Glossary of Terms



  • Absenteeism Policy. A policy about attendance requirements, scheduled and unscheduled time off, and measures for dealing with workplace absenteeism. Repeated absenteeism can lead to termination.
    • Scheduled time off: Excused absences from regular work hours scheduled in advance by an employee for such things as vacation, medical appointments, military service, jury duty, etc.
    • Unscheduled time off: Absence from work during regular work hours that was not scheduled in advance by the employee (e.g. sickness). Absences are generally accepted and sometimes compensated if their frequency and rationale fall within an organization's attendance policy.
  • Administrative Services Only (ASO). The hiring of a firm (usually a healthcare vendor) to handle certain administrative tasks. The firm does not assume any risk, but merely carries out the specialized functions that the employer cannot or does not want to do. For example, an employer funds its own dental insurance claim payments but pays the ASO firm to process the claims.
  • Affirmative Action. Proactive policies aimed at increasing the employment opportunities of certain groups (typically, minority men and/or women of all racial groups). Title 5, Section 503 of the Rehabilitation Act requires that affirmative action be taken in employment of persons with disabilities by Federal contractors. Affirmative action was designed to rectify past discrimination but has been controversial since its inception.
  • Affirmative Action Plan (AAP). A written set of specific, results-oriented procedures to be followed by all federal contractors holding contracts of $50,000 or more and employing 50 or more people and intended to remedy the effects of past discrimination against or underutilization of women and minorities. The effectiveness of the plan is measured by the results it actually achieves rather than by the results intended and by the good faith efforts undertaken by the contractor to increase the pool of qualified women and minorities in all parts of the organization. (SHRM Glossaries)
  • Americans with Disabilities Act (ADA). Title I of the Americans with Disabilities Act of 1990 and the ADA Amendment Act of 2009 are both part of a federal law that prohibits discrimination against someone with a disability, defined as “a physical or mental impairment that substantially limits a major life activity." Disability is decided on a case-by-case basis and does not include conditions such as substance abuse. This law applies to the whole employment cycle, from application through advancement and termination.
  • Attrition. A gradual voluntary reduction of employees (through resignation and retirement) who are not then replaced, decreasing the size of the workforce.


  • Background Screening / Pre-employment Screening. Testing to ensure that employers are hiring qualified and honest employees and that a prospective employee is capable of performing the functions required by the job. The screening can involve criminal background checks, verification of Social Security numbers, past addresses, age or year of birth, corporate affiliations, bankruptcies, liens, drug screening, skills assessment and behavioral assessments. If an employer outsources pre-employment screening, the Federal Fair Credit Reporting Act requires that there must be a consent and disclosure form separate from an employment application.
  • Base Wage Rate (or base rate). The monthly salary or hourly wage paid for a job, irrespective of benefits, bonuses or overtime.
  • Balanced Scorecard. A strategic planning and management system that is used to tie business activities to the vision and strategy of the organization, improve internal and external communications and monitor performance against goals. Developed in the early 1990's by Drs. Robert Kaplan and David Norton, the balanced scorecard measures four areas of business: internal business processes, financial performance, customer knowledge and learning and growth.
  • Benchmark Job. A job commonly found in the workforce for which pay and other relevant data are readily available. Benchmark jobs are used to make pay comparisons and job evaluations.
  • Benchmarking. A technique using specific standards to make comparisons between different organizations or different segments of the organizations, with the intent of improving a product or service.
  • Behavioral interview. An interview technique used to determine whether a candidate is qualified for a position based on their past behavior. A behavioral interview is a job interview focused on discovering how an applicant acted in specific employment-related situations.
  • Behavioral competency. The behavior qualities and character traits of a person. These act as markers that can predict how successful a person will be at the position he or she is applying for. Employers should determine in advance what behavioral competencies fit the position and create interview questions to find out if the candidate possesses them.
  • Branding. Promoting a product or service by identifying and then marketing its key differentiators from competitors. The differentiators often inspire the name, phrase or logo for which the product or service becomes known.
  • Broadbanding. A pay structure that exchanges a large number of narrow salary ranges for a smaller number of broader salary ranges. This type of pay structure encourages the development of broad employee skills and growth while reducing the opportunity for promotion.
  • Bumping. Giving long-standing employees whose positions are to be eliminated the option of taking other positions within the company that they are qualified for and that are currently held by employees with less seniority.
  • Business Process Outsourcing (BPO): The managing of an organization’s business applications by a technology vendor.


  • Change Management. A deliberate approach for transitioning individuals or organizations from one state to another in order to manage and monitor the change. Change management can be conducted on a continuous basis, on a regular schedule (such as an annual review), or when deemed necessary on a program-by-program basis.
  • Compensation. Compensation is the total reward received by an employee in exchange for services performed for an organization. It can include both direct pay (salary and wages) and indirect pay (benefits programs).
  • Competency-based Pay. Competency-based pay, alternately known as skill-based and knowledge-based pay, determines compensation by the type, breadth and depth of skills that employees gain and use in their positions.
  • Competency Modeling. A set of descriptions that identify the skills, knowledge and behaviors needed to effectively perform in an organization. Competency models assist in clarifying job and work expectations, maximizing productivity and aligning behavior with organizational strategy.
  • Confidentiality Agreement. An agreement between an employer and employee in which the employee may not disclose proprietary or confidential information.
  • Contingency Recruiting (Search). Contingency recruiters conduct frontline talent searches and represent either employers or individuals seeking placement. Contingency firms are not paid unless a candidate is successfully placed.
  • Contingent Staff. Temporary staff that supplements a company’s workforce. Contingent staff may be hired through a staffing firm. Businesses that have fluctuating seasonal staff demands or are in need of temporary call center representatives often use contingent workers.
  • Conversion Rate. A conversion rate is defined as the relationship between visitors to a website and actions considered to be a ‘conversion,’ such as a sale or request to receive more information. A 2006 study by WebSideStory showed the following conversion stats for these major search engines: AOL traffic – 6.17%; MSN traffic – 6.03%; Yahoo traffic – 4.07%; and Google traffic – 3.83%. Search Engine Optimization (SEO) is far less expensive than an aggressive paid search campaign and gets you the same amount of traffic. Plus, the effects are longer lasting and conversions are frequently in the same range (or even higher) than paid ads on engines.
  • Core Competencies. The particular set of strengths, experience, knowledge and abilities that differentiate a company from its competitors and provide competitive advantage. Employees should possess these qualities in order to advance business goals.
  • Cost-Benefit Analysis. The ability to measure the costs associated with a specific program, project or benefit. The cost is then compared to the total benefit or value derived.


  • Disciplinary Procedure. A standardized process that an organization commits to when dealing with an employee who has breached the terms of employment in some way or who has violated an organization’s rules or expectations of behavior. If this procedure is not standardized and fair, the organization may face discrimination or other legal charges.
  • Discrimination. The unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age or sex.
  • Distance Learning. Educational programs using instruction via video or audio recordings, internet, etc. instead of the traditional classroom setting at a centralized location.
  • Due Diligence. In mergers and acquisitions, the process of carefully investigating the details of an investment or purchase to assess risk and potential value and reward.


  • EAP. An employer-sponsored program that is designed to assist employees whose job performance is being adversely affected by such personal stresses as substance abuse, addiction, marital problems, family troubles and domestic violence. For every dollar invested in an EAP, employers save approximately $5 to $16. The average annual cost for an EAP ranges from $12 to $20 per employee. Source: US Department of Labor.
  • E-Recruitment. Web-based software that handles the various processes included in recruiting and onboarding job candidates. These may include workforce planning, requisitioning, candidate acquisition, applicant tracking and reporting (regulatory or company analytics).
  • E-Learning. E-learning is a method of education via the Internet or other computer related resources. It presents just-in-time information in a flexible learning plan. E-learning can be combined with face-to-face courses for a blended learning approach.
  • Emotional Intelligence. Emotional Intelligence (EI) describes the ability, capacity, skill or (in the case of the trait EI model) a self-perceived ability to identify, assess and manage the emotions of one's self, of others and of groups.
  • Employee Assessments. Tests used to help employers in pre-hire situations select candidates best suited for open positions. These tests are also used to identify development opportunities for employees, assist managers in becoming more effective and promote people into appropriate positions. Typical assessments often measure personality, aptitude and/or skills.
  • Employee Engagement. “... a heightened emotional and intellectual connection that an employee has for his/her job, organization, manager, or co-workers that, in turn, influences him/her to apply additional discretionary effort to his/her work.” (The Conference Board study of employee engagement, 2006)
  • Employee Relations. Developing, maintaining and improving the relationship between employer and employee by effectively and proactively communicating with employees, processing grievances/disputes, etc.
  • Employee Retention. Practices and policies designed to create a work environment that makes employees want to stay with the organization, thus reducing turnover.
  • Employment Branding. A strategy designed to make an organization an appealing place to work. This targeted marketing effort utilizes both print and Internet tactics and attempts to shape the perceptions of potential employees, current employees and the public /investment community.
  • Empowerment. Giving employees the resources, skills and authority necessary to share power with management and make decisions. Employees are then held accountable for their decisions and rewarded if appropriate.
  • Enterprise Compensation Management (ECM). The automation of the compensation process to assist organizations in the acquisition, management and optimization of its workforce.
  • Equity Theory. The idea that people desire to be treated fairly and thus compare their own contributions to the workplace – and resulting rewards – against those of their coworkers to determine if they are being treated fairly.
  • Executive Coaching. Executive coaching is a professional relationship between a Coach and an Executive, or an Executive Team. The goal is to assist executives with positive leadership development.
  • Executive Search. An agency or organization used by employers to assist them with the selection and placement of candidates for senior-level managerial or professional positions.
  • Exempt Versus Non-Exempt Employees. The difference between exempt and nonexempt employees is who gets paid overtime and who doesn't. The U.S. Department of Labor specifically designates certain classes of workers as exempt, including executives, administrative personnel, outside salespeople, highly skilled computer-related employees, doctors, lawyers, engineers, etc. Managers who hire and fire employees and who spend less than half their time performing the same duties as their employees are typically also exempt employees. In general, the more responsibility and independence or discretion an employee has, the more likely the employee is to be considered exempt. Generally, any worker performing repetitive tasks is most likely nonexempt and must be paid overtime.
  • Exit Interview. The final meeting between management, usually someone in the HR department and an employee leaving the company. Information on why the employee is leaving is gathered to gain insight into work conditions and possible changes or solutions.


  • Flexible Work Arrangements. Schedules that allow employees to structure their work hours around their personal responsibilities. Examples include flextime, job sharing, telecommuting and a compressed workweek. Home sourcing has become a popular flexible work concept in recent years. In this arrangement, employees work full-time from their homes.
  • Forced Ranking. Also known as a vitality curve, this is a system of work performance evaluation in which employees are compared against each other instead of against fixed standards. Based on the “20/80 Rule,” 20% of employees do 80% of the meaningful, productive work; the top 20% of workers are rewarded and, oftentimes, the bottom 10% are fired.
  • Functional Job Analysis. Developed by the U.S. Department of Labor, functional job analysis is a method of gathering specific and detailed job information. This information can be used to write job descriptions.


  • Goal Setting: Assigning specific, attainable goals to a person, team or organization. Goal setting is a motivational technique, as workers often rise to the challenges given them.
  • Group Dynamics: The way that people interact within a group that determines how it functions and how effective the group is.


  • HR Audit. An HR audit examines the major aspects of human resource management performed and not performed by the organization and identifies strengths, weaknesses and corrective action.   The HR audit is a sampling; not every situation or instance can be examined
  • HR Generalist. An individual who is able to perform more than one diversified human resources function, rather than specializing in one specific function.
  • Human Capital. The collective skills, knowledge and competencies of an organization’s people that enables them to create economic value.
  • Human Capital Management. The challenge of recruiting and retaining qualified candidates and helping new employees fit into an organization. The goal is to keep employees contributing to the organization’s intellectual capital by offering competitive salary, benefits and development opportunities. The major functions of human capital management include Recruitment, Compensation, Benefits and Training.
  • Human Resource Information System (HRIS). Business software systems that assist in the management of human resource data (e.g., payroll, job title, candidate contact information). Some of the larger HRIS platforms include SAP and Peoplesoft.
  • Human Resource Outsourcing (HRO). A contractual agreement between an employer and an external third-party provider whereby the employer transfers responsibility and management for certain HR, benefit or training-related functions or services to the external provider.


  • Incentive Pay. Additional compensation used as a motivational tool to exceed specified work goals.
  • Individual Employment Agreement. A written document that describes the legal relationship between an employer and employee.
  • Industrial Relations. A field of study that examines the relationship between employer and employees, particularly groups of workers in unions.
  • Intangible Rewards. A subjective benefit that has no monetary value, such as praise for excellent performance.
  • ISO 9000. A set of internationally-accepted standards, created by the International Organization for Standardization, for quality management and quality assurance. These standards apply uniformly across all industries and company size. Companies can receive ISO 9000 certification for meeting these standards.


  • Job Analysis. The process of gathering information about the requirements and necessary skills of a job in order to create a job description.
  • Job Description. A written statement that explains the responsibilities and qualifications of a given job, based on a job analysis. The job description usually includes specific required tasks, as well as an overview of the position and whom the employee reports to.
  • Job evaluation. A comparison of one job with other jobs in a company for the purpose of assessing fair compensation.


  • Key Performance Indicators (KPIs). Tasks that are central to the success of a business and show, when measured, whether the business is advancing toward its strategic goals.
  • KSAs. The knowledge, skills and abilities an employee needs to meet the requirements of a job.


  • Leadership Development. Activities, whether formal or informal, that enhance and develop leadership qualities.


  • Matrix organization. Used primarily in the management of large projects, a horizontal authority structure in which teams are created from various departments and report to more than one boss.
  • Mentoring. An informal training process between a more experienced employee and a junior employee.
  • Mission Statement. A description of an organization’s purpose: what it does, what markets it serves and what direction it is going in.


  • "Non-Traditional" versus "Traditional" Employee Benefits. Traditional benefits include life, retirement, health and disability benefits. Non-traditional benefits include various types of life management benefits such as EAPs, child and elder care, counseling and referral, etc. (see life management benefits). According to the U.S. Chamber of Commerce, health insurance is the most expensive single benefit cost, accounting for about 20% of total benefits, or about $2,666 per employee on average (as per a 1999 study.)


  • Observational Interview. A method of assessing job requirements and skills by observing the employee at work, followed by an interview with the employee for further assessment and insight.
  • Onboarding. The process of moving a new hire from applicant to employee status, ensuring that paperwork is done, benefits administration is underway and orientation is completed. Onboarding involves reinforcing the candidate’s decision to join your organization, empowering them with information to understand the organization and vision and reinforcing the attitude and behaviors to set them up for success on the job.
  • Organizational Culture. The values, attitudes, beliefs and behaviors that characterize an organization. It is the unwritten workplace ethos that is picked up by new employees.
  • Organizational Development. A planned organization-wide effort to improve and increase the organization’s effectiveness, productivity, return on investment and overall employee job satisfaction through planned interventions in the organization's processes.
  • Orientation. Introducing new hires to the organization and its policies, benefits and culture. Training and familiarization with each department are sometimes included.
  • Outplacement. A benefit offered by a downsizing employer to assist former employees in re-entering the job market. Assistance can include job training, resume workshops, interview practice and career counseling.
  • Outsourcing. Contracting out non-core functions, such as payroll, benefits administration or manufacturing, to save money and focus on what the company does best.


  • Payroll. Documentation created and maintained by the employer containing such information as hours worked, salaries, wages, commissions, bonuses, vacation/sick pay, contributions to qualified health and pension plans, net pay and deductions.
  • Peer appraisal. A performance assessment given by an employee’s peers who have observed the employee’s job performance.
  • Performance Appraisal. A periodic review and evaluation of an individual's job performance.
  • Performance Improvement. A plan to improve an employee’s performance in which the performance problem is identified, modified and monitored.
  • Performance Management. The process of maintaining or improving employee job performance through the use of establishing job expectations, performance assessment tools, coaching and counseling. The ultimate goal is to better meet organizational objectives.
  • Performance Planning. An organization-wide plan to manage employees and their performance wherein expectations are established and understood, goals are set for employees, departments and the organization as a whole.


  • Quality Management. A system to make sure that a product or service meets standards of excellence, and that the process by which the product or service is created is efficient and effective as well. The three key components of this system are quality control, quality assurance and quality improvement.


  • Random Testing. Employer-administered drug and alcohol tests conducted at random intervals.
  • Recruitment. The process of finding and hiring the best-qualified candidate for a position.
  • Recruitment Process Outsourcing (RPO). The outsourcing of the recruiting process to a third party.
  • Redundancy. Eliminating jobs or job categories as they become unnecessary to the functioning of an organization.
  • Replacement Charts. A tool in succession planning in which current and future job vacancies, as well as the number of employees in currently filled jobs, are visually summarized.
  • Request for Proposal (RFP). A request sent by a company to a vendor to submit a bid for a product or service. The bid includes a timeline, a description of the good or service, the type of contract, cost and other specifics.
  • Return on Investment (ROI). The percentage of profit on an investment compared to the cost of that investment.  this is also called the rate of return or yield.
  • Risk Management. The use of insurance and other strategies to minimize an organization’s exposure to liability in the event a loss or injury occurs.


  • Social Media. Internet sites and services that allow users to generate and exchange content and interact with each other in a variety of ways. Forums, podcasts, bookmarking, blogs and social networking sites are types of social media. These types of interaction can be used for collaboration, communication and entertainment. HR professionals use social media to source candidates and create peer networks.
  • Social Networking. The building of online communities of people who have common interests. LinkedIn, Facebook and MySpace facilitate these interconnected systems. HR departments have begun to incorporate social networking into the recruiting process as a means to attract and evaluate candidates.
  • Sourcing. The developing of lists of potential candidates. This also relates to the task of requisitioning (or creating job descriptions), approval workflows and actual job postings. Most e-recruitment software providers include modules for requisitioning.
  • Staffing. A method of finding, evaluating, and establishing a working relationship with future employees. They may be current employees or future employees.
  • Strategic HRM. Aligning human resource management (HRM) with the strategic goals of an organization.
  • Strategic Planning. The process of considering an organization’s future, usually three to five years ahead and then working backward to create strategic plans and allot resources to realize this desired future state. This includes a hiring strategy.
  • Succession Planning. The process of identifying long-range needs and cultivating a supply of internal talent to meet those future needs. This is used to anticipate the future needs of the organization and assist in finding, assessing and developing the human capital necessary to the strategy of the organization.


  • Talent Management. Also called Human Capital Management, the process of recruiting, managing, assessing, developing and maintaining employees.
  • Tangible Rewards. Gifts in the form of merchandise, gift certificates, etc. that can be physically held or touched.
  • Total Remuneration. An employee’s complete annual pay package, including benefit and pension plans, bonuses, incentives.
  • Training and Development. Providing information and instruction that equips employees to better perform specific tasks or attain a higher level of knowledge.
  • Training Needs Analysis. An assessment to determine the training needs of a group of employees, taking into account the employees’ prior education and skills and the desired outcome once training is completed.
  • Turnover. The number of employees lost and gained over a given time period.


  • Wage Drift. The difference between basic pay and total earnings, due to a variety of possible factors such as overtime, bonuses, gender, age and performance.
  • Work-life Balance. The attempt to balance work and personal life in order to have a better quality of life. A person with a balanced life is an asset to his or her business, as he or she experiences greater fulfillment at work and at home.
  • Work/Life Employee Benefits. Work/Life benefits are "non-traditional" employee benefits that assist employees in managing their lives. Employers purchase these services from vendors and they are offered to employees as benefits. These services can make the difference in attracting and retaining employees. Common life management benefits include child and elder care referral services, employee assistance program (EAP), concierge, legal assistance and emergency back-up childcare.
  • Workforce Planning. The assessment of the current workforce in order to predict future needs. This can consist of both demand planning and supply planning. Many e-recruitment software providers include modules for workforce planning.


  • 360 Degree Feedback. "360" refers to the 360 degrees in a circle, with an individual figuratively in the center of the circle. Feedback is provided by subordinates, peers and supervisors. It also includes a self-assessment and, in some cases, feedback from external sources such as customers and suppliers or other interested stakeholders. The results from 360-degree feedback are often used by the person receiving the feedback to plan training and development.