BUSINESS - W3-4: HR

Core HRM Concepts

Human Resource Management (HRM)

The strategic approach to managing an organization's employees. It expands on personnel management to include planning and policy making to ensure the business has the right people.

Personnel Management

The traditional, administrative tasks related to hiring, training, compensating, and overseeing employees.

HR Planning & Job Design

Human Resource Planning

The process of forecasting an organization's future human resource needs and determining how to meet them.

Forecasting

Estimating the future demand for and supply of workers.

Job Analysis

A formal process of studying a job to identify its tasks, duties, responsibilities, and the skills and qualifications required.

Job Description

A written statement that lists the tasks, duties, and responsibilities of a specific job.

Job Specification

A written statement that describes the skills, education, experience, and personal characteristics a person must have to perform a specific job.

Recruitment & Selection

Recruiters

HR staff specialists responsible for finding and attracting qualified job candidates.

Résumé

A summary of a job applicant's education, work experience, and interests.

Termination

The act of ending an employee's employment with the company. It includes:

1. Layoff: Termination (often temporary) due to economic reasons or company downsizing, not performance.

2. Firing: Permanent termination for cause, often due to poor performance or misconduct.

Seniority

An employee's length of service with a company or in a specific position. Often used to determine benefits, promotions, and layoff order.

Outplacement

Job-hunting assistance (e.g., résumé writing, career counseling) that a company provides to employees who have been laid off.

Training & Development

Orientation

A session or process for acclimating a new employee to the organization, its culture, policies, and procedures.

Performance Appraisal

The formal process of evaluating an employee's work performance against specific criteria.

Compensation & Benefits

Compensation

The total payment and benefits that employees receive for their work.

Wages

Cash payments based on the number of hours worked or the number of units produced. Typically for hourly workers.

Salaries

Fixed regular cash payments, typically expressed as an annual sum and paid weekly or monthly. Typically for professional staff.

Incentives

Cash payments to reward employees for achieving a desired level of performance. This includes:

• Bonus: A cash payment reward for achievement.

• Commissions: Payments based on a percentage of the sales they generate.

Profit Sharing

A system where employees receive a portion of the company's profits.

Production Sharing

A plan that rewards employees based on cost savings from increased productivity, rather than overall profits.

Fringe Benefits

Compensation other than wages, salaries, and incentives, such as health insurance or retirement plans.

Perks (Perquisites)

Special fringe benefits for a company's most valuable employees, such as company cars or club memberships.

"Cafeteria" Benefits

A flexible benefits plan that allows employees to choose the benefits that best suit their individual needs, up to a certain dollar amount.

Specific Benefits & Programs

Unemployment Insurance

A government-sponsored program that provides temporary financial assistance to workers who are laid off.

Pension Plans

Company-sponsored programs that provide retirees with a regular income.

Employee Stock Ownership Plan (ESOP)

A program that enables employees to become part-owners of the company by receiving or buying shares of stock.

Worker Buyout

A strategy where a company offers financial incentives, such as enhanced retirement benefits, to encourage employees (often senior staff) to voluntarily resign.

Employment Status & Legalities

Mandatory Retirement

The required dismissal of an employee who reaches a certain age. This practice is now heavily restricted by law in many countries.