A Cost-Benefit Analysis of Sustainable Human Resource Management Practices: Evaluating the Impact on HRM Effectiveness and Organizational Performance

Muhammed Zakir Hossain, Farhana Haque Purnima and Farin Sohana
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Muhammed Zakir Hossain: Associate Professor, Department of Business Studies, State University of Bangladesh, Bangladesh
Farhana Haque Purnima: Lecturer, Department of Business Studies, State University of Bangladesh, Dhaka, Bangladesh
Farin Sohana: Lecturer, Department of Business Studies, State University of Bangladesh, Dhaka, Bangladesh

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Abstract: This study examines the cost-benefit analysis of sustainable Human Resource Management (HRM) practices and their influence on organizational HRM effectiveness. The study seeks to evaluate the costs and benefits of adopting sustainable HRM practices, including employee development, equitable compensation, and green HRM while assessing their financial feasibility through accounting methodologies such as Human Resource Accounting (HRA) and Cost-Benefit Analysis (CBA). Data was gathered via a structured survey from 100 participants across diverse sectors in Bangladesh. The results indicate that sustainable HRM practices, especially employee development and equitable compensation, enhance HRM effectiveness, leading organizations to observe increases in employee productivity, morale, and retention. The cost-benefit ratio analysis indicates that the advantages of implementing these practices surpass the related costs, affirming their financial viability. The research indicates that accounting methodologies, including HRA and CBA, significantly influence the assessment of the financial implications of HRM practices despite their inconsistent implementation among organizations. This research enhances the existing knowledge on sustainable HRM by presenting a detailed framework for assessing the costs and benefits of these practices, thereby equipping organizations with essential insights to optimize their HR investments.

Keywords: Fair Compensation; Organizational Performance; Green HRM; Employee Development; HRM Effectiveness; Human Resource Accounting (HRA); Cost-Benefit Analysis (CBA); Sustainable HRM (search for similar items in EconPapers)
Date: 2025-05-01
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Published in European Journal of Management, Economics and Business, 2025, 2 (3), pp.49-63. ⟨10.59324/ejmeb.2025.2(3).05⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05736685

DOI: 10.59324/ejmeb.2025.2(3).05

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