mission-driven engagement: motivation linked to sustainability purpose and innovation

These practices align with sustainable employability and long-term capability development (Docherty, Kira and Shani, 2009).

  • Challenges in Tesla’s Sustainable HRM

Tesla also illustrates SHRM challenges:

  • Work-life balance concerns: intense workloads can undermine long-term well- being
  • Employee relations and justice: sustainable HR requires trust, fairness, and strong voice mechanisms
  • DEI requirements: sustainable HR demands inclusive systems and organizational justice (Greenberg, 1987)
  • Discussion

The Tesla case demonstrates that sustainability-driven organizations can inspire employees through mission and innovation. However, SHRM requires sustainability to extend beyond products and corporate identity into the lived employee experience. Tesla

highlights a key SHRM paradox: high performance can drive innovation, but if not balanced with supportive people systems, it may result in burnout, turnover, and workforce depletion.

Sustainable HR therefore requires balancing:

  • Performance and well-being
  • Speed and psychological safety
  • Accountability and fairness
  • Innovation and inclusion

The literature supports that organizations must embed sustainable HR practices into culture through leadership commitment, justice-based policies, and long-term employability strategies (Ehnert, 2009; Pfeffer, 2018).

  • Conclusion

Sustainable Human Resource Management is increasingly essential for organizations seeking long-term resilience and legitimacy. SHRM integrates employee well-being, ethical labour practices, continuous development, and inclusive culture into HR systems. Organizational Behaviour strengthens SHRM by explaining the human and cultural factors that shape sustainable work systems, including motivation, leadership, organizational justice, and resistance to change.

Tesla demonstrates how a strong sustainability mission can generate engagement and innovation. However, it also shows that sustainability must apply internally through employee well-being, fairness, and inclusion. Ultimately, organizations that invest in sustainable HR build sustainable people systems in which employees can thrive, contribute, and grow over time.

References

Bass, B.M. and Riggio, R.E. (2006) Transformational leadership. 2nd edn. Mahwah, NJ: Lawrence Erlbaum Associates.

Burnes, B. (2004) ‘Kurt Lewin and the planned approach to change: A re-appraisal’,
Journal of Management Studies, 41(6), pp. 977–1002.

Deci, E.L. and Ryan, R.M. (2000) ‘The “what” and “why” of goal pursuits: Human needs and the self-determination of behavior’, Psychological Inquiry, 11(4), pp. 227–268.
Docherty, P., Kira, M. and Shani, A.B. (2009) Creating sustainable work systems: Developing social sustainability. London: Routledge.

Ehnert, I. (2009) Sustainable human resource management: A conceptual and exploratory analysis from a paradox perspective. Heidelberg: Springer.

Greenberg, J. (1987) ‘A taxonomy of organizational justice theories’, Academy of Management Review, 12(1), pp. 9–22.

Kramar, R. (2014) ‘Beyond strategic human resource management: Is sustainable human resource management the next approach?’, The International Journal of Human Resource Management, 25(8), pp. 1069–1089.

Pfeffer, J. (2018) Dying for a paycheck: How modern management harms employee health and company performance—and what we can do about it. New York: Harper Business.

Schein, E.H. (2010) Organizational culture and leadership. 4th edn. San Francisco: Jossey-Bass.