HR (Human Resources) can be defined in many ways but in the context of business, we can say that HR is the strategic and effective management of your most profitable resource: people.

A strategy is a careful plan or method that is put in place to ensure success and maximum results! To be strategic, your HR policy must be aligned with your business strategy. So you need to understand your business objectives and consider the impact that these have on your employees.

The role of HR has traditionally been supportive, i.e. to carry out payroll and administration functions and to uphold positive employee relations. Nowadays, HR personnel have expanded their role to include:

Legal compliance - ensuring the business meets legal requirements e.g. employment law, health and safety.

Transaction activities - i.e. dealing with financial matters such as pay and benefits

Transformation activities - i.e. introducing changes that make for a good working culture e.g. induction, training.

Measurement - putting in place systems that show a tangible return on investing in people.

The role of the HR is also to demonstrate to their business why their employees are the most profitable resource they have. For example, employees:

* Represent your business
* Bring knowledge, skills and experience to your business which are intangible but are also priceless
* Create customer satisfaction

Talented employees guarantee competitive success, and competitive success secures a growth in profits.

Whilst these principles apply to all businesses, it is essential that each business identifies its own specific HR measures to monitor the impact of employees - and indeed, employee policies. A good HR policy will:

* Minimise the costs associated with high employee turnover
* Improve retention of skills, knowledge, motivation and morale, which in time impact productivity
* Give employees job security and money in their pockets
* Give employees opportunities - to learn new skills and gain more knowledge

Employees are a significant part of your competitive advantage - they can make or break your business in the way that they interact with your customers, consumers and the general public.

Employees are also your business' reputation.