Human resources relates to the people who work in a business organisation. The performance of a business is affected by the quality and impact of the people who work for it.

Human resources covers:

• managers
• employees

Managers

Managers can influence a business through:

• decision-making - Good decision-making can increase productivity, increase profits and grow the business. Poor decisions could result in employees losing motivation, production being disrupted and complaints from customers.
• creating policy - Managers create policies that aim to motivate employees and set realistic goals.
• hiring and firing of employees - Managers recruit new staff and let others go
• setting budgets - managers will decide how much money a business can spend within a specific period.
• conducting appraisals with staff - Managers need to assess their staff to ensure they are working effectively.

Employees

Employees can influence a business through their:

• productivity
• ability to satisfy customers
• absenteeism
• ability to perform their job/skill set
• training
• industrial action
• motivation
• availability

Each of these areas of influence can impact positively or negatively on a business.

Employees are the public face of a business. Badly performing employees will result in inferior products being produced and a poor service being offered to customers.

The short and long term impact of badly performing employees will have a negative effect on sales and the reputation of the business.