Human Relations and Their Importance in Business


Human relations are part of the human resource management process but it is more focused on the well-being of the employees for better performance. Human relations involve employee training, developing a culture, addressing employee needs, and resolving conflict in the workplace. Understanding the importance of creating and maintaining good human relations can help the business attain competitiveness and long-term economic stability. The human relations process is critical for the business in terms of motivation, productivity, retention, organizational culture, and collaboration among other things. Effective human relations benefit the business with employee retention and loyalty, productivity, collaboration, and creativity among others.

Increased Productivity

The productivity of employees is significantly influenced by the treatment they receive in an organization. A positive relationship between the employees and the management encourages employees to be more committed to their work (Das & Acharjya, 2021). Effective management develops and maintains a positive organizational culture. Good culture for the employee is that which cares for their well-being from the business and personal perspective. Consequently, employees feel more wanted, recognized, and appreciated and in return, they please the firm by being more productive.

Company policies could contribute to employee productivity either positively or negatively. While some firms foster policies that prevent workers from creating personal relations, others accept the development of such relations. According to Das and Acharjya (2021), when a supportive and respectful relationship exists between employees and the management, a positive effect on productivity is guaranteed. Furthermore, positive relations in the workplace are a motivation for employees to work towards the organizational goal. Therefore, goal-oriented firms should foster policies that allow the creation of healthy relationships between employees and management.

Increased productivity is an advantage for both employees and the business. The organization benefits from an improved level of sales and increased revenues (Das & Acharjya, 2021). The business also gets a competitive advantage against its rivals. The general image of the business is essentially shaped by high productivity given by the employees (Das & Acharjya, 2021). Employees also enjoy increased compensation and other benefits in appreciation of their hard work. In other words, the whole business fraternity is positively affected by practicing good human relations.

Employees Retention and Job Satisfaction

Employees who are satisfied with their operations in a business tend to stay longer than the unsatisfied. When employees have a feeling of sufficiently contributing to the growth of a business, they are more satisfied and likely to remain in the organization (Das & Acharjya, 2021). Employee retention is a broad aspect that is fully tied to job satisfaction in any organization. Employee retention is defined as the ability of a company to prevent workers from turning over their jobs in a specific period either involuntary or voluntary. According to Das and Acharjya (2021), increased employee retention has a direct effect on business success and performance. Therefore, businesses that focus on positive human relations have higher employee retention.

Employee satisfaction is not only based on employees’ contribution to the business but also their recognition in an institution. Workers expect an organization to recognize their presence, opinions, and general contribution towards the growth of a business (Das and Acharjya, 2021). Institutions that have little to no regard for employees are likely to register a higher rate of employee turnover. On the contrary, businesses that have a high retention of employees cut down the cost of hiring and training new employees. Therefore, it is for the benefit of the organization to keep employees happy and satisfied.

Good Culture and Customer Engagement

A positive organizational culture motivates employees to appropriately engage with customers. Organizational culture involves a combination of values, practices, and expectations that inform and guide the operations of team members. A positive culture gives an institution a competitive advantage (John-Eke & Akintokunbo, 2021).

An institution that fosters positive values, clear expectations, and ethical practices has a good reputation. A good organizational culture promotes good communication between employees and the management. It also advocates career growth, a culture of collaboration, a reward system, and core values, and a strong purpose (John-Eke & Akintokunbo, 2021). Such a culture also provides a good working environment for all employees.

Employees working in a positive working environment will show a good attitude towards customers. Frustrated employees tend to direct their anguish towards their customers;an action which leads to low customer retention. A friendly working environment gives employees peace, a positive attitude, and behaviors (John-Eke & Akintokunbo, 2021). Happy workers happily attend to customers and create a positive image for the business. Customers return where their value is shown so if the employees attending to them are happy, they are will come back. Customers also want to be involved with a business with employee-friendly practices. Increased customer retention as a result of good relations between employees and customers means increased sales and profits for the organization.

Employee Motivation and Creativity

Effective human relations motivate employees while fostering their creativity. Positive workplace relations are a major source of employee motivation and are critical to productivity (John-Eke & Akintokunbo, 2021). Workers feel motivated to go to work every day if they feel wanted in an organization. Motivation also helps employees to achieve institutional and personal goals. The least motivated employees have little motivation to achieve their own goals. Therefore, maintaining good human relations also helps employees to attain self-accomplishment.

The modern organizational market requires the constant application of creativity in business operations. The integration of business with technology demands creativity amongst employees for sustainable practices (Petryni, 2019). Creative employees introduce innovative projects to the business and attain a competitive advantage.

With changing customer needs, today’s business environment rewards organizations that quickly and creatively meet such needs. The ability of employees to come up with new ideas to solve changing customer needs is based on their working environment (Petryni, 2019). Businesses that allow employees to communicate and share ideas with their colleagues record success. However, in the absence of workplace relations, employees cannot develop and share solutions needed by the business for success.

Improved Collaboration

Constructive human relations encourage teamwork and sharing of ideas between the workers and management. Workplaces with well-developed relations also have the most cooperative employees (Petryni, 2019). Such relationships allow employees to speak up their minds by contributing effective ideas for business growth. The employees find it easy to work closely with other employees towards the organizational goal. An institution that encourages positive relations has a good relationship with the workers (Petryni, 2019).

A good management-employee relationship encourages openness among employees. Employees can talk about their issues to the management system without fear. Consequently, the workers cannot plot against the organization without the management’s knowledge.

Effective human relations also help an institution to properly resolve disputes between employees and the management. A good organizational culture has a dispute resolution system that encourages solving problems amicably (Petryni, 2019). Disputes amongst employees can affect the general productivity of a business. Thus, if they are solved reasonably and without taking sides, employees can work in peace and produce more. Furthermore, amicably solving disputes between employees encourages openness in the business.

Organizational Loyalty

Good human relations in the workplace influences employees’ loyalty to the business. Healthy relationships in the organization build trust amongst the employees, management, and the general institution (Petryni, 2019). Employees from firms that treasure them protect and fight for their image in the outside world. The management also has increased chances of listening to employee complaints in a good human relations setting. The organization also offers the employees opportunities to advance their skills through learning and training (Petryni, 2019).

Furthermore, better understanding between employees and employer promotes loyalty and employee retention. Employees want to feel proud of their working institution as a way of showing loyalty. Such employees protect organizational secrets, means of success, and flaws from their enemy.


Positive human relations are important for the general well-being of an organization. Employees are a key determinant of a business failure or success thus need better treatment. The relationship between employer and employee is depicted in organizational practices. Companies with a positive culture motivate employees by allowing them to work towards their personal growth.

Good communication, core values, collaboration, and a reward system are among other elements of good workplace culture. Effective human relations provide employee satisfaction and retention. Businesses with high employee retention enjoy employee loyalty and increased productivity. Other than success for the business, human relations earns the business employee loyalty, collaboration, creativity, and customer engagement among others.


Das, S., & Acharjya, B. (2021). Understanding organizational effectiveness through sustainable human relations approach: The role of empowerment climate in selected industrial establishments. International Journal of System Dynamics Applications, 10(2), 33-52. Web.

John-Eke, E. C., & Akintokunbo, O. O. (2021). The alignment of employee engagement with human relations school of thought. American Journal of Humanities and Social Sciences Research, 5(9), 99-106. Web.

Petryni, M. (2019). The importance of human relations in the workplace. Small Business. Web.

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