Business terms in Human resource management

The situation in which employees are absent from work without a good reason, often measured as the percentage of working days lost, and a common sign of low motivation.

The obligation of an employee or manager to explain and justify their decisions and results to a superior, and to accept the consequences.

A formal process of reviewing an employee’s performance against agreed objectives, giving feedback and setting targets and development plans for the future.

A method of resolving a dispute in which an independent third party considers the case of both sides and decides the outcome, which is binding on both if they agree in advance.

A selection method in which candidates take part, over one or more days, in activities such as interviews, tests, group exercises, role plays and presentations while trained assessors observe them.

The formal right of a person, given by their position in the organisation, to make decisions and to direct the work of others.

A leadership style in which the leader makes decisions alone, without consulting employees, and expects instructions to be followed, with close supervision and one-way communication.

The use of machines, robots and software to carry out tasks previously done by people, reducing the need for some types of labour.

Factors that prevent or distort the transfer of a message between a sender and a receiver, so that it is not received or understood as intended.

An organisational system that relies on formal rules, written procedures, paperwork and a clear hierarchy of authority, which can make decision-making slow and inflexible.

An organisational structure in which most decision-making authority is kept by senior managers at the top of the hierarchy or at head office.

The formal line of authority through which instructions pass down an organisation, and information and accountability pass up, from the top to the bottom of the hierarchy.

A person or group, from inside or outside an organisation, responsible for leading, supporting and communicating a change.

The planning, introduction and support of changes in an organisation, such as to its structure, technology, processes or culture, so that they achieve their aims with as little disruption and resistance as possible.

The process of negotiation between an employer or employer association and trade unions or employee representatives to agree pay, working conditions and other terms of employment for a group of employees.

A payment to an employee, usually a percentage of the value of the sales they make, paid in addition to or instead of a basic salary.

The transfer of information, ideas or instructions from a sender to a receiver through a medium, so that the message is received and understood as intended.

The stages through which a message passes: a sender encodes it, sends it through a medium to a receiver who decodes it, and feedback returns, with noise able to interfere at every stage.

A method of resolving a dispute in which an independent third party helps the employer and employees, or their representatives, to communicate and reach their own voluntary agreement.

A legal agreement between an employer and an employee setting out the terms and conditions of the job, such as duties, hours, pay, holidays and the notice period.

In Handy's shamrock organisation, the outside individuals and firms contracted to carry out specialist or non-core work, paid for results rather than time.

A systematic assessment of an organisation’s culture, including its values, norms, behaviours, leadership style and reward systems, used to identify cultural differences and plan change.

A conflict that arises when groups with different values, beliefs and ways of working must work together, for example after a merger or acquisition, during rapid growth or under a new leader.

An organisational structure in which decision-making authority is spread from senior managers or head office to lower levels of the hierarchy, departments or branches.

A theory that people are most motivated, and most likely to be intrinsically motivated, when their basic psychological needs for autonomy, competence and relatedness are satisfied.

The removal of one or more levels of hierarchy from an organisational structure, usually layers of middle management, which widens the remaining spans of control.

The passing of authority to carry out a task or make a decision from a manager to a subordinate, while the manager keeps overall responsibility for the outcome.

A leadership style in which the leader involves employees in decision-making by sharing information, discussing options and taking account of their views, with two-way communication.

A change in the size or structure of a population, such as its age profile, birth rate, life expectancy or ethnic composition.

A reduction in an employee’s willingness to work hard or well, often caused by poor management, unfair treatment, job insecurity or unrewarding work.

A payment system, proposed by Taylor, in which workers who reach a standard output are paid a higher rate for every unit produced than workers who fall below the standard.

The termination of an employee's contract by the employer because of the employee's conduct, capability or performance; often called being fired or sacked.

An approach to managing change in which managers explain the reasons for and effects of a change to employees before and during its introduction, so that they understand and accept it.

The transfer of messages using digital technology, such as email, intranets, instant messaging, collaboration platforms, video conferencing and social media.

The involvement of employees in decision-making in their organisation, through methods ranging from consultation and suggestion schemes to works councils and representation on the board.

An employee elected or appointed to represent the views and interests of colleagues in discussions with management, such as a union representative (shop steward) or a works council member.

A scheme in which a company gives or sells its shares to employees, often on favourable terms, so that employees become part-owners of the business.

An organisation of employers, usually in the same industry, that represents their shared interests, advises members on employment matters and may negotiate with trade unions on their behalf.

Giving employees the authority, resources and trust to make decisions about their own work and to solve problems without referring them to a manager.

A theory that employees compare the ratio of their outputs (rewards) to inputs (contributions) with that of a referent, and that perceived unfairness reduces motivation.

A theory that effort depends on the belief that effort leads to performance (expectancy), that performance leads to a reward (instrumentality), and on how much the reward is valued (valence).

An approach to managing change in which managers force employees to accept a change by using their authority and the open or implied threat of negative consequences.

Filling a vacancy with a person from outside the organisation, for example through advertisements, online platforms, agencies or headhunting.

The drive to do an activity in order to gain a separate outcome, such as pay, a bonus or praise, or to avoid a punishment.

An approach to managing change that helps employees adapt to it through training, counselling, time and practical resources.

The five activities that, according to Henri Fayol (1916), make up the work of every manager: planning, organising, commanding, coordinating and controlling.

The response of the receiver to a message, which confirms to the sender whether the message has been received and correctly understood.

Payments to employees in money, or with a monetary value, such as salaries, wages, commission, bonuses, shares and fringe payments.

An organisational structure with few levels of hierarchy and wide spans of control, giving a short chain of command.

A working arrangement in which employees choose their start and finish times within agreed limits, usually working a set total of hours and being present during fixed core hours.

In Handy's shamrock organisation, the part-time, temporary and seasonal workers hired as demand requires, usually with less security and fewer benefits than core staff.

Any working pattern other than fixed full-time hours at a fixed workplace, such as part-time work, job sharing, compressed hours, flexi-time, teleworking or hybrid working.

Communication through the official channels of an organisation, following the chain of command or agreed procedures, such as reports, minutes of meetings, official emails and announcements.

An ongoing review of an employee’s performance that gives regular feedback and support to help them improve and develop, rather than to judge them.

Benefits in addition to wages or salary that have a monetary value, such as a company car, health insurance, pension contributions, staff discounts or subsidised meals.

A contract of employment for a full working week, typically about 35 to 40 hours, usually permanent and with full employment benefits.

The ease with which workers can move from one location to another to take up work, which depends on factors such as housing costs, family ties, language and transport.

A labour market in which individuals work on short-term tasks or projects, often arranged through digital platforms and paid per task, rather than in permanent employment.

A form of industrial action in which employees deliberately reduce the pace of their work, lowering output while remaining at work.

The informal and unofficial network of communication between employees through which information and rumours spread quickly across an organisation.

Charles Handy’s model of four types of organisational culture, each named after a Greek god: power culture (Zeus), role culture (Apollo), task culture (Athena) and person culture (Dionysus).

Charles Handy's model of an organisation made up of three groups of workers: a permanent professional core, a contractual fringe of outside suppliers, and a flexible labour force.

The direct approach of a person working for another organisation, usually by a specialist recruiter, to persuade them to apply for a senior or specialist job.

A theory that the factors causing job satisfaction (motivators) differ from those causing dissatisfaction (hygiene factors), so removing dissatisfaction does not by itself motivate employees.

Communication between people at the same level of hierarchy, often in different departments, in order to coordinate their work; also called lateral communication.

The management of people in an organisation, including planning the workforce, recruiting, selecting, training, appraising, rewarding, retaining and releasing employees so that the organisation meets its objectives.

A flexible working arrangement in which employees divide their working time between the employer's workplace and working remotely, usually from home.

Aspects of a job’s context, such as pay, working conditions, job security, supervision and company policy, that cause dissatisfaction if inadequate but do not motivate when improved.

The movement of people into a country to live and work there; emigration is the movement of people out of a country.

Training given to new employees to introduce them to the organisation, its culture, policies and procedures, their colleagues and their job.

Collective measures taken by employees, or by employers, to put pressure on the other side in a dispute, such as an overtime ban, a work-to-rule, a go-slow, a strike or a lockout.

A system in which employees share in the control and decision-making of their organisation, for example through elected representatives on the board of directors.

The relationship between the management of an organisation and its employees and their representatives, including how pay and conditions are agreed and how conflicts between them are handled.

Communication outside the official channels of an organisation, through personal and social contacts between employees, such as conversations at breaks, private message groups and the grapevine.

The situation in which a person receives more information than they can process effectively, so that important messages are missed or decisions are delayed.

Filling a vacancy with an existing employee of the organisation, for example by promotion or redeployment.

The drive to do an activity because it is interesting, enjoyable or meaningful in itself, rather than for a separate reward.

An approach to management decision-making based on a manager’s experience, instinct, feelings and judgment rather than on systematic analysis of data.

Specialist or technical language used by a particular profession or group, which people outside that group may not understand.

The process of studying a job to identify its tasks and responsibilities and the skills, knowledge and qualities needed to do it.

A document that sets out the title, purpose, main tasks, responsibilities and reporting relationships of a job.

Increasing the number and variety of tasks in a job, at a similar level of skill and responsibility.

Redesigning a job to give the employee greater responsibility, challenge and control over their work, for example by adding planning, decision-making and checking tasks.

Moving employees between different jobs or tasks at regular intervals, so that they gain a variety of experience and skills.

The ease with which workers can move between jobs, either between occupations (occupational mobility) or between locations (geographical mobility).

The percentage of a business’s workforce that leaves over a period, usually a year: number of staff leaving in a year divided by the average number of staff, multiplied by 100.

A leadership style in which the leader sets broad objectives and gives employees the freedom to make most decisions about how to achieve them, with minimal direction or supervision.

The ability to influence, inspire and motivate others to work willingly towards a vision or a set of goals, whether or not the leader holds a formal position.

A model developed by Tannenbaum and Schmidt (1958) that arranges leadership styles along a line according to the balance between the leader’s use of authority and the freedom given to employees.

The way in which a leader makes decisions, communicates with and directs employees, especially how far employees are involved in decision-making.

The number of layers of management and authority in an organisation, from the most senior position down to the front-line employees.

An action by an employer in a dispute in which employees are prevented from working, and are not paid, until they accept the employer’s terms.

The process of planning, organising, directing and controlling an organisation’s resources so that it achieves its objectives efficiently and effectively.

An approach to management, introduced by Peter Drucker, in which managers and employees agree specific objectives for each person and team that support the organisation’s overall objectives, and review performance against them.

An approach to managing change that uses selective information, or gives the leaders of resisting groups a symbolic role in the change, to win support without genuine involvement.

A theory that people are motivated by five levels of need (physiological, safety, social, esteem and self-actualisation), each becoming the main motivator once the levels below are largely satisfied.

An organisational structure in which employees report to two managers at once, a functional manager and a project or product manager, so that teams from different departments work together on projects.

A theory that people are motivated by three needs learned through experience, the needs for achievement, affiliation and power, and that the dominant need differs between individuals.

The method or channel through which a message is sent, such as a meeting, a telephone call, an email, a report, a video call or a notice board.

The information, instruction or idea that a sender transmits to a receiver; an effective message is accurate, clear, complete and suited to its audience.

The lowest hourly rate of pay that employers are legally allowed to pay their workers, set by the government.

The internal and external forces that cause a person to act, and that determine the direction, intensity and persistence of their effort towards a goal.

Aspects of the work itself, such as achievement, recognition, responsibility, interesting work, advancement and personal growth, which create job satisfaction and motivate employees, according to Herzberg.

An approach to managing change in which managers offer incentives or concessions to employees or their representatives in exchange for accepting a change.

An agreement between an employer and a trade union in which the union agrees not to take strike action for a set period, usually in return for improved terms or arbitration of disputes.

Any interference that prevents a message from being received or understood as the sender intended, such as physical sound, technical faults, unclear language or the receiver’s emotions.

Ways of motivating employees that do not involve direct payment, such as job enrichment, job rotation, job enlargement, empowerment, purpose and teamwork.

The transfer of meaning without words, through body language, facial expressions, gestures, eye contact, tone of voice and appearance.

The ease with which workers can move from one type of job or occupation to another, which depends on their skills, qualifications and access to retraining.

Training that takes place away from the employee’s usual place of work, such as courses at a college, a training centre, a conference or online.

Training that takes place at the workplace while the employee is doing their job, for example through coaching, mentoring or shadowing an experienced colleague.

The transfer of messages using the spoken word, such as face-to-face conversations, meetings, presentations, telephone calls and video calls, which allows immediate feedback.

A diagram that shows the formal structure of an organisation: its roles and departments, the levels of hierarchy, the chains of command and the spans of control.

The shared values, beliefs, norms and attitudes of the people in an organisation, which shape how they behave and how work is done; “the way we do things around here”.

The formal way in which an organisation arranges its roles, departments and lines of authority, communication and accountability.

A form of industrial action in which employees refuse to work beyond their contracted hours, reducing the employer’s output without employees losing their basic pay.

A contract of employment for fewer hours than a normal full working week, such as mornings, school hours or weekends only.

An approach to managing change in which employees take part in planning and implementing the change, which increases their commitment to it.

A leadership style in which the leader makes decisions in what they believe are the best interests of employees, often after consulting them, and looks after their welfare in return for loyalty.

A form of arbitration in which the arbitrator must choose either the employer’s final offer or the employees’ final claim in full, with no compromise between them.

A payment system in which part of an employee’s pay, such as a bonus or pay rise, depends on how well they meet agreed targets or objectives.

A type of organisational culture in which the organisation exists mainly to serve the individuals in it, usually skilled professionals who work independently while sharing resources.

A document that sets out the qualifications, experience, skills and personal qualities needed by the ideal candidate for a job, often divided into essential and desirable criteria.

A payment system in which employees are paid a fixed amount for each unit of output they produce.

A type of organisational culture in which power and decision-making are concentrated in one person or a small group at the centre, with few rules and influence based on closeness to the leader.

In Handy's shamrock organisation, the permanent, highly skilled employees and managers whose knowledge is essential to the organisation and who are hard to replace.

A payment system in which employees receive a share of the business’s profits, usually as a bonus calculated as a percentage of their salary.

An organisational structure in which work is arranged around temporary projects, with teams formed from people with the necessary skills and disbanded when each project ends.

An employee’s sense that their work is meaningful and makes a positive difference to other people, the organisation or society.

The person or group for whom a message is intended, who decodes it and interprets its meaning.

The process of identifying the need for a new employee, defining the job and the person needed, and attracting suitable candidates to apply.

A business that finds, screens and puts forward candidates for an employer’s vacancies in return for a fee.

The termination of an employee's contract because the job no longer exists or fewer workers are needed for that kind of work, not because of the employee's performance or conduct.

The unwillingness of employees or other stakeholders to accept or adapt to a change in the workplace, shown through opposition, delay, low morale or leaving the organisation.

The duty to complete a task or achieve an outcome; a manager who delegates a task can pass on authority but keeps overall responsibility for it.

The ability of an organisation to keep its employees, measured by the proportion of staff who stay with the organisation over a period of time.

A type of organisational culture in which power comes from a person’s position in the hierarchy, and work is controlled by rules, procedures and clearly defined job roles.

A fixed amount of pay for a year’s work, usually paid in equal monthly instalments, regardless of the exact hours worked or output produced.

A model of organisational culture with three levels: artefacts (visible signs such as dress and layout), espoused values (what the organisation says it believes) and basic underlying assumptions (unspoken beliefs taken for granted).

An approach to management decision-making based on the systematic collection and analysis of data, measurement and evidence, so that decisions are logical and can be justified.

The process of choosing the most suitable candidate for a job from those who applied, using methods such as interviews, tests and references.

The highest level in Maslow’s hierarchy of needs: the need to fulfil one’s potential, for example through challenging, creative and meaningful work.

An appraisal method in which employees evaluate their own performance against their objectives, usually before discussing it with their manager.

The person or group who starts a communication by encoding an idea into a message and choosing the medium through which to send it.

The process of selecting, from all applicants for a job, the small number who best match the person specification and will be invited to interview or further selection.

An agreement in which an employer recognises only one trade union to represent all the employees at a workplace or in a company for the purposes of collective bargaining.

An approach to leadership in which the leader adapts their style to the situation, especially to the competence and commitment of employees and the nature of the task, as in the Hersey–Blanchard model.

The number of subordinates who report directly to one manager or supervisor.

A form of industrial action in which employees collectively stop working for a period, in order to pressure the employer to meet their demands.

An organisational culture in which the core values and norms are clearly defined, widely shared and deeply held by employees, so that behaviour is consistent across the organisation.

An organisational structure in which employees are grouped into departments by the function they perform, such as marketing, finance, human resources and operations.

An organisational structure in which the business is divided into divisions based on its products or product lines, each with its own functional staff.

An organisational structure in which the business is divided into divisions based on geographical areas, each responsible for its operations in that region.

An employee who reports directly to a manager or supervisor above them in the hierarchy and works under that person's authority.

A review at the end of a period, usually a year, that judges an employee’s overall performance against set criteria, often with a rating used for pay or promotion decisions.

An organisational structure with many levels of hierarchy and narrow spans of control, giving a long chain of command.

A type of organisational culture in which teams are formed to complete specific tasks or projects, and power and influence come from expertise rather than position.

The view that employees are motivated mainly by money, so output is maximised by studying tasks scientifically, training workers in the most efficient method and paying them according to output.

Organising employees into groups that work together and share responsibility for completing a task or meeting a goal.

Working away from the employer's premises, usually from home, while staying in contact through digital technology; also called remote working.

A contract of employment that lasts for a fixed period or until a specific task is completed, such as seasonal work or cover for an absent employee.

The observation and timing of each step of a task in order to find the quickest efficient method of doing it and to set a standard time or output for the job.

A payment system in which employees are paid a fixed amount for each hour worked, often with a higher rate for overtime.

An organisation of employees that acts collectively to protect and improve its members’ pay, working conditions and job security, mainly by negotiating with employers.

The process of improving employees’ knowledge, skills and attitudes so that they can perform their current or future jobs more effectively.

The termination of an employee's contract without a fair reason or without following a fair procedure, for which the employee can claim compensation or reinstatement.

Communication between different levels of hierarchy in an organisation, either downwards from managers to subordinates or upwards from subordinates to managers.

The transfer of messages using images, such as charts, graphs, diagrams, infographics, photographs, videos, signs and symbols.

Payments to employees calculated according to the number of hours worked (a time rate) or the amount produced (a piece rate), usually paid weekly or monthly.

An organisational culture in which values and norms are unclear, inconsistent or not widely shared, so that employees behave differently across the organisation and need more rules and supervision.

A form of industrial action in which employees follow their contracts and the official rules exactly, refusing any voluntary or extra work, so that output and efficiency fall.

The process of forecasting an organisation's future labour needs (the number of workers, the skills required, and when and where they are needed) and planning how to meet them from internal and external sources.

A body of elected employee representatives that management must inform and consult on workplace matters such as working hours, restructuring and new technology, common in many European countries.

The transfer of messages using written words, on paper or on screen, such as letters, reports, memos, minutes and emails, which gives a permanent record.

A contract of employment under which the employer does not guarantee any minimum number of hours, and the worker is paid only for the hours actually worked.

An appraisal method in which an employee receives feedback on their performance from a range of people they work with, such as their manager, colleagues, subordinates and customers.