Human resources (HR) management is a vital component of any business that has employees. Your HR department (or whoever manages your HR functions) may handle employee recruitment and onboarding, time and attendance, benefits administration, payroll, performance management, training and development, legal compliance, disciplinary action and other tasks that directly involve your employees.
HR professionals need a number of skills to be effective at their jobs. For example, they should be skilled in leadership, organization, communication, multitasking and training and development. They should also be familiar with common HR management terms.
Human resources management key terms
To understand human resources management and ensure their company is fulfilling its HR responsibilities, business owners and HR professionals should make sure they know the following key words and phrases.
HR analytics provide you with a wealth of employee data that can be used to make strategic business decisions. For example, analytics can help you maximize employee performance, track employee turnover rate, determine who is likely to leave the company within a certain period of time, measure employee capabilities and assess company culture and leadership. Once those issues are diagnosed through data and analytics, the HR team can work on rectifying them.
The term compensation can have multiple meanings. It is often used to describe payment given to an employee. While compensation typically means money, total compensation often refers to an employee’s salary plus other monetized benefits, such as health insurance and paid time off (PTO).
Additionally, compensation can be a form of payment (usually money) given to someone who has suffered an injury or some kind of loss.
A competency assessment is the measure of an individual employee’s performance based on your company’s criteria for standard performance.
Data protection laws
Since there is no federal law regulating how personal information is collected and used, state laws govern how companies must handle such data. These regulations vary across the country, so it’s crucial to check how HR departments in your state are legally required to manage employees’ personal information.
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.
Employment law is a set of legislation that governs workplace conduct and fair practices. There are laws regulating affirmative action, workplace discrimination and employee benefits.
HCM, HRIS, HRMS
HR-focused software solutions include human capital management (HCM), HR information systems (HRIS) and HR management systems (HRMS). HCM, HRIS and HRMS are all similar types of software that help HR managers perform their duties.
Most companies should utilize HR-related programs to manage human resources processes, but the best HR software for your business will depend on your organization’s specific needs.
The responsibility of protecting intellectual property (IP) falls on everyone within a company, but HR managers play a critical role. It’s their job to impose policies regarding the use of company computers, company email, company-provided internet and more. Any communication system that could contain proprietary information is a potential security risk, and HR departments should include language in their usage policies or employee handbooks to protect that sensitive information.
Employees can be classified as exempt or nonexempt. Nonexempt 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.
When a new employee is hired, they usually have to do and learn a lot before officially starting their new position — this is considered the onboarding process. HR leaders typically lay out the required paperwork and tasks, including giving the new hire a breakdown of the company’s services and the tools they will use on the job, taking them on an office tour and introducing them to co-workers. Anything that the new employee needs to know to fulfill their role should be included in the onboarding experience.
Paid or personal time off (PTO) 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 vary by company, as how many to grant is entirely at the business’s discretion.
The words state the meaning: Resource management is the managing — planning, scheduling and allocating — of company resources to be as efficient as possible. These resources can include the skill sets of employees, which is the resource most closely related to HR.
Retention is the process of keeping skilled, successful employees at your company. Retention efforts can involve offering perks and benefits for employees, including vacation time, sick leave and employee recognition programs.
This is another term for an employee review — a way for a 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 lead to termination of employment, disciplinary action or close supervision.
A performance review is a written evaluation of how well an employee has performed in a specified time period. The assessment is given to the employee to use as a learning tool in areas where they may need to improve.
Succession planning is the process of identifying and developing future leaders in your organization. It is essentially a personnel replacement planning process that helps prepare employees for when business leaders leave the company.
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. However, workers’ compensation does not cover general pain and suffering or punitive damages for employer negligence. [Read related article: How Much Workers’ Comp Insurance Do You Need?]
While most businesses with employees are required to have workers’ compensation insurance, there are a few workers’ comp exemptions.
Buzzy HR terms to know
Recent global events, including the COVID-19 pandemic and economic turmoil, have had a major impact on the world of HR, leading to the creation and usage of additional HR-related words. Here are the buzzworthy terms you should know.
DEI and D&I
DEI stands for diversity, equity and inclusion, while D&I stands for diversity and inclusion. Both terms are used to describe the implementation of a workplace culture where employees of all different backgrounds, such as race, gender, culture, social class and life experiences, are represented and feel respected, valued and supported.
This refers to an employee’s overall impression of their workplace, including their interactions and experiences with their role, teammates, manager and the business at large. Company culture, benefits and leadership are all integral parts of an employee’s experience.
This is another term for an independent contractor or freelancer. [Find out when to hire a full-time employee versus a contractor.]
Hybrid work is the ability for an employee to split up their workweek between working in the office and working remotely.
Hybrid work is a more popular work arrangement than in-office and fully remote work. When given the option, 87 percent of employees choose to work such a flexible schedule, according to McKinsey.
When employers face an economic downturn and struggle with cash flow, one effective way to cut costs is to lay off employees. However, some employers choose to labor hoard instead, which means they hang on to their employees when it would otherwise make sense to conduct layoffs.
Popularized in 2022, quiet quitting is the act of employees doing their assigned job responsibilities but no more and no less. Many employers view quiet quitting in a negative light; however, some employees say it is an attempt to reclaim work-life balance.
The pandemic may have forced several businesses to transition to remote work, but now many employers are insisting their employees come back to work in the office. This process of bringing workers back to the office is known as return-to-office or RTO for short.
When an employee leaves a company, it can start a chain reaction. This domino effect, called turnover contagion, refers to the growing impact of more and more workers quitting, fueling a seemingly endless run of staff departures in a short period of time.
This is the implicit bias someone has against certain groups of people. Outside their own conscious awareness, people form biases against people based on stereotypes and experiences, which can influence business decisions. Among HR professionals and other business leaders, unconscious bias can affect hiring and recruitment, company culture and retention.
Proximity bias is another type of bias that can impact your business.
WFH, which stands for “work from home,” is the term used when an employee is allowed to work remotely. Although the phrase uses the word “home,” it encompasses all work done outside the physical office. For example, a person permitted to work from home may work out of a coffee shop instead. The term is interchangeable with “remote work.”
Zoom fatigue, named after the popular video conferencing software Zoom, is used to describe the feeling of exhaustion, worry or burnout associated with the constant use of video communication platforms.
Jennifer Post and Terri Deno contributed to this article.