Institutional and stakeholder pressures on organisational performance and green human resources management

Abstract Green human resource management (GHRM) has recently received increasing attention from scholars and practitioners. In addition to environmental management systems, the circular economy has become a primary strategy for tackling environmental issues. Other studies have suggested that more research is required to identify the drivers of GHRM and explore how it is related to performance outcomes. In this study, we aim to investigate the effects of both institutional and stakeholder pressure on environmental and circular economy, economic performance, and environmental reputation of organisations. We also test the mediating roles of performance outcomes on GHRM adoption. Based on data collected from European environmentally certified organisations, we found that both institutional and stakeholder pressures are positively related to organisational performance and GHRM adoption. Performance outcomes also have a positive relationship with GHRM practices. However, our findings also highlight the risk that GHRM can become an elitist practice in high‐performing organisations.