In Korea, they have nicknames for almost every person, depending on their age and relation to you. So you should always use the person's "honorific" (formal name) unless that person gives you direct permission to use their informal word of address.
Honorifics describe a type of grammar that changes noun and verbs to show respect to elders as well as to people who are older than you. In English, we use words such as Mr., Ms., or Dr. to show respect. But in Korean, these words can change like oppa, which means older brother, to orabeoni.
Honorifics have been around since the beginning of Korean history. The idea comes from the Chinese philosophy of Confucianism. With the arrival of Confucianism in Korea, status started playing an important role in Korean society. In order to differentiate themselves, the upper class started forcing the lower class to use these titles when addressing their superiors.
Because honorifics have been so ingrained into Korean culture, not using the proper honorifics is offensive. Using honorifics shows that you respect the other person. The concept is confusing for most foreigners when they learn Korean.