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Human Resources Management Glossary: Key Terms HR Pros Should Know

Jennifer Post
Jennifer Post Contributing Writer
Updated Jan 23, 2023

These are the key terms you need to know to understand human resources management.

Human resources management, or HR management, is a vital component of all midsize and large companies as well as some small businesses. The HR department handles employee benefits, training, discipline and other tasks that directly concern the company’s employees. An HR manager needs a number of skills in order to run an efficient, organized HR department. These skills include leadership, organization, multitasking and knowledge of professional development.

These are the key terms that every HR professional should know.

Employment law

Employment law is a set of laws that affect workplace conduct and fair practices. Types of laws for employment issues include affirmative action, discrimination and employee benefits.


Retention is the process of keeping skilled, successful employees at your company. Retention efforts can succeed with perks and benefits for employees, including vacation time, sick leave and recognition programs.

Competency assessment

A competency assessment is the measure of an individual employee’s performance based on your company’s criteria for standard performance.

Employee development (human resources development)

Employee development, or HR development, is the education and training of new employees. It can also refer to employees’ continued education or retraining.

Performance review

A performance review is a written evaluation of how well an employee has performed in the specified time period. This is given to the employee for them to use as a learning tool in areas where they may need to improve.

Succession planning

Succession planning is a way top executives are evaluated by senior management to help them determine their strengths and weaknesses. This helps to prepare backup options for senior officials in the company.

Data protection laws

Since there is no federal law regulating how personal information is collected and used, there are laws on the subject for different areas and how companies must handle that information. The law differs from state to state, so it’s important to check how HR departments in your state are legally required to handle employees’ personal information.

Nonexempt employees

These employees are entitled to the minimum hourly wage for every hour they work, plus overtime pay for every hour they work over the standard 40 hours in a week. This type of employee is categorized and regulated by the Fair Labor Standards Act. Exempt employees are not part of this protected group, so your company is not required to pay them minimum wage. [Read related article: Defining Exempt vs. Nonexempt Employees]

Intellectual property

The responsibility of protecting intellectual property (IP) falls on everyone within a company, but HR managers play a crucial role. It’s their job to impose policies regarding the use of company computers, company email, company-provided internet, etc. Any communication system that could contain proprietary information is a potential security risk, and HR departments should include language in their policies or employee handbooks to protect that information.


When a new employee is hired, they have to do and learn a lot before officially starting their new position. HR lays out these tasks, gives them a breakdown of the company’s service or product and the tools they will use on the job, takes them on an office tour, introduces them to co-workers, etc. Basically, anything that the new employee will need to know in order to do their job should be included in the onboarding checklist.

Resource management

The words basically state the meaning. Resource management is the managing (planning, scheduling, allocating) of company resources to be as efficient as possible. These resources can include the skill sets of employees, which is the most closely related to HR.


HR analytics is another aspect of assessing and maximizing employee performance, but it is also used to track employee turnover rate, determine who is likely to leave the company within a certain period of time, measure employee capabilities, and assess the company culture and leadership. Once those issues are diagnosed through data, the company can work on rectifying them.


Simply put, compensation is a form or payment (usually money) given to someone who has suffered an injury or some kind of loss.

Performance appraisal

This is another term for an employee review – a way for the company to assess and track an employee’s performance and progress. Sometimes performance appraisals result in raises, but if they are not positive appraisals, they can result in termination of employment, disciplinary action or more supervision.


Paid or personal time off is a policy that allows employees to take off a certain number of days from work for whatever reason they choose. It is different from sick time in that the employee does not have to be ill to take a PTO day. The number of days will varies by company, as it is fully at the business’s discretion.

Workers’ compensation

Workers’ compensation is a form of insurance that an employer has in case an employee needs wage replacement and/or medical benefits for an injury they sustained during their employment with the company. If an employee uses this insurance, they no longer have the right to sue the employer. Workers’ compensation does not cover general pain and suffering or punitive damages for employer negligence.

Terri Deno contributed to the writing in this article.

Image Credit: Ivanko80/Shutterstock
Jennifer Post
Jennifer Post Contributing Writer
Jennifer Post is a professional writer with published works focusing on small business topics including marketing, financing, and how-to guides. She has also published articles on business formation, business software, public relations and human resources. Her work has also appeared in Fundera and The Motley Fool.