Modeling the Functional Performance Outcomes of Green HRM: The Mediating Role of Green Innovation and Transformational Leadership

Introduction
Human capital is increasingly recognized not merely as a cost, but as a strategic asset pivotal for gaining a competitive advantage. In the contemporary economic landscape, this focus on human potential has converged with the urgent global mandate for sustainability, compelling organizations to embrace the “Green Economy.” Within this paradigm, Green Human Resource Management (GHRM) has emerged as a vital framework, systematically integrating eco-friendly practices into core HR functions—such as recruitment, development, and compensation—to foster long-term sustainable growth. Theoretical discourse suggests that GHRM enhances organizational performance by stimulating Green Innovation (GI) and empowering Green Transformational Leadership (GTL). These factors act as essential catalysts, translating human capital into superior environmental and financial outcomes. Leaders who adopt a “green” transformational approach inspire employees to pursue environmental goals, while innovative processes enable organizations to address ecological challenges efficiently. Despite this growing academic interest, there remains a critical gap in empirical evidence regarding the application of these concepts within emerging economies—particularly in regions like Basra, Iraq. Facing severe environmental degradation, climate change, and resource constraints, organizations in Basra are under mounting pressure to adapt. Addressing this contextual gap, this study investigates the impact of GHRM on organizational performance, specifically examining the mediating roles of GI and GTL from the perspective of employees within the Basra Governorate. By synthesizing these elements, this research illuminates how organizations can leverage sustainable HR strategies to navigate the complexities of environmental stewardship while simultaneously driving performance excellence in challenging institutional environments.
 
Methodology
This research is quantitative in nature, applied in purpose, and descriptive-correlational in design. It is a cross-sectional study. The statistical population consisted of 1,600 managers, supervisors, and employees across various departments of the Basra Governorate. Using random sampling and Cochran's formula, a sample of 310 individuals was selected. Data were collected using questionnaires on GHRM practices by Mousa and Othman (2020), green innovation by Wang et al. (2021), green transformational leadership by Singh et al. (2020), and organizational performance by Kim (2004). The face and content validity of the questionnaires were confirmed by experts in the field, and convergent and discriminant validity were assessed using confirmatory factor analysis. The reliability of the questionnaires, measured using Cronbach's alpha, was found to be above 0.7 for all research variables. Data analysis was conducted using structural equation modeling (SEM) with Smart PLS 4.0 software.
 
Findings
The findings revealed a significant relationship between GHRM practices and organizational performance (T=2.014, P=0.044), green innovation (T=17.51, P<0.05), and green transformational leadership (T=13.57, P<0.05). However, no significant relationship was found between green transformational leadership (T=0.03, P=0.976) and green innovation (T=0.44, P=0.654) with organizational performance (P<0.05). Additionally, GHRM practices did not significantly impact organizational performance through the mediating role of green transformational leadership (P<0.05). Similarly, GHRM practices did not significantly affect organizational performance through the mediating role of green innovation (P<0.05).
 
Discussion and Conclusion
This study underscores the pivotal role of Green Human Resource Management (GHRM) in fostering environmentally conscious organizations. Our findings consistently validate that GHRM practices act as a primary driver for organizational performance, aligning with established literature by enhancing employee motivation, retention, and corporate social responsibility. Furthermore, the research confirms that GHRM significantly stimulates Green Innovation (GI) and facilitates Green Transformational Leadership (GTL), supporting the resource-based view that GHRM is essential for building the human capital required for environmental advancement. However, our results diverge regarding the direct impact of GI and GTL on broader organizational performance. Unlike prior literature—which often analyzes performance at the aggregate organizational level—this study adopted a specific unit-level analysis. We speculate that this shift in scope, combined with a focus on general performance metrics rather than strictly sustainability-specific outcomes, accounts for the lack of significant direct paths and the subsequent rejection of our mediation hypotheses. This highlights that sustainability impacts are highly contingent upon the scale of analysis and organizational context. Despite these findings, the practical implications remain compelling. To achieve sustainable excellence, managers must treat GHRM not as an isolated function but as a cornerstone of corporate strategy. Organizations are encouraged to embed green values into recruitment and talent acquisition, provide targeted sustainability training, and empower employees through green ideation workshops. By fostering a collaborative culture that incentivizes sustainable initiatives and provides autonomy for green innovation, companies can create a self-reinforcing cycle of engagement. Ultimately, while the mediation hypotheses were not supported in this specific context, GHRM remains a fundamental engine for aligning organizational practices with environmental stewardship, paving the way for both long-term resilience and enhanced societal value.