The Effects of HR Decisions

Running a business is a complex process and HR decisions play a massive part in keeping the company successfully up and running. The topics discussed on the previous blog posts are a portion of the small moving parts the HR department takes care of.

The role of HR department

The HR department often acts as a representative of the company as well as the employee. They take care of the relationship between these two parties from recruitment to exit management.

If HR decisions are not made carefully the company can lose a lot of money. Some of the reasons include but are not limited to;

  • Failure to recognize the need for recruitment
  • Failure in choosing the right candidates or employees
  • Failure in providing the right kind of training
  • Failure to obey and enforce labor laws
  • Failure to support workplace equality in all aspects of the business
  • Failure to conduct disciplinary procedures and inform employees about disciplinary guidelines
  • Failure to provide needed development plan and conduct the right procedures to develop company’s employees
  • Failure to design and provide a motivating and fair reward structure
  • Failure to take care of employees well-being and safety
  • Failure to manage performance of the company and its employees
  • Failure to motivate and create engaged employees
  • Failure to create a sufficient exit management system

All these issues can cause a loss profit in various ways. These factors are directly and indirectly linked to company operations, employee productivity and monetary value.


Unhappy employees lead to decreased productivity, bad results and even lawsuits

It is important to take care of your employees physically and mentally as well as providing them a safe, motivating and encouraging environment to work in. Having a good relationships with labor unions, and respecting labor laws and general employee rights is crucial in avoiding lawsuits.

Unhappy customers lead to bad reputation and decrease in sales

Even though HR strongly focuses on the interpersonal relations within the company, they play a big part in customer satisfaction. HR department is in charge of recruiting and hiring the right employees to represent the company. Their actions determine, if the environment where employees work can be transferred a customer-friendly space to do business in.

Poorly conducted company procedures and operations lead to poor performance, unhappy employees and unhappy customers

If a company fails to create code of conduct and numerous other guidelines in which they run their business in, the effects trickle down to all aspects of company operations. Each company needs to tailor their processes to their own needs, analyze the market they’re in and adjust it. Having good HR guidelines provides a great base to build a successful and sustainable business on.

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