20 Human resources terms you need to know

1. Attrition

This term refers to the voluntary and involuntary terminations, deaths and employee retirements that result in a reduction to the employer's physical workforce. If you work in a human resources department at a large organization, keeping track of attrition trends can be a job in and of itself.

2. Balanced scorecard

Developed in the early 1990s by Drs. Robert Kaplan and David Norton, the term “balanced scorecard” refers to a management and measurement system, which evaluates four areas of business: internal business processes, financial performance, customer knowledge and learning and growth.

3. Behavioral competency

Behavioral competency is essentially an evaluation of the behavior qualities and character traits of an employee. How these competencies are defined can vary by employer, but fundamentally they revolve around people skills, managerial skills and achievement skills. Certain positions work better for certain behavioral competencies, and these particular markers will help determine whether a candidate will be successful at the position he or she is applying for—as you might imagine, a candidate applying for a managerial position should have strong achievement and development-related competencies.

4. Benchmarking

Benchmarking is a process of measuring the performance of an organization or team through a variety of metrics—for example, customer satisfaction rate, sales and retention—for future comparison. Benchmarking can be used to compare internal performance and the external performance of competitors to measure if improvement has occurred.

5. Broadbanding

Broadbanding is a pay structure that places less emphasis on hierarchy than job duties, skills and performance. This type of pay structure encourages the development of a wide variety of employee skills and growth but comes with a significant decrease in promotion opportunities. For example, a company that subscribes to broadbanding may have a larger range of potential salaries for a marketing specialist, while a company that doesn’t is likely to have multiple titles with a smaller range of potential salaries for each (for example: junior marketing specialist, marketing specialist and sr. marketing specialist).

6. Bumping

Bumping is a practice that gives established senior employees whose positions are to be eliminated the option of taking other positions—often a step down, complete with less pay—within the company that they are qualified for and that are currently held by employees with less seniority. This is a way for an organization to retain institutional knowledge and experienced workers.  

7. Change management

This is a considered approach for transitioning individuals or organizations from one state to another in order to manage and monitor change. Companies can stay ahead of the game when they think ahead about how they can manage the introduction, implementation and consequences of major organizational changes. 

8. Confidentiality agreement

This is an agreement between an employer and employee in which the employee may not disclose branded, patented or confidential information. Many companies have protected information that, if leaked, could be devastating for the brand or welfare of the organization—a confidentiality agreement serves as legal protection from this.

9. Distributive bargaining

Distributive bargaining is the negotiation between competing parties that involves the distribution of a finite resource. One party prevails, to the detriment of the other.

10. Due diligence

Generally speaking, due diligence refers to the steps taken to ensure compliance with laws and regulations. In mergers and acquisitions, due diligence is the process of thoroughly examining the details of an investment or purchase to ensure all paperwork and documentation is up to date and compliant.

11. Emotional intelligence

Emotional intelligence is the ability to recognize, assess and manage one’s own emotions, as well as others’ emotions. High emotional intelligence is a must-have skill for those working in human resources.

12. Exit interview

An exit interview is the final meeting between management and an employee leaving the company. Information is gathered to gain insight into work conditions and possible changes or solutions, and the employee has a chance to explain why he or she is leaving.

13. Freedom of association

Freedom of association is a right for people to associate with (or leave) any group of their choosing. That group also has the right to take collective action in pursuit of its members’ interests. In an HR context, this generally refers to workers’ freedom to form labor unions.

14. Grievance

A grievance is a complaint brought forward by an employee about an alleged violation of law or dissatisfaction with work conditions.

15. Gross misconduct

Gross misconduct is an action so serious that it calls for the immediate dismissal of an employee. Physical violence and intoxication at work are two common examples of this.

16. Hawthorne effect

The Hawthorne effect is a phenomenon observed as a result of an experiment conducted by Elton Mayo. In an experiment intended to measure how a work environment impacts worker productivity, Mayo’s researchers noted that workers productivity increased not from changes in environment, but when being watched. Applied to HR, the concept is that employee motivation can be influenced by how aware they are of being observed and judged on their work—a basis for regular evaluation and metrics to meet.

17. Nepotism

Nepotism is preferential hiring of relatives and friends, even though others might be more qualified for those positions. The favoritism is generally showed by individuals in a position of authority such as CEOs, managers or supervisors.

18. Onboarding

Onboarding is the process of moving a new hire from applicant to employee status, ensuring that paperwork is done and orientation is completed.

19. Retention strategy

Retention strategy refers to the processes and policies used to ensure employees stay. In order to retain employees and reduce turnover, managers must help employees meet their goals without losing sight of the organization’s goals. This is always a balance that must be managed carefully.

20. Succession planning

This is the process of identifying long-range needs and cultivating a supply of internal talent to meet those future needs. It assists in finding, assessing and developing the individuals necessary to the strategy of the organization.