Can someone explain it to me? i dont understand what it does? does it only effect people in your party when you talk to them or what?

It has to do with combat.

Each side has a certain chance of acting first during each round of combat. Your reaction bonus gives you an improved chance of acting first. I think it's based on Dexterity.

oh sorry im talking about reaction ajustment. The thing that is based on your charisma. Does it ony have effect on your morale of your party members? or does it have some kind of effect on talking to characters in the game.