Pareto Principle

What is Pareto Principle?


The ‘Pareto Principle states that in most events, 20% of the causes lead to 80% of the effects. This ratio is also referred to as the ‘80/20 Rule’. It is also called the ‘Principle of Factor Sparsity’ as well as the ‘Law of the Viral Few’.


It is used in companies to concentrate their efforts on the most profitable 20% areas of the company and advance them so that it leads to a profit for the remaining 80% of the company too.


Similarly, it is also applied in reducing the risks of 20% of the most hazardous areas of the company so that the remaining 80% is also safeguarded as a result of the precautions taken.

More HR Terms

Abilene Paradox

What is Abilene Paradox ?    The ‘Abilene Paradox’ is the phenomenon where the collective decision of a group is in direct conflict with the

Parkinson’s Law of Triviality

What is Parkinson’s Law of Triviality?    ‘Parkinson’s Law of Triviality’ is the law that refers to the high amount of time and resources spent


What is Suspension?   The term ‘Suspension’ is used to denote the temporary removal of an employee from their current working position. The suspension might

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