Top 10 HR Concepts and Terms You Should Know

Human resources is a field that requires a combination of both interpersonal skills and strategic thinking. While there are many administrative tasks that must be completed, the role is largely focused on managing and interacting with people.

Understanding the jargon and concepts commonly used in the field can be helpful for those pursuing an MBA in human resources or for those seeking to advance in their current HR role.

To assist in this, we have created a glossary of commonly used HR terms and concepts.

10 HR Concepts and Terms

Human Resources (HR) is the department within an organization responsible for managing personnel, including recruiting, hiring, training, and development, as well as employee relations, compensation, and benefits.

There are a variety of concepts and terms that are commonly used in the field of HR, here are some:

1. Engagement

“Engagement” is a fundamental concept for all generalists in human resources. It is the gold standard for HR and has been for a long time.

Most of us are familiar with engagement, which is said to improve productivity, reduce absenteeism, lower staff turnover, enhance product quality, and lead to fewer product errors. Unlike burnout, engagement is a positive state.

People who experience burnout have low energy, are emotionally detached from their job, and have a negative attitude; on the other hand, those who are engaged have high energy, are dedicated to their work, and often become so engrossed in it that they lose track of time.

2. Job Demands-Resources Model

The JD-R model, also known as the job demands-resources model, is a concept in human resources that deals with work-related stress.

It suggests that different occupations have their own unique risk factors for occupational stress, which can be grouped into two categories: job demands and job resources.

The JD-R model posits that work demands, such as heavy workloads and time constraints, can lead to stress and burnout. On the other hand, job resources, such as adequate staffing and support, can promote energy and engagement.

According to this model, job resources act as a buffer against workplace demands. When there is a high demand for jobs, it’s important to have enough resources, such as staff, to fill those positions, otherwise it could lead to stress and burnout.

3. Strategic Human Resource Management

The concept of “strategic human resource management” was popularized by Dave Ulrich and his colleagues in the early 2000s. Ulrich argued in a 1998 essay that HR should be defined by the outcomes it produces – results that enhance the organization’s value to its customers, shareholders, and employees.

Following this, human resources began to shift towards a more strategic approach. This led to the creation of the HR Business Partner position, which is a role that requires an HR advisor to provide both operational guidance and strategic input.

The goal of strategic human resource management is for HR to align its operations with the organization’s goals. When done effectively, HR can play a vital role in helping the business achieve its objectives.

4. HR Analytics

The concept of aligning human resources operations with the organization’s strategic goals is known as human resource analytics. It is a data-driven strategy used in the field of human resource management, also referred to as “people analytics.”

HR analytics helps to evaluate the effectiveness of HR operations and how they contribute to the overall success of the organization.

For example, simply stating that employee training has increased in the past year is not sufficient, HR analytics would help understand how this training aligns with the company’s goals and contributes to the company’s performance.

5. Employee Turnover

The HR concept of “employee turnover” refers to the process of employees leaving an organization. It may seem simple but it is a complex issue that can have a significant impact on a company.

Employee turnover can be classified into two types: “regrettable” and “unforgivable loss.” Regrettable turnover occurs when top performers leave the organization, which is undesirable for the company.

On the other hand, “unregrettable loss” or “desired turnover” occurs when poor performers leave the company.

While some level of employee turnover is unavoidable, high levels of regrettable turnover can have a negative impact on an organization. Thus, managing and retaining top talent and critical personnel should be a priority for HR.

6. Applicant Tracking System

An applicant tracking system, or ATS, is a vital tool for human resources professionals. It is a type of Human Resource Information System (HRIS) that is used to manage the recruitment and hiring process.

The ATS acts as a recruiting version of a customer relationship management system, where every time a candidate applies for a job, their profile is stored in the system.

The ATS can be used to search for candidates through job and resume boards such as LinkedIn, Monster, and others, post job openings to job websites, match applicants to job openings, and invite applicants to interview.

7. HR Report

The concept of HR reporting refers to the process of using data and analytics to gain insight into the performance and effectiveness of human resources operations.

This can be done through the use of an HRIS (Human Resource Information System) that generates reports and a dashboard that allows for interactive analysis of the data.

By utilizing HR reporting, organizations can better understand and control their data, leading to more informed decision making. This can include assessing the impact of turnover and identifying areas of high performance or loss remorse.

8. Employee Experience

The concept of employee experience is a relatively new area of focus in the field of human resource management (HRM). It refers to the overall perception and feelings that employees have about their work and the organization they work for.

As it is seen as a driving force behind employee engagement, it is becoming an increasingly important area of focus for HR professionals. The field is still relatively new and more research is needed to fully understand its impact on organizational outcomes.

9. 360 Degree Survey

The 360-degree survey is a common HR tool that aims to gather feedback from multiple perspectives, including managers, coworkers, subordinates, and clients.

The goal is to provide a comprehensive view of an individual’s behavior. While 360-degree surveys are often used to evaluate the performance of managers, research suggests that they are successful in only one-third of cases.

In another third of cases, the surveys are ineffective, and in the remaining third, they may even worsen performance.

10. Cost Per Hire

The concept of “cost of hire” pertains to the expenses incurred in the process of recruiting and onboarding a new employee. These costs can include advertising the job opening, utilizing recruitment agencies, and training and relocating the new hire. A good HR system can help track and calculate the total cost of each new hire for an organization.

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