HR terms, simplified

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360-degree feedback

A review method where an employee receives feedback from their manager, peers, direct reports and sometimes customers, not just their manager.

A

Applicant tracking system (ATS)

Software that collects job applications and helps recruiters track candidates through each stage of hiring.

Attrition rate

The percentage of employees who leave an organisation over a period. It is usually calculated as leavers divided by average headcount.

C

Cost to company (CTC)

The total annual amount an employer spends on an employee, including salary, allowances, benefits and employer contributions.

E

Employee self-service (ESS)

Portals or apps that let employees view and update their own HR information, apply for leave and download documents.

eNPS

Employee Net Promoter Score — a measure of how likely employees are to recommend their workplace, based on a 0–10 survey question.

ESI

Employees' State Insurance — a social security scheme in India providing medical and cash benefits to eligible employees, funded by employer and employee contributions.

F

Form 16

A certificate issued by employers in India showing the salary paid to an employee and the tax deducted at source during the financial year.

Full and final settlement

The final payment made to an employee who leaves, covering pending salary, leave encashment, dues and deductions.

G

Gratuity

A lump-sum benefit paid by employers in India to employees who complete the qualifying period of continuous service, as defined under gratuity law.

Gross salary

An employee's total earnings before any deductions such as taxes or provident fund.

H

HRMS

Human Resource Management System — software that stores employee data and automates HR processes like onboarding, leave, payroll and performance.

L

Loss of pay (LOP)

Salary deducted for days an employee is absent without approved paid leave.

N

Net salary

The take-home pay an employee receives after all deductions from gross salary.

Notice period

The time an employee or employer must give before ending employment, as set out in the employment contract.

O

OKR

Objectives and Key Results — a goal-setting framework that pairs an ambitious objective with measurable results.

Onboarding

The process of welcoming a new hire and helping them become productive — paperwork, equipment, training and introductions.

P

Payroll

The process of calculating and paying employee salaries, including deductions, taxes and statutory contributions.

Professional Tax (PT)

A tax on employment levied by some Indian states, deducted from salary according to state-specific slabs.

Provident Fund (PF)

A retirement savings scheme in India where both employer and employee contribute a share of the employee's wages every month.

S

Succession planning

Identifying and developing employees who can take over key roles when they become vacant.

T

TDS on salary

Tax Deducted at Source — income tax that employers deduct from salary each month and deposit with the government.