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Metaverse and Modification Needs of HRM Practices and Policies

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Metaverse and Modification Needs of HRM Practices and Policies

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farobi.afandi
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Metaverse and Modification Needs of Human

Resources Management Practices and Policies:


An Overview

Hasan Abdul Rozak1 , Olivia Fachrunnisa2(B) , Sugiharti1 , Taswan1 ,


and Ika Rosyada Fitriati1
1 STIE Totalwin, Semarang, Indonesia
{hasan,ikarosyadafitriati}@stietotalwin.ac.id, {sugiharti,
taswan}@unissula.ac.id
2 Department of Management, Faculty of Economics, UNISSULA, Semarang, Indonesia

[email protected]

Abstract. This study aims to develop a conceptual framework that explains the
modification needs in Human Resources Management Practices and Policies when
an organization uses the metaverse as an alternative to virtual offices. Recent dis-
cussions in the existing literature broadly conclude that hybrid work offers high
employee productivity, well-being, and mental health. However, not all types of
work can be done through the metaverse, while some work may be done using
the metaverse. Other discussions also offer the metaverse as a place for recre-
ation rather than work. Looking at reviews of current literature and interviews
with three senior leaders, we provide detailed insights and strategies for maxi-
mizing the metaverse as a virtual office through modifications to human resources
management (HRM) policies and practices that could be considered for imple-
mentation. Our finding shows that organizations need digital leadership and work
ethics to benefit from using the metaverse. In addition, the list of modifications in
HRM includes (a) the Gamification of HRM practices and policies, and (b) lev-
ering up readiness to change. The specific outcome to be targeted in this study is
understanding the future opportunities and challenges of employee management
in the workplace.

Keywords: Metaverse · virtual office · HRM Practices

1 Introduction: Metaverse as Future Workplace


In recent years, millennial workers are strong proponents in the idea of work flexibility
in the form of hybrid work, working from anywhere and that the delivery of work
can be done at any time. Metaverse is a collaborative universe that combines human
interaction with avatars and various products and services between the natural world and
the digital world without boundaries, where everything can take place simultaneously
and in parallel. Metaverse has great potential for people to be able to interact, work,
learn, and create. Of course it is not only intended for ‘gaming’ or the exchange of

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023


L. Barolli (Ed.): INCoS 2023, LNDECT 182, pp. 285–294, 2023.
https://doi.org/10.1007/978-3-031-40971-4_27
286 H. A. Rozak et al.

NFT (non-fungible tokens). NFT is a digital asset that describes the original object, it
is estimated that the development of this metaverse will take a long time and be carried
out in stages until 2024. The emergence of the metaverse was initiated by the founder
of Facebook, Mark Zuckerberg, who announced on October 29, 2021, that Facebook
would change its name to Meta and also make significant investments in developing the
Metaverse technology.
This Metaverse is a technology that is slightly different from Augmented Reality
and Virtual Reality. Park & Kim [1] stated that three things distinguish the Metaverse
from AR and VR, two technologies that appeared before the Metaverse. First, while
VR-related studies focus on physical and rendering approaches, Metaverse has a more
robust aspect as a service with more sustainable content and social meaning. Second,
Metaverse doesn’t have to use AR and VR technology. So, even if a platform does not
support VR and AR, it can still be a Metaverse application. Lastly, the Metaverse has a
scalable environment that can accommodate large numbers of people, which is critical to
amplifying the social meanings emphasized by this technology [2]. Based on Mozumder
[3], 43% of manufacturing companies revealed that VR will become mainstream in their
organizations in the next two to three years to develop infrastructure with artificial
intelligence techniques. For example, the use of metaverse in the work environment has
a significant impact on training and improving skills and the professional knowledge base
in the future, that educational games on computers and mobile have a major contribution
to improving cognitive and social skills. The existence of Metaverse which applies AR
and VR technology to provide interactive experiences in the study of abstract concepts
shows promising results in all fields. The integration between the Metaverse and also
Game based Learning is an innovation in the field of education which has a very positive
impact on the development of problem solving, cognitive skills, analysis, mathematical
thinking, communication, creativity and skill management [4]. Some of the benefits of
metaverse, firstly, in Metaverse there is Augmented Reality, which can be used to build
intelligent environments by utilizing location and network technology, so that activities
carried out remotely will later feel like meeting face to face, even if virtually. The
second is Lifelogging, which is a technology capable of capturing, storing and sharing
experiences, information, objects and data obtained while in the Metaverse [5].
Moreover, recent discussion related to technological advancement like the metaverse,
virtual, augmented reality and also artificial intelligence has become key drivers for
change in work characteristics, problem solving and the need for work competence.
Accordingly, we believe that in the future, organizations will need to prepare a work
office that is capable of fulfilling the physical need, hybrid and virtual environment
to maintain the stability of work productivity. We cannot go back to the previous era
where a routine work characteristic is that of a hierarchical and rigid work rhythm.
Mark Zuckerberg envisions a future working in a metaverse, with people teleporting as
holograms present in offices, eliminating the need to travel. This can be awkward as
this vision promotes the ‘feeling’ of being in the room together, having a sense of the
same space and making eye contact. However, the challenge is understanding as well as
demonstrating where virtual will make a difference. How much one can deal with the
anxiety, migraines, and nausea from virtual or hybrid offices remains to be resolved.
Metaverse and Modification Needs of HRM Practices and Policies 287

With this condition, the presence of a work space or an office in an organization


would not only be for completing work tasks. We must understand the presence of social
function in an organization, that is to increase the ‘human value’. The increase of human
value will happen when ‘human moments’ occur in a regular manner. Human value
can be understood as an awareness that humans have the obligation to always conduct
goodwill and pass on the goodwill to other creatures. Then, trust is built through private
interactions, lessons are acquired through the work environment, and strengthened along
with the maintenance of organizational culture that can only be shaped through physical
interactions or face-to-face friendship from organizational members. This is what we
normally refer to as ‘human moments’. Spirituality is an aspect of life as an integrated
system that clearly emphasizes the importance of its values and practices to seek blessings
and mercy.
A brief physical interaction with fellow work colleagues will surface ‘human
moments’ where it can result in empathy and high emotional attachment. The brains’
wellbeing will become even better when human moments occur routinely. As an exam-
ple, work meetings are important, however, ‘human moments’ invented by interpersonal
relationships are not only for collaboration purposes, but also to heighten camaraderie.
That is why organizations based on technology that support online activities still require
a work office. Or, if they do not have a physical office, face-to-face meetings that are
conducted regularly are needed. Several studies have shown that the frequency of per-
sonal interactions conducted face-to-face will increase commitment, support and col-
laboration between organizational members. Aside from that, information technology
and communication cannot replace the need for socialization that depends on long-term
interpersonal contacts.
Work from home policy and working without face-to-face contact within the long
term will impact the cognitive level of an individual. Human cognition does not depend
on signals in the communication process that is represented by information technology
applications, but environments where the signal is given but also impact. Through face-
to-face personal interaction, this will help increase an understanding of personality values
that other individuals have and this will strengthen the relationship. As such, essentially
we remain requiring direct contact with others to provide the chance to clarify and
harmonize hope, to refresh the rules and practice of work, and to build or revive trust.
In a world where it is possible to utilize work from home on a large scale, it is crucial to
reunite people at work to fulfil this human need.
Several studies have proven that hybrid work has a positive impact on productivity.
For example, working on the metaverse will accelerate successful digital transformation
in the workplace, and the metaverse will be used frequently in training and development
programs, deployments, and also in customer service areas. Moreover, if an organiza-
tion decides to solve every assignment online, then how would knowledge be shared?
This will prove a tedious task for various knowledge, if each and everything should be
conducted online. Not every organizational knowledge can explicitly be shared, some
knowledge characterized as critical and strategic can only be transferred in a face-to-
face situation. When various research and opinions state that metaverse is an alternative
virtual office that results in many benefits [6, 7], then what do organizations need to
prepare to respond to this phenomenon? This article aims to provide insight into what is
288 H. A. Rozak et al.

needed in designing the metaverse as a hybrid or virtual office so that factors such as the
productivity and mental health of each member of the organization are well maintained.

2 Research Methodology
To gain insights into these changes and how to prepare for them with spiritual values,
we conducted a survey of 7 (seven) literatures with the theme of the future of workplace,
metaverse as workplace, digital office, virtual office and essentials things toward human
centred in HRM policies for hybrid works.

3 Organizational Needs for Metaverse


3.1 Leadership
Results from various studies indicate that “ordinary” leadership or adopting the same
practice from a predecessor, will hinder the increase in capacity and productivity. Nowa-
days, leadership that is most effective in the digital era does not depend on their technical
expertise or a leaders’ ability to solve each and every problem. An effective leader is
knowledgeable on the human condition, possesses the courage to be vulnerable about
their own weakness/es, connected with other individuals and capable of optimizing their
potential and that of others.
Digital and global leadership is built upon three main components that are cultural
intelligence, digital mindset and digital competence. Cultural intelligence is an indi-
vidual’s capability to utilize logical capabilities and observation to interpret existing
situations and the ability to respond to an event in the correct behaviour, supported by
the presence of knowledge, motivation and also the strategy to create conducive envi-
ronments. When globalisation changes in environments’ characteristics, an individual
with cultural intelligence will assist their fellow members to live and work in an effective
manner within a variety of cultural differences. A good cultural intelligence will assist in
developing a diversity of leadership associated with good interpersonal skills. With good
interpersonal capabilities, it is easy for individuals to create relations, build relations,
so that several stakeholders feel very benefited. Cultural intelligence also demands the
trait in accepting difference and being open to cultural difference in order to become one
identity for the better direction. Today, the best fit for leadership in the digital age does
not rely on a leader’s technical expertise or ability to solve every problem. But how can
one know the human condition, dare to be vulnerable to one’s own weaknesses, connect
with other individuals and be able to optimize one’s own potential and the potential of
others.
While the digital mindset is a trait and behaviour conducted by an individual and
believes that digitalization creates efficiency and effectiveness so that productivity that
has been conducted increases. If a question is asked upon what must be built and devel-
oped in the era of digitalization, the answer will be the abundance mindset, the thinking
of possessing the spirit of open-mindedness, supporting individuals to be able to share
and open for opportunities of collaboration and behaving full of appreciation. Next, a
growth mindset or a thinking of continuing to develop. An individual with a growth
Metaverse and Modification Needs of HRM Practices and Policies 289

mindset will always find and study new things. The digital mindset will surely differ
from that of the conventional. This is because the digital mindset has innovation, out of
the box ideas, creativity and high focus on problem solving at its frontiers. Whilst digital
competence or an individuals’ capabilities in understanding and utilizing hardware and
software such as digital operation systems including internet networks, communication
tools et cetera.
Why does these three main components in digital and global leadership as a pillar for
software is important and require extensive resources to prepare? There are a few reasons:
first, digital transformation is about individual mindset changes, not just disruption and
the development of information technology. Secondly, God has created Earth to be
developed as a better living space. If technology makes human lives better, humans will
need to take its main role in order to create a better life. Third, individual humans are
part of a wider community that need to collaborate together to learn how to develop the
working world and business while also at the same time contributing to the betterment
of mankind. These reasons then become the deciding factor on why the role and style
of a leadership will determine the success of digital transformation and globalization.

3.2 Work Ethics


Some research results show that leadership that is ‘mediocre’ or adopts the same practices
as before, will hinder capacity building and productivity. Currently, the most effective
leaders in the digital era are not dependent on technical expertise and the ability of
leaders to answer all questions. An effective leader is about knowing human beings,
daring to admit one’s weaknesses, connected with other individuals and being able to
optimize one’s own potential and the potential of other individuals.
Leaders need to build digital ethics for spiritual engagement of employees. Due to
possible working relationships in the metaverse there are limitations to face-to-face inter-
action, Digital ethics can also be defined as moral principles and guiding behaviour within
research activities, business also utilizes digital technology [8] (Whiting, Rebecca and
Pritchard, 2019). Philosophically, digital ethics contains philosophical values on what
we need to know, what needs to be done, and what can be aspired from humankind.
Within this definition, the use of digital technology must align with these philosophical
questions [9]. Research on employee engagement to date still leaves room for further
study. Sun & Bunchapattanasakda [10] states that employee engagement includes not
only cognition, but also the flexible application of emotions and behaviour. Fachrunnisa,
Adhiatma and Tjahjono [11] concluded that employee engagement is how someone will
employ and express themselves physically, cognitively, and emotionally at work to com-
plete tasks. Cognitive aspects of employee engagement include employee beliefs about
the organization, its leaders, and working conditions. The emotional aspect includes
how employees feel about the organization and its leaders. While the physical aspect
includes the physical energy expended by employees in carrying out the duties of the
role they have in the organization. The last element, ‘working conditions’, will bring a
different condition if employees are connected through virtual offices such as metaverse,
especially for affective engagement.
We argue that the linkage between physical, cognitive, and emotional aspects in the
concept of engagement becomes a very large modality for social connection. These
290 H. A. Rozak et al.

aspects play an important role in influencing employees - especially their behavior


in the workplace, being the main determinant of behavior among employees. Digital
work ethics using the metaverse, we hope that employees will remain engaged with
organizational goals and values based.

4 Findings and Discussions: Modification of HRM Practices


and Policies
With regards to converting to hybrid work, we conclude that an organization needs to
modify some organizational practices and policies. These practices and policies cor-
respond to how an organization manages in human capital. The strategy that must be
carried out by leaders to maximize the metaverse in the work environment is as follows:
a. Encourage the productivity
The leaders or the top management team are able to relieve and ensure that each
member will contribute according to their competence or superior expertise. In addi-
tion, each individual must be aligned with the ideals of the organization, this is an
important aspect that needs to be considered by each individual to realize the opti-
mal point of contribution he has to his institution. When an organization has decided
to implement a hybrid working policy through virtual office media, the leader must
ensure productivity and results measurements must be met by every member of the
organization. Employees will be given the freedom to complete work on time. As
well as the resources available within the organization can be utilized.
b. Encourage the flexibility
Virtual flexibility in the office shapes work execution pattern so that the policy
of using the metaverse as a virtual office will work in harmony with work flexibility.
Work flexibility will be realized with certainty of work goals, adequate facilities and
work characteristics that can be completed from anywhere or work from anywhere.
Flexibility will create organizational members who work in different locations and
different time zones to manage joint decisions, so that the ease of work flexibility is
fulfilled by using the metaverse.
c. Encourage the connectivity
Communicating and socializing using information technology, this requires space
and work design that meets the requirements to achieve socialization needs. By using
the metaverse, leaders must ensure that workers can socialize with one another and
build emotional bonds using virtual media. Where this metaverse serves as a reference
in improving work as a ‘values space and learning space’, a place to increase the values
we have as human beings and also a place to continue learning to be a better self.
As a ‘value space’, the office provides a social space for its employees, facilitates
relationships and creates innovative collaborations.

4.1 HR Gamification
We argue that in the practice and policy of human resource management in a virtual office,
the gamification approach will be more appropriate to use. The gamification approach
is an approach in human resources management based on games or games supported
Metaverse and Modification Needs of HRM Practices and Policies 291

by the use of technology that exude relaxedness for employees and also increase their
competence to innovate and capability to reach organizational goals.
Gamification is an element of the game that has a fun concept in the workplace to
increase reaction and involvement with the subject matter [12]. An implementation of
this approach is aimed at employees to increase productivity and motivation in the work
environment. The elements of gamification are points, badges, leader boards, challenges,
and rewards. It can be used to determine learning outcomes. By challenging the trainees
to learn, they will provide the best effort during learning. By involving trainees in the
game, they may be more interested with the content, thus it increases their effort. Gam-
ification can also become a combinative touch of old implementations and new within
the organizational management, one of its examples is the old implementation of the
organization to provide information on employees’ ranking with the aim of directing and
correcting employees performance, alternatively new implementations can include gam-
ification whereby the organization can provide real-time access on the information of
employee performance within an organization. On the other side, it is widely regarded
that validation and rewards motivate employees to perform better in their workplace
[11]. We recommend that efforts to develop including gamification concepts can be in
the form of gamified training, gamify compensation, dan gamify performance appraisal
will help increase employee engagement.
Furthermore [13, 14] also mentions that gamification positively impacts work
engagement on employees who collaborate from separate workplaces. Gamification
can bring about an employees’ competitiveness as they will focus and participate in
conducting work. This can create increasing opportunities for work motivation, increase
participation and employee willingness to work even harder in completing their work
tasks. Within a company, gamification can be utilized in any field as the expected output
is an increase in employees’ attachment with their work and an implementation process
that is fun and interactive.
A gamification approach can trigger employees’ competitive spirit. This can gain a
positive result when conducted in a fair manner. This means that gamification can indi-
rectly assist as if they were playing a game. As an example, managers would like to give
feedback to employees using a leader board, employees can observe their own perfor-
mance according to a determined benchmark and in comparison with other employees.
From the many sources explaining gamification, it can be concluded that this approach
is capable of indirectly developing an employees’ competence and capabilities in a fun
way.

4.2 Lever up Change Culture


Within the organizational context, individual readiness for change is defined as the extent
to which individuals are prepared to participate in different organizational activities [15].
Individual readiness for change is perceived as a precursor for behavior and resistance,
or as a form of support for change that is carried out by an organization. Previous
research supports that individual readiness of an organization in conducting change is
the beginning of a successful change [16]. Aside from that the element of target from
change places people as the central element, outside of factors such as methods, social,
organization and goals. Nevertheless, two crucial aspects that require further research in
292 H. A. Rozak et al.

increasing employee behavior include employees’ internal-external (people) aspect and


technology/work method (methods) [17].
A study conducted by [18] states that individual readiness to face change will become
a driving force for carrying out change that bear positive results. One of the advantages
of individual readiness in facing change is the increase in performance, the better an
individual is prepared to face change, the better their performance. Other contemporary
research on the variable of individual readiness to change explains that the readiness
of an individual for change in reality can be identified through positive behaviors of an
individual towards change, will the method and work procedure be felt by individuals
support change, the perception of members of the organization as a whole to face change,
and the confidence for individuals to face change. Individual traits in facing change can
be seen from their response towards change, do they accept or reject change. Individual
readiness for change can impact the mindset, feeling, and awareness of an individual
mirrored in their behavior and attitude. The same research conducted by [19] achieves a
similar result whereby individual readiness for change possesses a positive relationship
with behaviors that support change.
In preparing the metaverse as an alternative to hybrid work, a collection of HRM
practices must be set to encourage individuals to have a high level of readiness, in various
situations and conditions that will trigger changes with a high spiritual level. Therefore,
to prepare for the metaverse as a hybrid work alternative, a set of HRM practices and
organizational situations must be set to encourage individuals to have a high level of

Fig. 1. HRM Practice and Policies Modification for using Metaverse


Metaverse and Modification Needs of HRM Practices and Policies 293

readiness, in a variety of situations and conditions that will trigger change. The summary
of our research findings can be illustrated graphically in Fig. 1.

5 Conclusion
Insights about the importance of building a metaverse as a virtual medium in the work-
place and providing several strategies are key and conditions given the volatility of world
jobs, this cannot guarantee that the prerequisite conditions offered will remain the same
for the next 5–10 years. It can be concluded that the implementation of the metaverse has
a huge opportunity to be able to support the work implementation process even better.
The current development of the metaverse has entered a new chapter with innovations
and breakthroughs created by researchers to help the current work environment. The
benefit of artificial intelligence will help us process information so that we receive the
final results of robots that are easy to control via computers and also the internet. It also
can help the physical limitations that cannot be achieved by ordinary humans. With these
facilities a new work environment is created and also become an interesting experience.
Advances in the development of the virtual world can replace the nature and style of
leadership, and robots and machines can replace all human work, therefore engagement
values in term physical, cognitive and emotional are also important in the virtual world
to maintain social meaning. That goes on as a basic fundamental value to catalyse any
changes that occur in the organization. Therefore, further research is needed to include
how to select talent and prepare future leaders to be more agile, adaptive and empathetic
to the needs of humans in the environment.

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