Understanding HR Terminologies!


Human resource management is a planned approach to looking after and supporting employees while also creating a positive workplace culture. HR analytics is a field that utilizes data and statistical analysis to make informed decisions about an organization’s workforce. Human resources professionals rely on this essential tool to assess HR efficiency, identify trends, and make data-driven decisions. HR analytics provide HR professionals with data-driven decisions that are essential for an organization’s success. By 2024, the HR analytics market is expected to reach USD 3.6 billion.

HR analytics is essential for organizations, giving HR pros insight into their workforce and allowing them to identify areas for improvement and make informed decisions that enhance performance. By analyzing data on employee engagement, retention, productivity and outcomes, HR professionals can detect patterns and trends which ultimately benefit the organization’s bottom line. HR analytics not only reduces costs by identifying inefficiencies, but it also minimizes turnover by improving employee engagement and optimizing the workforce by identifying skills gaps and developing tailored training programs. Thus, by leveraging data and statistical analysis, HR professionals can make informed decisions that enable organizations to achieve their goals and objectives.

Terminologies Every HR Professional Must Be Aware!

There are many HR terms that are used in the business world today and it is crucial for HR professionals to have a thorough idea about these terms. Here, we have compiled a list of HR terminologies that every HR professional must be aware of:


Attrition is an HR terminology that refers to the loss of employees from an organization. It is a natural process that every organization faces, due to many factors like skill gaps, retirement, financial reasons, career progression, etc. Attrition can be measured by the rate at which employees leave the organization, as well as how many people stay at their current jobs for more than one year (also known as “churn”).

Balanced scorecard 

A balanced scorecard is a strategic management tool that measures and tracks performance in four critical areas, i.e., financial, customer, internal processes and learning and growth. A balanced scorecard can offer you a holistic view of your business, enabling you to develop a comprehensive insight. It can be utilized for short-term planning or long-term strategy creation, depending on what needs are identified.

Behavioral competency 

Behavioral competency is a set of skills and behaviors necessary to successfully complete a job. It includes both technical skills as well as soft skills like communication and leadership. 

Behavioral competencies are often used in job descriptions to help employers screen candidates. They’re also used by companies to train employees and coach them on how to improve. 


Benchmarking is an HR term that refers to a management tool to measure, compare and improve the performance of an organization against that of its peers. It helps an organization improve its performance by identifying best practices. It is a process of comparing an organization’s performance with that of its peers in the same industry or sector through collecting data on various aspects such as HR policies/practices, employee satisfaction levels etc., so as to identify areas where improvement can be made. 

Broad banding 

Broad banding is a performance management system that is used to classify employees into different levels based on their performance. Broad banding is often used in organizations where employees are rewarded based on their performance, and it can be applied at all levels of an organization, from entry-level positions up to senior executive positions. 


Bumping is a promotion practice in which an employee with lower grades or pay grades is promoted to a higher grade or pay grade that was previously held by someone else but who is not promoted. In this case, the bumping employee will receive an increase in salary and/or benefits as per their new job level. 

Change management 

Change management is one of the HR terminologies that refers to the process of managing change in an organization. It involves planning for, initiating and implementing changes that are beneficial to the organization. Change can be both positive and negative, such as improving processes or eliminating them altogether. In order for any kind of change to occur smoothly, it’s important that you understand why people resist change; and then take steps to create a culture where resistance isn’t an issue at all. 

Confidentiality agreement 

The confidentiality agreement is an official contract between two parties in which one party promises not to disclose any information about the other or their business. It may include provisions for how long it will remain in force, who has access to sensitive data, and what happens if someone breaks their promise not to share sensitive information with anyone else. It’s important for HR professionals to know what should be included in a confidentiality agreement and how to use it properly.

Distributive bargaining 

Distributive bargaining is a negotiation process in which the parties bargain over the division of a fixed amount of resources. The parties are assumed to be self-interested and utility-maximizing, and their bargaining power depends on their relative negotiating strengths. For example, suppose one party has more information than another or has more options outside of this particular negotiation. In that case, they have greater power relative to their counterpart and can use this leverage to their advantage during negotiations. 

Due diligence 

Due diligence is the procedure of investigating a company, product or service to determine its suitability or fitness for purpose. It is undertaken before a contract or agreement is signed.

Emotional intelligence 

Emotional intelligence (EI) is the ability to assess, perceive, and control the emotions of oneself, others, and of groups. It involves the capacity for empathy and effective communication.

Exit interview 

Exit interview is among the important HR terminologies that refer to the meeting conducted between employers and employees to discuss the reasons for leaving. The HR department usually conducts them but can also be performed by managers or supervisors.  

Freedom of association 

Freedom of association is the right to join with others in a group and to form, join, or refrain from forming any kind of association. It is also known as freedom of assembly or freedom of combination.


Grievance is one of the terms in HR management that refers to the formal complaint made by an employee against their employer or another employee. Grievances can be filed for a variety of reasons, including unfair treatment and discrimination. Grievance procedures are in place to ensure that employees have access to the legal process when they feel they have been treated unfairly.

Gross misconduct 

Gross misconduct is an employee’s behavior that is considered to be extremely serious and unacceptable and which can lead to immediate termination of employment without notice or payment in lieu of notice. Gross misconduct can include actions such as theft, violence, harassment, discrimination, fraud, or serious violations of company policies and procedures.

Hawthorne effect 

The Hawthorne effect is a form of reactance. It refers to the phenomenon where people alter their behavior when aware they’re being watched, either as an attempt to avoid being controlled or manipulated by others or simply as an opportunity for individuals to show off and gain attention from others. The Hawthorne effect has been observed many times in experiments that involve observing participants’ reactions over time, but it’s also applicable in other contexts where you might think about how your presence might impact what happens around you.


Nepotism is the practice of hiring or promoting family members (relatives). It is illegal in some countries but not in others. For example, it is quite common for companies to hire relatives of existing employees because they already know the company culture and are familiar with its practices.


Onboarding is an HR terminology that refers to the process of integrating a new employee into an organization. It involves introducing them to the company, its culture, and its people. Onboarding can also be described as the period when a new employee goes from being an outsider who doesn’t know anyone or anything about the organization to become part of it. 

An effective onboarding program will help you build a strong foundation for your employees’ success by providing them with the key information they need to do their jobs right away.

Retention strategy 

Retention strategy is a term that refers to the strategies used by HR professionals to retain their employees. These can be anything from paid leave, flexible work hours and telecommuting options to bonuses or rewards programs.

Succession planning 

Succession planning is a critical component of human resources strategy. It’s important to understand why and how succession planning fits into the overall HR strategy, as well as what elements make up a good succession plan. The aim of succession planning is to ensure that your organization can continue operating smoothly when key employees leave or retire from their roles. Succession plans should be developed with both internal and external candidates in mind so that you’re ready at all times for any unexpected vacancies or retirements. 


HR is an expansive and intricate field, so HR professionals should be familiar with a variety of terminologies associated with the domain. It is essential so that HR professionals can comprehend the significance of the terms and understand how they are utilized in various processes. 



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