A Quick HR Terminology Concepts You Should Use

To understand Human Resource Management you need to understand some important terms. It is not easy to understand the whole HR department without it. We’ll start with some of the more basic terms, expressions, and concepts that you can understand easily by reading this blog. In this post, you’ll find the foremost HR terms and their definitions. 

Definition Of HR Terminology: 

HR terminology or glossary is the set of common terms used for HR management. These words are frequently used by HR professionals. CTC, Net Salary, HRIS, and other terms are introduced in HR terminology. This glossary or terminology on hand is beneficial when you’re stuck and trying to remember a definition. 

Some HR Concepts And Terms You Should Know 

  • CTC (Cost To Company)

CTC is an acronym for Cost To Company. Cost To Company meaning is- the yearly expenditure that the company spends on the employee. It means the total cost a company spends on the employee as salary and benefits. The CTC package is used for defining employee salaries in a year. Salary plus EPF, House allowance, coupons, insurance, and gratuity are included in CTC. 

So, it is like: 

CTC= Gross Salary+ Variables.

  • Net Salary

Net salary meaning is the actual salary that every employee takes home. It is counted after adding allowances and benefits and removing the tax, and statutory deduction. Net salary does not include incentive payments and profit sharing given to the employee. It is the actual amount credited to the bank amount. Tax is based on gross pay. 

Net Salary= Basic+ Variables- Deductions.

  • Leave Approval Mail

When an employee applies for leave, he or she will wait for confirmation. So, leave approval mail is the confirmation mail written to an employee as a positive response. A respective person like HR or admin can approve or reject leave as per valid or non-valid reasons. In this case, the tone of the letter should be professional, polite, and communicative. 

  • Form 16

Form 16 meaning is one type of certificate, that employers give to a salaried employee at the end of the financial year. This form is used for filing tax returns. 

There are 2 types of Form 16: 

Form 16A: This is used for tax collection by the company and deposited to the IT department. 

Form 16B: It is a statement with the paid salary and deductions like information. 

Form 16 is compulsorily given by all businesses to their employees. It acts as income evidence for tax credit and assists with income tax returns. 

  • Application Letter

When you are thinking to get a new job, an application letter is coming in the role. You may need to write an application letter to get the utmost position for you. It is the official letter used to inform the employer of your interest in the position at the company. An application letter has another name for a cover letter for any application. It includes a job application with a CV or resume. If you write one, you may have a higher chance to get the position. 

  • Form 12B

Form 12B is a form issued by the Income tax department. You can download Form 12B, and it must be presented according to Rule26A in India. This form can be used for an employee who shifts from one company to another in the midst of the financial year. Though this form is not compulsory, the company asks for it in order to get all details of the employee from their previous company. 

  • Interview Invitation Email

The interview invitation email is the formal invitation that HR or the employer sent to the candidate. In this case, the admin or HR manager has to send a formal letter that includes position information, candidate name, interview date, time & location, roles, and responsibilities, etc. Always remember to add thank you for applying for the position. 

  • HRIS(Human Resource Information System)

HRIS = Human Resource Information System. It is software used for HR processes. This system is used to collect employee data, tracking of data, analyze data, self-service for employees, training of employee improvement, etc. This software can be used to store employee data of different departments. This can be used in future activities such as work management, new employee hiring, appraisal calculation, etc.  

  • Gray Collar Employee

Grey Collar Workers or employees are persons who work in a job that includes manual labor with specific technical skills. Considering that, a job like paralegals, firefighters, police officers, and healthcare professionals fall in this category. They don’t have an office or desk to work on, and they may require a uniform. As technology and automation increase, these posts are decreasing. 

  • Leave Rejection Email

After applying for leave, whether it is approved or rejected, it is sent in the mail. In a reply to an email for leave, if there is no from admin or HR is called a leave rejection email. This mail is written in a formal way from the employer or HR to the employee to let them know that the leave application is rejected. Denying a request needs more polite words and a positive tone and it remains simple & concise. 

  • Fixed Pay

Fixed salary means the amount anyone earns in the job after a month. It is considered after the exclusion of r allowances like transportation, variables, bonuses, commissions, wage supplements, benefits, and HRA. It is counted with the EPF and tax deduction. It is guaranteed compensation that an employer provides to a worker. 

  • Experience Letter

What is experience letter? A letter that defines an employee’s experience in a particular organization. This letter is provided by the organization when an employee leaves the job. The experience is counted with the total time span spent in the company. It is a very important document throughout the employee journey as it is proof of previous experience of the employee. This is a formal document and the joining date, leaving date, position, etc are mentioned in that. 

  • Hiring Manager

Who is hiring manager? The hiring manager is the person who hires new employees into the organization. Who initiates the job hiring position process after checking the vacant one in the company? Anyone can be a hiring manager, it depends on the size of the organization. 

  • Employment History

An employment history meaning is- a record of all the information about the employee. It includes all the past information such as experience, organization name, job role, job description, etc. You can check gaps, compensation, promotions, etc in employment history.  

  • Cost Overrun

Cost overrun meaning is budget overrun. When there is a situation where the cost of the project gradually increases what was estimated for known as cost overrun. This situation happened due to underestimating the cost of a business or project. This is common in IT projects, infrastructure, and buildings during their completion phase. 


Here we mentioned, the most popular HR concepts when you work in HR. This post may help you for a better understanding of some elements of the HR professional’s job.

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