Human Resources Management Glossary: Key Terms HR Pros Should Know

HR management key terms

To understand HR management and ensure their company is fulfilling its HR responsibilities, business owners and HR professionals should make sure they know the following keywords and phrases.

Compensation

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.

Competency assessment

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 required legally to manage employees’ personal information.

Emotional Intelligence (EQ) 

EQ is a person’s ability to understand and manage their own emotions as well as understand the emotions of people around them. High emotional intelligence can be a key ingredient to successful communication and is something most employers and hiring managers look for when recruiting new candidates. 

“[Emotional intelligence] is essentially being emotionally aware of yourself and others, which can help in terms of difficult conversations in the workplace,” said Jennifer Preston, HR consultant at Flex HR.

Employee development (HR development)

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

Employee experience

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.

“A positive employee experience means more happy, more productive employees,” said Kleeman. “If you want to keep your team motivated and engaged, you need to focus on the day-to-day experiences of your business.”

Employee value proposition (EVP)

The EVP could be understood as the overall picture of what an employee gets out of working for a company. It goes beyond compensation to include perks and development opportunities as well as intangibles like company culture and camaraderie among team members.

“This is the full package of offerings that reflect the investment in the employees,” said Preston. “This is career development, performance management, rewards and recognition, benefits and other perks and culture experiences. This is what sets a company apart from other organizations and how you are unique.” 

Employment law

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.

Exempt and nonexempt employees

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. 

On the flip side, exempt employees are not part of this protected group. Employees must meet certain qualifications to be exempt from overtime pay.

“There are two major criteria to classify an employee as exempt,” said Jim Cichanski, founder and chief human resources officer at Flex HR. “They must pass a test of [job duty] exemption, mainly either professional, administrative, management, outside sales, etc. They must [also] meet a threshold of salary of $43,888 annually – soon to be $58,656 annually starting January 1, 2025.”

An exempt employee must also be paid a fixed amount, regardless of how many hours they work each week.

Human capital management (HCM), HR information systems (HRIS) and HR management systems (HRMS)

HR-focused software solutions include HCM, HRIS and HRMS. HCM, HRIS and HRMS are all similar types of software that help HR managers perform their duties.

Intellectual property (IP)

The responsibility of protecting 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.

Onboarding

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.

People analytics

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.

“Instead of hoping that your decisions are right, you can rely on hard data to guide you,” said  Kleeman.

Performance appraisal

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.

Performance review

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.

PTO

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.

Resource management

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

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.

Skills gap 

A skills gap is the difference between the skills an employee has vs. the skills they need to be successful. This can include hard and soft skills. As technologies like generative artificial intelligence (AI) and automation emerge in the workplace, many employees face a broadening skills gap. To remedy this effect, businesses are turning to learning programs to train and reskill their workers.

Succession planning

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.

Upskilling/Reskilling

Upskilling (or reskilling) is the process of teaching employees new skills. This process can be used to help close the skills gap if an employee is falling short in a particular area, as well as prepare an employee for a new role or promotion.

“The world is changing fast and so are the skills needed to succeed,” said Kleeman. “HR must ensure that employees are constantly learning and growing to keep up with these changes.”

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. However, workers’ compensation does not cover general pain and suffering or punitive damages for employer negligence. [Related article: How Much Workers’ Comp Insurance Do You Need?]

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.

Diversity, equity and inclusion (DEI) and diversity and inclusion (D&I)

DEI and D&I 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.

“Companies that ignore DEI are left behind,” said Kleeman. “Employees expect to work in places that are inclusive and forward-thinking and HR plays an important role in ensuring that these values ​​are part of the company’s culture.”

Ghost jobs

Ghost jobs occur when an employer posts a job opening for a role that doesn’t exist. Some reasons employers post ghost jobs are to maintain a steady stream of applicants, motivate workers and boost their reputation as a growing company. Additionally, some employers post real job openings online and then forget to remove them after they are filled. 

“Ghost jobs are posted to evaluate or accrue a talent pool; this practice disengages quality candidates and creates skepticism in the application process and companies that choose this route,” said Alisa Kline, HR consultant at Flex HR.

Gig worker

This is another term for an independent contractor or freelancer. [Find out when to hire a full-time employee vs. a contractor.] A gig worker is not an employee and instead fulfills services for your company as an outsourced provider.  

“Many companies are recognizing that a variety of work can be outsourced and done and handled less expensively and often less efficiently,” said Preston. “Experts can do the work in a fraction of the time and can work across clients so they can qualify as a 1099 or an IC. This can draw down on some of the employee costs which helps the bottom line.”

The Great Detachment

An alarming number of employees have become disengaged at work, causing what’s known as The Great Detachment. A recent Gallup poll on employee retention and attraction found that 51 percent of employees are “watching for or actively seeking a new job.” Some top reasons for wanting to leave include pay, benefits, career development, engagement and culture, well-being and work-life balance. 

“To combat this, employers need to seriously evaluate their employee engagement, take inventory of current offerings and determine where they may be able to make meaningful changes for their employees,” said Kline.

Hybrid work

Hybrid work is the ability for an employee to split up their workweek between working in the office and working remotely.

Labor hoarding

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.

Quiet firing

Quiet firing is when an employer or manager makes an employee’s work experience so poor that the employee decides to quit on their own – as opposed to directly firing the worker.

“This could include isolating an employee, delaying or refusing to promote, micromanaging and either severely reducing or severely increasing workload,” said Kline. “This practice is typically a symptom of poor management and toxic workplaces.”

Quiet quitting

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.

Return to office (RTO)

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 RTO.

Tech shame

This occurs when an employee feels judged for having limited knowledge about a certain type of technology or digital skills. Younger generations are experiencing higher levels of tech shame than older generations. 

Turnover contagion

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.

Unconscious bias

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. 

Work from home (WFH)

WFH 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.” 

“Companies should have policies written and signed for two types of WFH: Those that can work at the office but have received permission to work remotely at home and those that must work from home since there is no office for them,” said Cichanski “For those that have mandatory WFH, most companies supply computers, printers and internet payments.”

Zoom fatigue

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.