Buyers guide

HR Glossary


360 Survey: Evaluation where an employee is rated by surveys distributed to everyone with whom he works, including coworkers, supervisors, and consumers.

401(k) Plan: Employer-sponsored retirement plan. Either a defined benefit plan, where an employer, pays certain benefits to retirees, or defined contribution plan, where an employer makes certain contributions to employee’s retirement fund. Request a Proposal.

Administrative Services Only (ASO): Firm that provides specific administrative services, as in a self-insured company hiring a claims administrator.

Agent: Employee of an insurance company who sells only for the originating company, does not sell other insurance companies’ products.

Application Service Provider (ASP): Business that offers space on their computer servers for a fee, and rent such space as the software on it to other businesses.

Absent or Absence (Scheduled Time Off): Scheduled time when an employee is not at work during a scheduled period.

Absent or Absence (Unscheduled): Unscheduled time when an employee is not at work during a scheduled work period.

Absenteeism Policy: Organization’s published policy about how chronic absences will be handled.

Agile Organization (Agility): Organization that is quick to respond to changing circumstances in the marketplace or within the organization.

The Americans with Disabilities Act: Law making it unlawful for employers of 15 or more people to discriminate against a qualified individual with a disability.

Applicant Tracking System (ATS): Recruitment software program used to post job openings on the employer’s website or job bulletin board.

Assessment Testing: Tests used in pre-hiring situations to help organizations hire the right candidate for the position.

Attendance and Attendance Policy: Published expectations of employee attendance.

Baby Boomers: Generation born in “baby boom” between 1944 and 1964.

Background Checking or Background Investigation: Screening conducted before hiring an applicant, includes not only a criminal background check but also validating important information such as Social Security number and other identifying information, as well as prior employment. If the screening is outsourced, the Fair Credit Reporting Act requires a separate disclosure and consent form from the job application.

Behavioral Interview: Interview designed to determine if an applicant has the necessary traits for a job, asks applicants to pinpoint successes in specific areas in the past.

Benefits: Compensation in addition to an employee’s base salary, possibly including health insurance, dental benefits, life insurance, disability coverage, severance, tuition assistance and other “non-cash” incentives.

Bereavement Policy: Written guidelines covering paid leave during bereavement.

Broad banding: Creating wide bands of compensation for each level or group of employees, so that a top employee in one area or level may make more than a new employee in a “higher” level.

Broker: Individual who acts as an agent for both buyer and seller and charges commission for services.

Business Casual Dress Code: Dress code allowing employees to wear more informal, relaxed clothing while maintaining a businesslike appearance.

Business Process Outsourcing (BPO): Allowing an outside vendor to manage your business’s administrative applications.

Cafeteria Plan: Plan offering employees a variety of benefits, from which they can choose only those they need.

Carve-Out: Opting out of one particular service with the regular vendor (e.g., vision care) and contracts with another vendor for just that service.

Change Management: Developing a specific strategy to deal with necessary and unavoidable change within an organization.


Coaching: Providing useful and constructive feedback to employees to help them improve and/or continue in the areas where they are performing well.

COBRA:Consolidated Omnibus Budget Reconciliation Act (1985): Federal law requiring employers to continue offering health insurance to employees who leave the company, and to their beneficiaries.

Contingent Staff: Temporary staff, usually hired through a firm, to supplement an employer’s existing workforce, as in the case of seasonal staff or temporary call center employees during a heavy demand period.

Counseling: Providing consistent, daily feedback to employees about how and where to improve their performance.

Cost-Per-Hire: All costs related to recruiting and hiring a new candidate, including advertising, agency fees, relocation, and training.

Culture: The underlying beliefs and behaviors of a group of people who have developed a working relationship and built a set of unwritten guidelines for working together.

Defined Benefit Plan: Retirement plan in which employees receive a lump-sum amount calculated according to such factors as age, earnings, and time with the company.

Defined Contribution: Retirement plan in which the contribution amount is clearly defined, usually as a percentage of the employee’s salary.

Department: Divisions within an organization, usually organized by function.

Disability: Inability to execute all or some of the duties of your assigned employment due to accident or illness, whether or not caused by the job.

Disability Income Insurance: Benefits paid to a policyholder who becomes disabled and loses income due to inability to work.

Discipline: Set of progressive remedies used to deal with job-related behavior that falls short of the standards communicated to the employee.

Downsizing: Reducing the number of employees in an organization. Also known as a reduction in force.

Dress Code: Written expectations of attire at work.

Dress Code for Business Casual: Written expectations for attire, particularly directed at “business casual” attire.

Drug-Free Workplace: Organization where the employer has specific policies and procedures to make sure employees are not using illegal drugs or under the effect of substances, legal or illegal, during their working hours.

EAP: Employee Assistance Program, offered by employers to help employees who are having difficulties at work because of personal issues such as substance abuse, family troubles and the like.

Equal Employment Opportunity Commission: Federal agency responsible for enforcing laws against discrimination in the workplace.

Employee Empowerment: Giving employees the permission and ability to make decisions and act autonomously for the good of the company.

Employee Involvement: Giving employees input and allowing them an impact on decisions affecting their jobs.

Employment Eligibility Verification (I-9): Form required by Department of Homeland Security to verify and document an employee’s eligibility for employment in the United States.

ERISA (Employment Retirement Income Security Act): Federal law governing employee pension plans. ERISA requires plans to provide participants with certain information and establishes requirements for fiduciary management of plans.

Exempt Employee: Employee, usually salaried, who is exempt from overtime according to the Fair Labor Standards Act because of his or her duties, responsibilities and decision-making status.

Fair Labor Standards Act: Law established in 1938 to set standards for minimum employment wage and overtime pay, as well as child labor.

The Family and Medical Leave Act: Law requiring covered employers to provide eligible employees with up to 12 weeks of unpaid leave within any 12-month period. All public employers are covered, as are private employers with 50 or more employees.

Flexible Spending Accounts (FSA): Account in which employees can set aside part of their pre-tax earnings for allowable healthcare and/or dependent daycare expenses.

Flexible Work Arrangements: Flexible work schedules that allow employees to work around their personal responsibilities, such as flexi-time or job sharing.

Garnishment: Legal procedure requiring withholding of employee’s earnings, by court order, for payment of debt such as child support.

Human Capital Management: Recruiting and retaining qualified employees, helping new employees integrate into the organization, and keeping current employees satisfied and contributing.

Human Resource Development: Helping employees improve in their jobs and become more effective, by training, career development, coaching, etc.

Human Resource Management: An organization’s team focusing on recruiting, managing, and directing employees.

Human Resources Information System: Software solution to manage the data entry and tracking, as well as information and reporting needs, of the Human Resources department or management team. Maybe stand-alone software or an online solution.

Human Resources Outsourcing (HRO): Contracting with a third-party provider to manage certain HR services and functions. Request a Proposal.

Independent Contractor: Person or business performing services or producing outcomes or products for another person or business under contract.

Induction: Orientation, during which new employees are given the information they need to know how the organization works and how their position fits into the organization.

Interview: Meeting with a potential employee to determine the fit between the employer and the candidate for a particular position.

Job Analysis: Process of collecting information about a particular position, including responsibilities, necessary skills, outcomes and work environment.

Job Description: Written statements describing the duties, responsibilities, contributions and expectations of a specific position.

Job Offer Letter: Document confirming a job offer and restating the details of the offer, including position, description, salary, benefits, etc.

Key Cost: The figure used to describe the principal costs of running a company.

Key Performance Indicators: Measures of a company’s performance in certain areas. These indicators are specific and measurable.

Knockout Option: Option that loses all value when a principle commodity reaches a certain price level.

Knowledge Assets: Intangible assets of a company, specifically knowledge, expertise, information, ideas and related assets.

Knowledge Integration: Combining information from separate sources into one unified data storage system.

Knowledge Management (KM): Using knowledge to improve the performance of individuals and the organization as a whole.

Knowledge Mapping: Creating a summary of the information and knowledge a company will need to reach its stated goals.

Learning Organization: As defined by Peter Senge, “organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together.”

Letter of Resignation: Letter from an employee terminating employment with the company.

Millennial: Employees born between 1980 and 2000. Millennials have different attitudes and outlooks than Generation X and Y employees.

Minimum Wage: Federal minimum wage for covered nonexempt employees, currently $5.15 an hour.

Mission Statement: Description of what an organization does and why it does that.

Negativity: Expressing unhappiness and other negative thoughts, often accompanied by resistance toward work and responsibilities to the company.

Networking: Building a group of contacts or relationships for the benefit of both members of the relationship.

Non-Exempt Employee: Employee (usually not salaried) subject to all Fair Labor standards Act provisions, including overtime.

“Non-Traditional” vs “Traditional” Employee Benefits: Traditional benefits generally include insurance, both life and health, retirement and disability benefits. Non-traditional benefits include all other benefits, including EAP, child care, counseling, etc.

Offshoring: Moving certain job responsibilities to offsite locations to save money on labor costs.

Onboarding: Making a successful candidate an employee, including completing all paperwork and orientation.

Open Door Policy: Manager’s door is open to every employee to encourage communication.

Optimism: Looking at the positive or upside of every situation.

Outsourcing: Paying an outside organization or individual to perform normally internal business processes, such as payroll.

Paid Time Off Policy: Written guidelines for time off, including vacation, sick days and personal days.

Personnel File Access Policy: Policy outlining what documents an employee may view in their own personnel file.

Plan Sponsor: Organization maintaining a benefits plan, such as an employee-sponsored health insurance plan.

Professional Employer Organization (PEO): Staffing service that hires and retains legal responsibility for employees, who physically work for another company. Request a Proposal.

Profit Sharing: Variable pay plan in which percentage of a company’s profits for the year are pooled and disbursed to all employees using a specific, predetermined formula.

Promotion: Advancing an employee from one position to another position with a higher salary.

Quartile: Percentile in a frequency distribution. The first quartile represents 25%, the second 50%, or the median, and the third 75%.

Quota System: Means of achieving desired balance in an affirmative action system, by hiring and/or promoting specified numbers or ratios of minorities or women in certain positions.

Recognition: Favorable attention or notice given to a specific employee.

Recruiter: Individual employed by a company to locate and qualify candidates for job openings in the company.

Recruiting/Recruitment: Finding and hiring a new employee.

Sexual Harassment: When one employee makes unwelcome sexual advances, requests for sexual favors, or otherwise creates a threatening work environment through sexual behavior toward another employee.

Self-Funded (Self-Insured) Plan: Healthcare plan in which larger employers pay their employee’s health care costs instead of using an outside insurer.

Severance Pay: Compensation offered to an employee leaving a company, which may include extended benefits, such as healthcare, and job placement assistance or resources.

Sexual Harassment Investigation: An investigation into sexual harassment charges in the workplace.

Sourcing: Creating lists of possible job candidates.

Strategy: The several major approaches a company will use to reach a certain goal.

Succession Planning: Planning to make sure that employees are recruited and hired for each key role, and can move into higher roles as those roles are vacated.

Tuition Assistance: Benefit provided by employers to allow employees to attend undergraduate or graduate classes.

Talent Management: Automation of various recruitment and hiring tasks.

Third Party Administrator (TPA): Organization that handles payment and administration of insurance for a self-insured company.

Training and Development: Providing employees with the knowledge and skills to perform their duties.

Unemployment Compensation: Created by the Social Security Act of 1935 and administered by each state. Designed to provide compensation to employees who lose their jobs through no fault of their own.

Variable Pay: Pay that changes based upon the circumstances, to reward employees for contributions beyond their normal job requirements.

Virtual HR:Technology that allows employees access to their HR information, insurance benefits, etc., for example through websites or kiosks.

Vision: A statement of what the company wants to become.

Voluntary Benefits: Benefits that the employee chooses, and pays for through payroll deduction, such as life insurance, dental coverage, etc.

Work/Life Employee Benefits: “Non-traditional” benefits that help employees in their personal lives, including child care and legal assistance.

Workforce Planning: Understanding the current workforce in order to plan for the future, including planning supply and demand.

Xers: Generation X’ers, born between 1965 and 1976-1980.

Year-End Closing: Financial reports released at the end of the fiscal year, summing up the year’s finances.

Zero-Balance Account: Bank account kept with a zero balance, into which funds are transferred automatically when there is a claim against the account.

Zero-Base Budgeting: Budgeting “from scratch,” when there is a reason to believe the previous year’s budget is not relevant to the new budget.