Five HR terms you might not know (part 2)

July 7, 2021

Whether you’re a seasoned HR veteran, or just a busy office manager trying to stay on top of your growing employee database, people will always think that you’re a living, breathing HR dictionary.

It’s why, a while back, I wrote a piece called “Five HR terms you might not know”.

Well, I’m back – and this time with part two. Because no matter how good you are at your job, there are bound to be plenty of HR terms you still don’t know. Let’s see if any are on this list!

1.   Gag clause

Not to be confused with a gagging order, which is typically a legal order imposed by a court or government – often to suppress the media from reporting something.

A gag clause is a clause sometimes found as part of an employment contract. It restricts employees from disclosing your company’s trade secrets, such as your assets, the way you operate, your proprietary information or even future innovations.

You may think this sounds like a non-disclosure agreement, and it is similar. But a non-disclosure agreement (NDA) is deeper and more specific, generally going into deep detail about what can and cannot be disclosed. A gag clause, on the other hand, tends to be more general and wider-reaching.

2.   Broadbanding

Broadbanding is an alternative pay structure, which is somewhat disconnected from the organisational hierarchy. Whereas traditionally, a pay rise may be associated with a promotion, with a broadbanding pay structure, the pay rise is simply associated with a person’s duties, skills and performance.

With a broadbanding pay structure, employees find that there is more opportunity for salary and skill growth – but less prestige associated with title and ranking.

Broadbanding is a very flexible pay structure, and in theory, there is greater opportunity for an employee’s wage to increase, as they do not have to formally climb a career ladder. This pay structure is becoming more popular as we find ourselves moving away from the command and control hierarchy.

3.   Pareto chart

A pareto chart is often described as one of the most essential tools of quality control. For this reason, it is used in many areas where data needs to be analysed, and issues prioritised – from customer service to sales, and yes, even HR.

A pareto chart will take a list of contributing factors, and rank them in order of most frequent. There is a slightly more complicated formula to it than this, but in a nutshell, that’s what it does.

So in an HR context, a pareto chart might help you to understand why employees are leaving your organisation – be that due to pay, due to culture, or due to better offers from competitors. Using the pareto chart helps you focus on the areas which will make the biggest difference to whatever you’re trying to achieve, such as reducing employee turnover.

4.   360 degree feedback

Traditionally, performance management relies on two-way appraisals. These involve an assessment from a line manager, and a self-assessment from the employee.

360 degree feedback is a more modern approach to appraising employee performance, which takes into account the views of other employees. For example, the direct – or even indirect – colleagues of the person being appraised.

360 degree feedback is thought to be a better way to appraise performance in many ways, as it is less subject to the kinds of bias that come with an authority assessment (line manager) and a self assessment (employee). However, one risk is that colleagues may not know enough about the employee to assess their performance well – so 360 degree feedback is usually an extra perspective, rather than a sole appraisal method.

The People HR system has its own 360 degree feedback functionality built into its performance management module, which you can try for free now.

5.    Unconscious bias (or subconscious bias)

You know what bias is. Unconscious bias is when your biases influence your decisions without you realising. For example, if you have made an internalised judgement about particular people or demographics, then this may impact the way you treat them.

In HR, unconscious bias is most problematic at the recruitment stage. But it can of course impact everything from pay and performance reviews, to disciplinary hearings.

Unconscious bias can be especially worrying when it influences how you treat candidates or employees on the basis of the nine protected characteristics of discrimination, as this could land you in legal trouble.

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