Basics

Of

HRM
HR & Management Terminologies

Written by:
M.Jamil “Jalalzai”
Name of book: Basics of HRM & Management Terminologies
Collected and written by: M. Jamil “Jalalzai”
Year of issue: 2024

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 Dedication

It’s my honor to present this small gift to those students who are
newly graduated from HR Management and can help to clarify the
important terms which are constantly being asked during interview
and exam questions.

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 Most Important Topics about HRM

What is HRM?
Human resource management is a strategic approach for the purpose of managing employees
and affairs to achieve better organizational performance.
It aims to attract, manage and retain employees for organization’s strategic goals and culture.

What is organization?
Organizations are social entities that are goal oriented, designed and structured for achieving
common goals.

What is organizational culture?

Organizational culture is the set of values, beliefs, attitudes and rules that influence employee
behavior within an organization.

What is Human resource?

Referring to people as “Human Resource” in the business environment. They are all the people
who work together within an organization.

What are non-human resources:

Referring to elements such as machines, tool, robots, technology that are important to an
organization and they are part of the workforce.

Why is Human Resource Management Important?

HRM involves various activities that are tied together:
Attracting and retaining talents
Enabling managers
Driving strategic planning
Strengthening organizational culture
Creating productive work environment

What does HR Manager do? The seven HR Management Functions

• Recruitment and selection
• Performance management
• Learning and development
• Succession planning
• Compensation and benefits
• Human resources information system
• HR data and analytics

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What is recruitment and selection process?
They are the most visible elements of HR. the goal of the recruitment and selection process is
to find and hire the best candidates for the job.
This process has the following steps:
✓ Announcing vacancy
✓ Writing job description
✓ Creating job adverts
✓ Checking the hiring candidate talent pool
✓ Inviting them for test
✓ Selecting the best one among candidates
✓ The job interview
✓ Reference and background check
✓ The hiring decision
✓ Job offer and contract

What is performance management?

Performance management is the second HR management corner stone. It is the process that
aims at engaging and developing employees in a way that they perform their jobs to the best of
their ability.

What is learning and developing?

Learning and developing (L&D) is another HR fundamental. This is a systematic process that
enhances people’s knowledge, skills, and job performances.

Learning activities include:

• Reading blogs, articles, or books
• Hand-on experimentation
• Attending seminars or conferences

Developing involves the following activities:

• Coaching
• On the job learning
• Leadership training
• Mentoring

What is succession planning?

Succession planning is complex process, that involves plans in case the employees leave the
organization. It is a proactive identification of employees who want to leave and filling the
position with someone else who is eligible.

What is compensation and benefits process?

Another fundamental component of HR management is compensation and benefits. This is
often called Comp & Ben.

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This process consists all of the monetary and non-monetary rewards such as:
• Salary
• Bonuses
• Insurance
• Retirement contribution
• Rewards etc.

What is Human Resource information System?

A human resource information system (HRIS) is a software that aids organizations in managing
employees’ data so you can make better decisions about your workforce.

What is HR data analytics?

HR analytics, also referred to as people analytics, it involves gathering, analyzing, and
reporting HR data to drive business report. This can help HR professionals address specific
workforce issues.

What skills are required for Human Resource Management?

HR professionals need to process the following skills:
HR specific skills including:
• HRM knowledge and expertise
• Administrative expertise
• Employee experience expertise
• Commercial skills
• HR strategy creation and execution
• Advising
Soft skills including:
• Communication skills
• Active listening
• Proactivity

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What is management?
Management is the art of functioning people and resources or the process through which we
can plan, organize, lead, direct, control and achieve desirable goals.

What is planning in Management?

Planning is the function of management that involves setting objectives and goals, determining
the course of action through which way to achieve those objectives.

What is organizing in management?

Organizing is the function of management that involves identifying and grouping the works,
tasks, and people together in accomplishing objectives.

What is leading in management?

Leading in management is a function that focuses on managing people, such as individual
employees, teams and groups rather than tasks.

What is directing in management?

Directing is a function of management, where the managers guide or instruct the employees in
order to accomplish organizational goals.

What is controlling in management?

Controlling is the primary goal-oriented function of management, which means comparing the
performance whether it is performed according to organization’s plan or not.

In general, how many kinds of organization we have?

In general, there are two types of organization: 1: official organizations 2: unofficial
organizations.

What is office?
An office is a space where the employees of an organization perform administrative work in
order to support and realize the various goals of the organization.

What is the importance of an organization?

• Bring together resources (Man + Money + Machine)
• Produce goods and services efficiently
• Facilitate innovations
• Use modern manufacturing and computer-based technology
• Adopt to influence a changing environment
• Create value for owners, customers and employees.

What are the main elements of an organization?

• Goals
• Resources (Man + Money + Machine/Asset)
• Efficiency & Effectiveness
• Stakeholders

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What are the goals of HRM in an organization?
1. Support the organization in achieving its objectives.
2. Helps organizations to have talented, skillful, and engaged people.
3. To create positive relationships between management and employees.
4. To create a mutual trust.

What are the factors affecting employee’s behavior?

1. Motivation
2. Commitment
3. Engagement

What is motivation?
Motivation is psychological motor which means encouraging people or pushes someone to do
something greater or it is the reason for doing something.

What are the components of Motivation?

1. Direction: What a person is trying to do.
2. Efforts: How hard a person is trying.
3. Persistence: How long a person keeps on trying.

What are the two main types of motivation?

1. Intrinsic Motivation: When job is interesting for an individual or the work itself motivates
a person is known as intrinsic motivation. (Motivation by job itself)
2. Extrinsic Motivation: When someone is encouraging someone else by rewards,
punishments, or increased in pay it is known as extrinsic motivation.

What is the meaning of organizational commitment?

Organizational commitment refers to attachment and loyalty, it is associated with the feelings
of individuals about their organization.

What is the meaning of employee engagement?

Engagement is a situation in which people are committed to their works, and they are motivated
to achieve the high level of performance.

What is burn out of employees?

Burn out can take place when individuals are placed under too much pressure to perform. It is
sometimes called disengagement. It happens when workers have no control over their work.

What are two dimensions of an organization?

1.structural dimension
2. contextual dimension

What is structural dimension?

It is within the organization, provides labels to describe the internal characteristics of an
organization by labels we mean ranks, such as boss, supervisor, manager et.

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What does structural dimension include?
1. Formalization
2. Specialization
3. Centralization
4. Hierarchy of authority
5. Professionalism

What is formalization?
It refers to the number of written documentations in an organization, documentation includes:
procedures, job descriptions, regulations, policies etc.

What is specialization?
Means departmentation. The degree to which organizational tasks are subdivided into separate
jobs. Also means division of labor.

What is centralization?
Centralization is decision making process, it means when the decision is made by one top
person or top management in an organization not including employees or staff.

What is decentralization?
Means, when the decision is made by all members of the organization.

What is Hierarchy of authority?

It describes who reports to whom. The hierarchy is related to span of control (the number of
employees reporting to a supervisor.)

What is professionalism?
Refers to the people with professional qualifications.

2. What is contextual/ contingency dimension of an organization?

It is the demission that refers to the outside environment or outside of four walls of an
organization.

What is included in contextual dimension of an organization?

Size: small, big, single, or multiple products.
Technology: refers to tools, techniques, and actions used to transform inputs into outputs. It
can be manual, digital or modern computer based.
Environment: the environment includes all elements outside the boundary of the organization
such as: government, customers, suppliers etc.
Strategic goals: they are internal and can’t be seen in the structure but affect the design of the
organization.
Culture: it is all about values. An organization culture is unwritten but can be seen in the stories,
slogans, ceremonies, dress and office layout.

How many designs are there for an organization?

1. Mechanistic design
2. Organic design

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What is mechanistic design?
It is a machine-based design also known as bureaucratic design.

What is organic design?

It is compared as organs or living organization design, based on low formalization, low
specialization, high team work, more innovative and creative design.

What is organizational climate?

Organizational climate is people’s perceptions, thoughts, opinions, about the organization.
Whether it is good or bad place to work.
If the organizational culture is good, then people have positive perceptions about it.
If the organizational culture is bad, then the perceptions of people are also negative.

What is work group?

Is a number of persons, working together usually reporting to a common superior and having
some face to face interaction for the purpose of achieving organizational goals.

What is team?
A team is a formal group, or small number of people with complementary skills, who are
committed to a common purpose.

What are 4 main objectives of HRM?

1. Societal objective
2. Organizational objective
3. Functional objective
4. Personnel objective

What is societal objective?

Seeks to ensure that the organization
becomes socially responsible to the needs
and challenges of society.

What is organizational objective?

The HR department exists in an
organization, the rule of HRM is needed
for bringing about organizational
effectiveness.

What is functional objective?

Is to maintain the department’s contribution at a level appropriate to the organization’s needs.

What is personnel objective?

It is to assists employees in achieving their personal goals. Personnel objectives of employees
must be retained, and motivated. Otherwise, employee performance and satisfactions may
decline, that may cause high turnover.

What is Human resource planning?

This process is also called HRP. HRP is a process of determining that the organization will
have enough number of qualified persons. Therefore, HR manager is responsible for
forecasting an organization’s future demands to supple right and qualified people.

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What is job?
A job may be defined as “the collection of tasks, duties, and responsibilities” that are regular
assignments to individual employees.

What is job analysis?

Job analysis is the procedure through which you determine the duties and nature of the job. It
provides all information about job such as: job description, job requirements, and what kind of
people to b hired.

What is the importance of job analysis?

Human resource planning: it helps to determine the number of employees to be hired.
Recruitment and selection: it directs the hiring process by suggesting employee specification.
Training and development: it helps to determine the training need of employees.
Placement and orientation: it supports the orientation program.
Job evaluation: job analysis is often linked to the compensation.
Performance appraisal: it helps to design job standards and rewards linked with it.
Personnel information: it provides all the information related to the employees.
Health and safety: it is suggest the ideal work condition for the employees.

What is job description?

A job description is a written record of the duties, responsibilities, and requirements of a
particular job. It is a statement describing the job in such terms as: job title, location, duties,
working conditions.

What is job specification?

The job specification identifies the knowledge, skills, and abilities needed to do the job
effectively.

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It includes the followings:
1. Physical characteristics: such as health, strength, age, height, weight, vision, voice, etc.
2. Psychological and social characteristics: such as emotional stability, flexibility, decision
making ability, conversational ability etc.
3. Mental characteristics: such as general intelligence, memory, judgment, ability of
concentration, foresight.
4. Personal characteristics: such as sex, education, job experience, hobbies.

What is job design?

Job design is the process of establishing employees’ roles and responsibilities.

What are the 4 methods of job design?

1. Job simplification: in job simplification the whole job is broken down into small subparts.
This is done because employees can do these jobs without much specialized training. Job
simplification means making it easier that can be done more quickly.
2. Job rotation: job rotation is the practice of moving employees from one job to another or
multiples in an organization for the purpose of gaining and improving their skills.
3. Job enlargement: job enlargement is an employee development approach that involves
increasing the number of tasks and responsibilities. It means that keeping employees from
getting bored.
4. Job enrichment: it is a strategy used to motivate employees by giving them increased
responsibility and variety in their jobs. This concept means when the job itself becomes
more interesting and challenging to employees that will lead to job satisfaction.

What are the advantages of job rotation?

• The employee experiences variety of works
• Helps to broaden the knowledge and skills of an employee
• Helps in making job interesting and avoiding it become boring.
• This method can make employees more flexible
• Can improve the self confidence in employees.

What are the advantages of job enlargement?

• Increases the diversity of jobs
• Leads to job satisfaction
• Increasing the knowledge and skills of employee
• Reduce tension and boredom

What are the advantages of job enrichment?

• It enriches the role
• Makes work interesting and employee get motivated
• Helps in reducing the rate of employee turnover.
• Increases skills, performances, and morale of employee
• Reduce boredom and dissatisfaction

What is recruitment?
Recruitment is the process of finding or seeking out qualified candidates for a specific position
or job.

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Who is recruiter?
A recruiter is a professional individual who works to match qualified individuals with specific
open positions at an organization.

What is the process of recruitment?

The process of recruitment involves the following steps:
• Human resource planning HRP
• Job analysis
• Recruitment
• Selection
• Placement

What are the sources of recruitment?

1. Internal source of recruitment
2. External source of recruitment

What is internal source of recruitment?

Internal source of recruitment is the process of identifying suitable candidates for a new
position from among existing employees who are already within organization.

What is external source of recruitment?

External source of recruitment involves seeking candidates from outside the organization to fill
job openings.

What are the methods for recruitment?

1. Direct method
2. Indirect method
3. Third party method
4. Employee referral

What is direct method for recruitment?

Direct method for recruitment is the process of hiring a candidate without paying to a hiring
agency. It means that if a company wants to hire someone, they directly contact persons and
offer them a job. The company does not pay to the agency for finding candidates for its
vacancies.

What is indirect method for recruitment?

Indirect method for recruitment is the most frequent used method for recruiting. This is done
through advertisement, journals, newspapers, radio or television.

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What is third party method?
They are public or private employment agencies. they also provide help in recruiting
professional employees.

What is employee referral?

Employee referral is a recommendation of a candidate for a job opening by an existing
employee or someone in the organization.

What are two philosophies of recruitment?

1. Traditional philosophy
2. Realistic philosophy

What is traditional philosophy of recruitment?

In traditional philosophy of recruitment, a large number of job seekers apply for the job, which
makes the final selection process difficult and can often result in the selection of wrong
candidates, wrong selection can lead to employee dissatisfaction and turnover.

What is realistic philosophy of recruitment?

In realistic philosophy, the needs of the organization are matched with the needs of the
applicants, which enhance the effectiveness and leads to employee satisfaction because in this
approach employees who are recruited will stay in the organization for a longer period of time
and will perform at high level of effectiveness.

What is selection?
Selection is the process in which candidates for the employment are divided into two classes,
those who are to be offered employment and those who are not.

What is the difference between recruitment and selection?

The difference between recruitment and selection is:
“Recruitment is a process of searching qualified employees and stimulates people to apply for
jobs.”
“Selection is a negative process because it rejects number of candidates and only the best
candidates can be selected.”

What is involved in selection process?

Application Pool This is a pool of application

Primary Screening Eliminate those who does not fulfill job requirements
Application Blank Unfavorable personnel data
Selection Test Eliminate those who obtain unfavorable test score
Interview Eliminate those not meeting job and org requirements
Background investigation Eliminate those with adverse remarks
Physical Examination Eliminate those not meeting physical standards
Approval by appropriate Adopt objectivity
authority
Final Employment Congratulate
decision

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What is interview?
An interview is a procedure designed to get information from a person to determine whether
the candidate has the necessary knowledge, skills and abilities to do the job.

What is training?
Training is an educational planned effort, provided by an organization for its employees, for
the purpose of enhancing their knowledge, skills and behavior.

What is the goal or purpose of training?

• To enrich the competencies such as knowledge, skills and behavior
• Lessen employee turn over
• Creating positive work environment for employees
• Job satisfaction

What are the objectives of training and development?

There are four main objectives of training and development:
1. Individual objectives: help employees in achieving their personal goals, enhancing
knowledge, skills and capabilities.
2. Organizational objectives: assist the organization by bringing effectiveness and
smoothness.
3. Functional objectives: maintain the department’s contribution at a level suitable to the
organization’s needs.
4. Societal objectives: ensure that in organization is ethically and socially responsible to the
needs and challenges of the society.

What is training design process?

Training design process includes the followings:

1. Need assessment: in this phase we identify the issue, to say why training is needed.
There might be different issues such as:
• When knowledge or skills are inadequate
• New technology
• Restructuring of organization
• New programs
• Complaints

2. Design of training: in this phase we design a training, to say what contents to be covered in
training. Include, preparing course outlines, lectures, learning materials, search for best
lecturers to train and teach the contents etc.

3. Delivering the training: in this phase we decide who and how the training be given. Which
includes:
• Online learning
• Case study
• Discussion
• Classroom lectures
• Video teaching etc.

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4. Evaluation of training: this is the final phase, we evaluate the delivered training, to ensure
whether the training was effective did it work or not. We evaluate:
• The trainee reaction (comparing his previous performance)
• Testing
• Taking demo

What are the types of employee training?

1. On-the-job training
2. Off-the-job training

What is on-the-job training?

This is a form of training provided at the workplace, during the training, employees are
familiarized with the working environment and get a hands-on experience using tools,
documents, equipment, materials etc.

What is off-the-job training?

It refers to an education method where employees learn more about their job away from their
workplace.

What are the four techniques for On-the-job training?

1. Coaching
2. Mentoring
3. Job rotation
4. Jon instruction technique (JIT)

What is coaching?
Coaching is one of the training methods, in which an experienced person, called coach,
supports learners and clients in achieving specific skills.

What is mentoring?
Mentoring is ongoing relationship, when someone shares their own knowledge, skills and
experience with another person to help them to progress.

What is job rotation?

Job rotation is the practice of moving employees from one job to another or multiples in an
organization for the purpose of gaining and improving their skills.

What is job instruction technique (JIT)?

Jon instruction is a step-by-step technique used to train employees on the job.

What techniques are included in of-the-job training?

• Lectures
• Case studies
• Group discussion
• Role playing
• Management games

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What is lecture technique?
This technique is also known as transmissive method, which is conducted by an instructor in a
classroom or lectures.

What is case study technique?

The case study method is a learning technique in which the candidates are faced a particular
problem, the case. It is the exploration process.

What is group discussion technique?

A group discussion is an exchange if views between a group of participants on a given subject.

What is role playing technique?

A role-playing method is technique by giving students the opportunity to play and act of a
person in a given situation.

What is management game?

A game that includes activities to help managers learn how to deal with different work
situations.

What is executive development?

It is also known as “Management development”, that plays a crucial role in HRM. It is the
managers executions who can determine the destiny of the organization by implementing the
strategies.

What is performance appraisal?

Performance appraisal is a formal and systematic way of judging the employees who are
performing their tasks well also who are not performing their task properly.

Why do we need performance appraisal in organization?

• To give information about the performance of an employee on the job, and give ranks on
the basis of their performance.
• To provide information about an employee’s job relevant strength and weakness.
• To provide information to identify shortage in employee regarding ability, skills, awareness
to find out training and development needs.

What are the objectives of performance appraisal?

1. Salary increase: performance appraisal plays an important role in making decision about
increase in salary. Increase in salary of an employee depends on how he is performing his
job.
2. Promotion: performance appraisal gives an idea about how an employee is working in his
present job in comparison to his strength and weakness it decides whether he can be
promoted to the next higher position or not.
3. Training and development: performance appraisal gives an idea about strength and
weakness of an employee on his present job, that the training is required or not to enhance
his or her skills.
4. Feedback: performance appraisal gives an idea to each employee where they are, how they
are working, feedback works in two ways: first, the person gets view about his performance
and he may try to conquer his weakness which may lead to better performance. Second, the
person gets satisfied after he relates his work with organizational objectives.

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5. Pressure on employees: performance appraisal puts a sort of stress on employees for better
performance. If the employees are aware they are been appraised in compensation or
positive performance.

What is discipline?
Discipline means getting obedience to rules and regulations of the organization. Discipline is
absolutely essential for the smooth running of business.

What is ethics?
Ethic refers to the study of good and evil, right and wrong, just and unjust actions. Business
ethics is the same as good or bad practices.

What are the sources of ethics?

1. Religions
2. Culture
3. Law

What is the importance of business ethics?

1. Profit maximization: the importance of ethics in business can be understood by the fact
that ethical businesses tend to make much more profits than the others, the reason for this
is that customers of businesses which follow ethics are loyal and satisfied with the services
and products of the company.
2. Efficient utilization of business resources: if the management or seniors of an
organization follow ethical business practices, for example: not to bribe, not to cheat with
customers, investors, suppliers, etc. employees will also follow the same this will lead to
efficient utilization of business resources.
3. Creates goodwill in the market: an organization, which is well known for its ethical
practices, creates goodwill for itself in the market. This will become a trust worthy and a
business magnet. Investor, shareholders, venture capitalists are more willing to put their
money in the businesses which they can trust.

What is diversity?
Diversity is about accepting that society or an organization is made up of many different groups
which include the followings:
Different skills, different talents, different beliefs (religion) and different languages.

What is culture diversity in HRM?

Managing a diverse workforce is a big challenge, making sure that your organization has a
good balance of a diverse workforce, with high employee engagement and zero cultural
differences is one of the prime responsibilities of both HRM and IHRM (international human
resource management).

What is culture?
Culture is the totality of social transmitted behavior pattern. Such as arts, beliefs, institution,
music, style, cloth, food or drinks, etc.
Culture is learned, we are not born with culture, but we are born with an ability to learn.
After a person is born, he/she will learn what to do with his or her culture.

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What are the benefits of workplace diversity?
• Increase adaptivity and creativity
• Variety of viewpoints and thoughts
• More effective execution
• Higher innovation
• Faster problem solving
• Better decision making
• Increase profit
• Higher employee engagement
• Low turnover

What is leadership?
Leadership is the ability to inspire or the ability to lead and guide or support people to achieve
worthwhile goals.

Who is leader?
A leader is a person who inspires people and motivate them towards achieving goals.

What are two distinguished styles of leadership?

1. Transactional leaders: are those leaders who are more focused on transactions, rules,
regulations, policies. Etc.
2. Transformational leaders: are those leaders who alter and change others or transform others
from one situation to another.

What roles are included in leadership?

• Figure head role (ceremonial role)
• Spokesperson role (indicating a group and their activities)
• Negotiator role (making deals with others for needed resources)
• Coach and motivator (they are used for performance improvement)
• Team builder (building an effective team)
• Team player (being a good team member)
• Technical problem solver (advising others on solving problems)

What is IHRM (International Human Resource Management)?

The process of managing, training, and developing and paying employees in global
organizations is defined as international human resource management.

What is IHRM Model?

This is a modern and global based model which includes the following activities:
• Parent country employees
• Host country employees
• Third country employees

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Parent country employees:
Employees working in the country where the company is originally headquartered are parent
country employees. For example: if an Indian is working in India for a company that originated
in India and has its base here.
Host country employees:
Employees working in the country in which the company’s subsidiary is located, for example:
an Indian residing and working in another country.
Third country employees:
Employees who do not belong to the parent country, but are employed at one of the
headquarters. For example: a German MNC which has is corporate office in America can
employ an American CEO.
What are the objectives of IHRM?
• To enhance or develop skills, knowledge, and abilities or HR managers
• To successfully develop and manage business operations spread across countries
• To manage payroll process and compensate employees fairly and on-time
• Manage the performances, appraisals, and career path of employees
• Develop HR strategies that are competitive and are fit to address the issues and challenges
of employees and businesses in the global landscape.
What are the functions of IHRM?
IHRM includes the following features:
• Recruitment and onboarding
• Global payroll management
• Training and development
• Compliance management

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1. Recruitment and onboarding:
Recruitment and onboarding are fundamental parts of HR responsibilities. Internationally,
the HRM teams must follow some protocols and as IHRM professionals they must create
job descriptions, candidates applying for roles across different countries with diverse
backgrounds and cultures.

2. Global payroll management:

Payroll is the most significant function of the HR department. With global payroll, the
IHRM department must be efficient and managing multi-currency payrolls. Additionally,
the HR must also take care of the taxes, social security etc.

3. Training and development:

Initial training is necessary for every employee, no matter how skillful they are. Every
organization works in a different way, has its own rules and regulations. Which new
employees would be unaware of and must learn as they join the organization.

4. Compliance management:
Maintaining the compliance of an organization is crucial for its success. For an
organization, its important that they stay complaint with the regulations of different
countries. The IHRM must be aware of different labor laws and wage legislation and aims
at helping the organization 100% complaint and ensure that the employees are paid fair and
on time.
What is the difference between HRM and IHRM?
Domestic HRM concerns itself with the management of local/ national compliance while
IHRM focusses on managing the functions, processes, and operations with international
protocols in mind.

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References books:

➢ Aswathapa. K, Human resource management, TMH, 2007, p.695

➢ Rao, T.V.2004, performance management and appraisal systems __HR tools for global
competitiveness, sage publications, London, UK, pp.173-99.
➢ Marchand, D,A, kiettinger, W.J and Rollis,J.D, information orientation-the link to business
performance, OUP,Oxford, UK, pp.173-90
➢ 7 Human Resources Management Basics Every HR Professional Should know.
➢ Erlk yan Vulpen, Neelie Verlinden
➢ AIHR academy to innovate HR
➢ Alp.Consulting

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