Human Resource Glossary of Terms
Human Resource Glossary of Terms
This comprehensive glossary of human resource (HR) terms defines words and phrases frequently used by HR professionals.
- A -
Ability: A competence to perform an observable behavior or a behavior that results in an observable product.
Action item: Specific activity initiated to achieve an objective.
Adaptive device: Any tool that facilitates greater efficiency by an individual with a disability in the performance of duties.
Adverse impact: Adverse impact exists where a substantially different rate of selection in hiring, promotions, or other employment decisions works to the disadvantage of members of a protected group. An inference of adverse impact may occur in the absence of such data and is determined by calculating the extent of a group's representation or utilization in a given occupation based on the availability of its members in the relevant labor market.
Affected group (or class): Any group in the population shown to suffer the effects of past or present discrimination.
Affirmative action file: A file maintained by an agency to document affirmative action efforts.
Affirmative action officer: An individual in an agency who has primary responsibility for the development and maintenance of the agency's affirmative action plan.
American Indian/Alaskan Native: All persons having origins in any of the original peoples of North America who maintain cultural identification through tribal affiliation or community recognition.
Americans with Disabilities Act (ADA): Prohibits discrimination against persons with disabilities in employment, government programs, public accommodation, telecommunications, and transportation.
Applicant flow log: A chronological compilation of applicants for employment or promotion, showing the persons categorized by race, sex, and ethnic group, who applied for each job title (or group of job titles requiring similar qualifications) during a specific period.
Architectural barrier: Any non-job related consideration that excludes from employment individuals otherwise capable of doing the work at issue.
Availability standard: A percentage figure depicting the availability in the relevant labor market of a group who are qualified under valid, job-related criteria.
- B -
Back pay: Compensation for past economic losses (such as lost wages, fringe benefits, etc.), caused by discriminatory employment practices.
Barrier: Any obstacle to the realization of a person's full potential.
Black (Not of Hispanic Origins): All persons having origins in any of the black racial groups of Africa.
Bona fide occupational qualification (BFOQ): Any prerequisite that has been demonstrated to be valid as a qualification for employment.
Burden of proof: In discrimination cases, the plaintiff must show that an action, practice, or policy used by the employer has an adverse impact. Once adverse effect is shown, the burden of proof shifts to the employer, who must show that the action, practice, or policy is job related.
Business necessity: Under the Uniform Guidelines on Employee Selection Procedures, necessary to the safe and efficient operation of the business, that it effectively carries out the purpose it is supposed to serve, and that there are no alternative policies or practices which would better or equally well serve the same purpose with less discriminatory impact.
- C -
Career path: A career path identifies optimum alternative paths of employee progression to positions requiring successively higher levels of skill and the consequent promotional opportunities.
Chilling effect: Maintenance by an employer of a work environment or system of employment practices, the effect of which is to discourage minorities, women, or persons with disabilities from seeking employment or advancement.
Civil rights: Rights protected by the U. S. Constitution and various statutes that prohibit discrimination in employment, education, housing, voting, public accommodations, and other matters.
Civilian labor force: Persons 16 years of age or over, excluding those in the armed forces, who are employed or seeking employment.
Community outreach: Activities designed to contact appropriate community groups and persons for the purpose of recruitment.
Compliance: Adherence to laws, court decisions, regulations, executive orders, and other legal mandates governing affirmative action and equal employment opportunity.
Concentration: A higher representation of a group of persons in a job category than would reasonably be expected by their presence in the civilian labor force.
Conditions of employment: Includes, but is not limited to, salaries, wages, hours of work, vacation allowances, sick and injury leave, number of holidays, retirement benefits, insurance benefits, prepaid legal service benefits, wearing apparel, premium pay for overtime, shift differential pay, jury duty, and grievance procedures.
Congenital disability: Describes a disability that has existed since birth but is not necessarily hereditary.
Constructive discharge: An employee's involuntary resignation resulting from the employer making working conditions for the employee so intolerable that a reasonable person would have felt compelled to resign. An enforcement agency will assert that an employee was constructively discharged where it finds that 1) a reasonable person in the employee's position would have found the working conditions intolerable, 2) the employer's conduct that constituted the violation against the employee created the intolerable working conditions, and 3) the employee's involuntary resignation resulted from the intolerable working conditions.
- D -
Developmental disability: Any mental or physical disability that has an onset before age 22 and may continue indefinitely.
Direct threat: A significant risk; a high probability of substantial harm to the health or safety of the employee or others.
Disadvantaged: A descriptive term referring to those individuals whose access to the benefits of society is severely restricted.
Disparate effect: The tendency for a test, selection of job qualifications, or other employment practice to screen out or otherwise limit the employment opportunities of a certain group at a greater rate than others. Also called "adverse effect" or adverse impact."
Disparate treatment: Unequal treatment in employment opportunities because of one's race, color, religion, sex, age, ancestry, national origin, disability, or veteran's status. Also called "differential treatment."
- E -
EEO-1 Report: An annual compliance survey mandated by federal statute and regulations for certain employers subject to Executive Order 11246 or Title VII of the Civil Rights Act of 1964. The survey details the sex and race/ethnic composition of an employer's workforce by job category.
EEO-2 Report: The Equal Employment Opportunity Apprenticeship Information Report: A chronological list of names of all persons who have applied to an apprenticeship program. The information needed to fill out the report must be kept by the apprenticeship sponsor; however, the EEOC no longer requires the filing of EEO-2 reports.
EEO-3 Report: The Equal Employment Opportunity Labor Union Report: A report filed by labor unions, containing information on the sex and race/ethnic composition of union membership and referrals for employment.
EEO-4 Category: Any of the categories designated by EEOC Form 164: A - Officials/Administrators; B - Professionals; C - Technicians; D - Protective Services, Sworn; E - Protective Services, Non-Sworn; F - Administrative Support (including Clerical and Sales); G - Skilled Craft; H - Service/Maintenance.
EEO-4 Report: The Equal Employment Information Report (EEO-4): A report filed by state and local governments setting forth the sex and race/ethnic composition of the workforce by job category and annual salary. Frequency of reporting for political jurisdictions varies with their number of full-time employees.
EEO-5 Report: The Equal Employment Opportunity Elementary-Secondary Staff Information Report (EEO-5): A report detailing the sex and race/ethnic composition, by job category, of elementary and secondary school staffs. Frequency of reporting for school districts varies with their number of pupils.
EEO-6 Report: The Equal Employment Opportunity Higher Education Staff Information Report (EEO-6): A report filed by colleges and universities. It details by job category and salary the sex and race/ethnic composition of their faculty and staffs.
Employed: Under criteria established by the Bureau of the Census and the U. S. Department of Commerce, all civilians 16 years old and who were either : (a) "at work," meaning those who did any work at all during the reference week as paid employees or in their own business or profession, or on their farm, or who worked 15 hours or more as unpaid workers on a family farm or in a family business; or (b) "with a job but not at work," meaning those who did not work during the reference week but had jobs or businesses from which they were temporarily absent due to illness, bad weather, industrial dispute, vacation, or other personal reasons. Generally excluded from the category of employed are persons whose only activity consisted of unpaid work around the house or volunteer work for religious, charitable, and similar organizations, or person on layoff.
Employment at will: The traditional common law doctrine that, absent prior agreement to the contrary, an employer may discharge an employee any time for any reason not barred by the law. An employer's exercise of this power may be restricted by collective bargaining or other agreement, or by specific statutes, including those prohibiting discrimination on the basis of race, sex, or other factors. In some states, courts have imposed additional limits on employment at will by allowing claims for "wrongful discharge" in certain circumstances.
Equal employment opportunity: The right of all persons to work and to advance on the basis of merit and ability without regard to race, color, religion, sex, national origin, age, disability, veteran's status or other factors which cannot lawfully be the basis for employment actions.
Equal Employment Opportunity Commission (EEOC): The federal agency that enforces Title VII of the Civil Rights Act of 1964, as amended, and other federal civil rights laws.
Essential functions: A position's fundamental job duties that must be performed with or without an accommodation.
- F -
Facially neutral selection standard/criteria: A criterion or process is facially neutral if it does not make any reference to a prohibited factor and is equally applicable to everyone regardless of race, gender, or ethnicity; i.e., is not discriminatory on its face.
Formal training: A structured program to develop or increase job-related skills and abilities. Typically classroom training as well as on-the-job training fall into this category.
Fringe benefits: Employment compensation other than wages or salary, including, for example, annual and sick leave, medical insurance, life insurance, retirement benefits, profit sharing, and bonus points.
Front pay: Compensation for estimated future economic loss; generally calculated based on the difference between the victim's current pay (or for a rejected applicant, the pay he or she should have received) and the pay associated with the victim's rightful place. Front pay runs from the time of the settlement, hearing, or administrative or court order to a certain time in the future set by the settlement, hearing, or administrative or court order (usually when the victim attains his or her rightful place).
FTE (full-time equivalency): For affirmative action plan purposes, only positions occupied by an employee designated as "A" (active) in the SHARP system are used to calculate FTE. The percent of time worked is based on a standard of 100% or 1.0. For example, an employee who is working 60% and employee who is working 40% of the time would equal 100% or an FTE of 1.0.
Full-time position: Any employment position which requires 40 or more hours of work per week.
- G -
GED (General Education Development): A certificate recognized by a state's department of education as equivalent to a high school diploma.
Glass ceiling: An artificial barrier to the advancement of women and minorities to decision-making positions.
Goals: Goals are objectives for hiring and promoting protected group members in EEO categories to correct the lingering effects of past discrimination. Goals are flexible targets used to guide affirmative action efforts during the current plan cycle. Goals are not quotas and cannot be used to discriminate or exclude persons from employment opportunities through reverse discrimination.
- H -
Handicap: A condition or barrier imposed by society, the environment, or by oneself.
Harassment: Any repeated behavior, or combination of behaviors, by one or more employees toward another employee or group of employees based on race, color, national origin, religion, sex, disability, veterans status, or age, and which the affected employee considers to be annoying, insulting, or intimidating, which causes discomfort or which has a detrimental effect on the employee's work performance.
Hearing disability: Hearing loss that prevents understanding of sound through the ear.
Hispanic: All persons of Mexican, Puerto Rican, Cuban, Central or South American or other Spanish culture or origin, regardless of race.
- I -
Immediate labor area: The geographic area from which employees reasonably may commute to the employer's establishment. It may include one or more contiguous cities, counties, Metropolitan Statistical Areas, or parts thereof.
Injunctive relief: A court order requiring a person to perform, or to refrain from performing, a designated act. For example, injunctive relief might require an employer to cease asking discriminatory questions on its job application.
- J -
Job area: Any subunit of a workforce sector, such as a department, job group, job title, etc.
Job description: A written statement detailing the duties of a particular job title.
Job group: Job or group of jobs having similar content, wage rates, and opportunities.
- L -
Labor area: Geographic area used in calculating availability. The area may vary from local to nationwide.
Labor force: As defined by the U.S. Bureau of Census: "All persons classified in the civilian labor force plus members of the Armed Forces."
Learning disability: A permanent condition that affects the way individuals perceive, retain, and express information.
- M -
Major life activities: Activities that an average person can perform with little or no difficulty. Examples are walking, speaking, breathing, performing manual tasks, seeing, hearing, learning, caring for oneself, working, sitting or standing.
Make whole relief: Remedies for discrimination that restore the victim of discrimination to his or her rightful place, i.e. the position, both economically and in terms of employment status, that the victim would have occupied had the discrimination never taken place. Common elements of make whole relief include an award of the position the individual was wrongfully denied, back pay with interest, and retroactive seniority.
Mandatory affirmative action: Action taken by an employer on the basis of a self-analysis to investigate and correct its employment practices in order to receive or qualify for a federal contract or grant. Also see: "Remedial and Voluntary Affirmation Action."
Mental disability: Any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities.
Merit principles: The basic tenets of public personnel administration, including such concepts as open competition for entry; selection on the basis of relative knowledge, skills, and abilities; advancement based on relative performance and ability; and fair treatment of applicants and employees in all aspects of personnel administration without regard to race, color, religion, national origin, sex, ancestry, age, disability, or political affiliation.
Minority: For EEO official reporting purposes, the term "minority" includes people who are Black, Hispanic, Asian or Pacific Islander and American Indian or Alaskan Native.
- N -
Native Hawaiian or Other Pacific Islander: Persons having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands. Does not include individuals who are native to the State of Hawaii by virtue of being born there. This group would also include the following Pacific Islander groups: Fijian; Kosraean; Melanesian; Micronesian; Northern Mariana Islander; Palauan; Papua, New Guinean; Ponapean; Polynesian; Solomon Islander; Tahitian; Tarawa Islander; Tokelauan; Tongan; Trukese; and Yapese.
Null hypothesis (N/H): Based on the underlying assumption that employers are hiring or have selected persons from the population of available qualified persons on a random basis, such that each person is equally likely to be selected regardless of race, sex, or ethnic identification. Operating from this assumption of random selection, it is appropriate to hypothesize that for a specific race, sex, or ethnic group within a given occupation that the proportion of workers in an agency is equal to the proportion of workers in the relevant labor market for that occupation, such that any deviation may be attributed solely to chance. In the State Affirmative Action Plan Guide for Equal Employment Opportunity, a .05 (20%) level of significance has been adopted. (Adverse impact is defined as occurring when the selection rate for a racial, sex, or ethnic group is less than four-fifths (80%) of the rate for the group with the highest selection ratio.) Thus, the null hypothesis is rejected if the probability of obtaining the observed difference, by chance, is more than 5% and an inference of underutilization is made.
- O -
Objective: A statement of a program goal which is to be accomplished through related action items.
Officials/Administrators: An EEO-4 category that encompasses occupations in which employees set broad policies, exercise overall responsibility for execution of those policies or direct individual departments of special phases of the agency's operations, or provide specialized consultation on a regional, district or area basis.
- P -
Pattern or practice discrimination: Employer actions constituting a pattern of conduct resulting in discriminatory treatment toward the members of a class. Pattern or practice discrimination generally is demonstrated in large measure through statistical evidence, and can be proven under either the disparate treatment or disparate impact model.
Physical disability: Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: neurological, musculoskeletal, special sense organs, respiratory (including speech organs), cardiovascular, reproductive, digestive, genitor-urinary, hemic and lymphatic, skin and endocrine.
Position: A group of duties and responsibilities, assigned or delegated by an appointing authority, requiring the services of an employee on a full-time basis or, in some cases, on a less than full-time basis.
Position description: A narrative explanation of the duties and responsibilities of a position, and the education, experience, knowledge, skills, and abilities necessary to perform the duties and responsibilities of the position in a satisfactory manner.
Prima facie case: Refers to the initial burden of the complainant to show actions taken by the employer are more likely than not to be discriminatory, if such actions remain unexplained.
Probable cause: A determination made by an enforcement agency, after an investigation of a charge of employment discrimination, that there is a basis "to believe that the charge is true." Also known as "reasonable cause."
Professionals: An EEO-4 category that encompasses occupations which require specialized and theoretical knowledge usually acquired through college training or work experience and other training that provides comparable knowledge.
Protected group: Any legally recognized group that is specifically protected by statute from discrimination.
Protective service: An EEO-4 category that encompasses those occupations is which workers are entrusted with public safety, security, and protection from destructive forces.
- Q -
Qualified individual with a disability: A person with a disability who satisfies the requisite skill, experience, education, and other job-related requirements of the employment position such individual holds or desires and who, with or without a reasonable accommodation, can perform the essential functions of the position.
Quota: In employment law, court-ordered hiring and/or promoting of specific numbers or ratios of minorities or women in positions from which a court has found they have been excluded because of unlawful discrimination.
- R -
Race code: A descriptive term used for reference when identifying a specific ethnic group: White, Black, Hispanic, Asian/Pacific Islander, American Indian/Alaskan Native.
Reasonable accommodation: Includes making existing facilities used by employees readily accessible to and usable by individuals with disabilities; job restructuring; part-time or modified work schedules; reassignment to a vacant position; acquisition or modification of equipment or devices; appropriate adjustment or modifications of examinations, training materials, or policies; provision of qualified readers or interpreters; and other similar accommodations for individuals with disabilities.
Recruitment (or relevant) area: The geographic location(s) from which an agency or organization unit draws applicants for employment.
Regular position: Any position other than a temporary position.
Relevant labor market: Qualified persons in the recruitment area who are available for employment.
Remedial (ordered) affirmative action: Corrective action(s) deemed necessary by a court or enforcement agency to correct or overcome the effects of past discrimination. What the corrective actions consist of depends largely on the circumstances of the employer, or the discretion of the court or enforcement agency. See also "Mandatory and Voluntary Affirmative Action."
Resignation: The voluntary termination of employment by an employee.
- S -
Selection procedure: Any measure, combination of measures, or procedure used as a basis for any employment decision. Selection procedures include the full range of assessment techniques--from traditional paper and pencil tests, performance tests, physical, education, and work experience requirements through structured or unstructured interviews and unscored application forms.
Selection rate: The proportion of applicants or candidates who are hired, promoted, or otherwise selected for a particular position.
Separation: Severance of an employment relationship. The action to separate from employment may be taken by the employee, the employer, or both.
Service/Maintenance: An EEO-4 category that encompasses those occupations in which workers perform duties which result in or contribute to the comfort, convenience, hygiene, or safety of the general public or which contribute to the upkeep and care of buildings, facilities, or groups of public property. Workers in this group may operate machinery.
Skill: A present, observable competence to perform a learned act.
Standard deviation: A statistical measure used to describe the probability that differences between similarly situated groups (such as in selection rates, wages, etc.) occurred by chance.
Standard Occupational Classification (SOC) system: Federal statistical standard used by federal agencies to classify workers into occupational categories for the purpose of collecting, calculating, or disseminating data. All workers are classified into one of 867 detailed occupations according to their occupational definition.
Subjective Criteria/Procedures: Employment qualifications, selection standards or processes that require judgment in their application, such that different persons applying such criteria/procedures would not necessarily reach the same conclusion. A criterion is subjective if it is not fixed or measurable.
Substantially limits: Unable to perform, or be significantly limited in the ability to perform, an activity compared to an average person in the general population.
Sub-Unit (As in the State Affirmative Action Plan): A group of organizational elements that together constitute an agency.
Supervisor: An employee who (a) performs some work that is different from that of the employee's subordinates; and (b) has the responsibility to authorize or recommend in the interest of the employer a majority of the following actions: 1) Hire, transfer, suspend, promote, demote, dismiss, and discipline other employees; 2) address employee grievances; and 3) assign, direct, and conduct performance reviews of the work. The exercise of this authority and responsibility shall not be of a merely routine or clerical nature but shall require the use of independent judgment.
Systemic Discrimination: Employment policies or practices that serve to differentiate or to perpetuate a differentiation in terms or conditions of employment of applicants or employees because of their status as members of a particular group. Such policies or practices may or may not be facially neutral, and intent to discriminate may or may not be involved. Systemic discrimination, sometimes called class discrimination or a pattern or practice of discrimination, concerns a recurring practice or continuing policy rather than an isolated act of discrimination.
- T -
Targeted recruiting: Any recruitment activity directed toward any person or group of persons based on race, color, religion, gender, national origin, or age that is not also equally and coincidentally directed toward all other persons.
Technicians: An EEO-4 category encompassing occupations that require a combination of basic scientific or technical knowledge and manual skill obtained through specialized post-secondary school education or equivalent on-the-job training.
Temporary disabilities: Non-chronic disabilities of short duration that usually have little or no long-term impact. For example, broken limbs, sprains, concussions, appendicitis, common colds, or influenza.
Temporary position: A position limited to a certain stated time period.
Test: Any performance measure used as a basis for any employment decision.
Title VII: Normally refers to Title VII of the Civil Rights Act of 1964, as amended. Title VII generally prohibits discrimination in employment on the basis of race, color, religion, sex or national origin.
Transfer: A change by an employee from one position to another position with a close similarity of duties, essentially the same basic qualifications, and the same pay grade.
- U -
Underrepresentation (underutilization): A lower representation of a group of persons in an occupational category's workforce than would reasonably be expected by their presence in the relevant labor market.
Unemployed: Under the criteria established by the Bureau of the Census of the U. S. Department of Commerce, civilians 16 years old or over are considered unemployed if they were: (a) neither "at work" nor " with a job" during the reference week; (b) looking for work during the last 4 weeks; and (c) available to accept a job. Also included as unemployed are persons who did not work at all during the reference week and were waiting to be called back to a job from which they had been laid off.
Uniform Guidelines on Employee Selection Procedures: Principles designed to assist employers, labor organizations, employment agencies, and licensing and certification boards comply with federal laws prohibiting employment practices that discriminate on the grounds of race, color, religion, sex, and national origin. They are designed to provide a framework for determining the proper use of tests and other selection procedures.
Uniformly applied: Applying employment criteria and processes in the same manner to members of a particular race, color, religion, sex, or national origin group and others.
Upward mobility: A system for training, educating, or otherwise preparing employees for more responsible, higher- paying positions of employment.
Utilization analysis: An analysis conducted by an employer to determine whether minorities, women, and persons with disabilities are employed in each major job category at a rate comparable to the availability of qualified minorities, women, or persons with disabilities in the relevant labor market for the positions covered by each job category.
- V -
Validity: Correctness of a measure, i.e., that it does in fact measure what it purports to measure.
Veteran of the Vietnam Era: A person who (a) served on active duty for more than 180 days, any part of which occurred between August 5, 1964, and May 7, 1975, and was discharged or released therefrom with other than a dishonorable discharge; or (b) was discharged or released from active duty for a service-connected disability if any part of the active duty was performed between August 5, 1964, and May 7, 1975.
Visual disability: A condition in which a person has loss of vision for ordinary life purposes.
Voluntary affirmative action: Actions taken by an employer on the basis of a self-analysis to investigate and correct its employment practices or practices that appear to have had a disparate impact on the employment of protected group members.
- W -
White (not of Hispanic origin): All persons having origins in any of the original peoples of Europe, North Africa, or the Middle East.
Work behavior: Any activity performed to achieve the objectives of the job. Work behaviors involve observable (physical) components and unobservable (mental) components. A work behavior consists of the performance of one or more tasks. Knowledge, skills, and abilities are not behaviors, although they may be applied to work behaviors.
Workforce analysis: An analysis that reveals the composition of employees in a workforce by protected group status and occupational category.
20 Human resources terms you need to know
1. Attrition
This term refers to the voluntary and involuntary terminations, deaths and employee retirements that result in a reduction to the employer's physical workforce. If you work in a human resources department at a large organization, keeping track of attrition trends can be a job in and of itself.
2. Balanced scorecard
Developed in the early 1990s by Drs. Robert Kaplan and David Norton, the term “balanced scorecard” refers to a management and measurement system, which evaluates four areas of business: internal business processes, financial performance, customer knowledge and learning and growth.
3. Behavioral competency
Behavioral competency is essentially an evaluation of the behavior qualities and character traits of an employee. How these competencies are defined can vary by employer, but fundamentally they revolve around people skills, managerial skills and achievement skills. Certain positions work better for certain behavioral competencies, and these particular markers will help determine whether a candidate will be successful at the position he or she is applying for—as you might imagine, a candidate applying for a managerial position should have strong achievement and development-related competencies.
4. Benchmarking
Benchmarking is a process of measuring the performance of an organization or team through a variety of metrics—for example, customer satisfaction rate, sales and retention—for future comparison. Benchmarking can be used to compare internal performance and the external performance of competitors to measure if improvement has occurred.
5. Broadbanding
Broadbanding is a pay structure that places less emphasis on hierarchy than job duties, skills and performance. This type of pay structure encourages the development of a wide variety of employee skills and growth but comes with a significant decrease in promotion opportunities. For example, a company that subscribes to broadbanding may have a larger range of potential salaries for a marketing specialist, while a company that doesn’t is likely to have multiple titles with a smaller range of potential salaries for each (for example: junior marketing specialist, marketing specialist and sr. marketing specialist).
6. Bumping
Bumping is a practice that gives established senior employees whose positions are to be eliminated the option of taking other positions—often a step down, complete with less pay—within the company that they are qualified for and that are currently held by employees with less seniority. This is a way for an organization to retain institutional knowledge and experienced workers.
7. Change management
This is a considered approach for transitioning individuals or organizations from one state to another in order to manage and monitor change. Companies can stay ahead of the game when they think ahead about how they can manage the introduction, implementation and consequences of major organizational changes.
8. Confidentiality agreement
This is an agreement between an employer and employee in which the employee may not disclose branded, patented or confidential information. Many companies have protected information that, if leaked, could be devastating for the brand or welfare of the organization—a confidentiality agreement serves as legal protection from this.
9. Distributive bargaining
Distributive bargaining is the negotiation between competing parties that involves the distribution of a finite resource. One party prevails, to the detriment of the other.
10. Due diligence
Generally speaking, due diligence refers to the steps taken to ensure compliance with laws and regulations. In mergers and acquisitions, due diligence is the process of thoroughly examining the details of an investment or purchase to ensure all paperwork and documentation is up to date and compliant.
11. Emotional intelligence
Emotional intelligence is the ability to recognize, assess and manage one’s own emotions, as well as others’ emotions. High emotional intelligence is a must-have skill for those working in human resources.
12. Exit interview
An exit interview is the final meeting between management and an employee leaving the company. Information is gathered to gain insight into work conditions and possible changes or solutions, and the employee has a chance to explain why he or she is leaving.
13. Freedom of association
Freedom of association is a right for people to associate with (or leave) any group of their choosing. That group also has the right to take collective action in pursuit of its members’ interests. In an HR context, this generally refers to workers’ freedom to form labor unions.
14. Grievance
A grievance is a complaint brought forward by an employee about an alleged violation of law or dissatisfaction with work conditions.
15. Gross misconduct
Gross misconduct is an action so serious that it calls for the immediate dismissal of an employee. Physical violence and intoxication at work are two common examples of this.
16. Hawthorne effect
The Hawthorne effect is a phenomenon observed as a result of an experiment conducted by Elton Mayo. In an experiment intended to measure how a work environment impacts worker productivity, Mayo’s researchers noted that workers productivity increased not from changes in environment, but when being watched. Applied to HR, the concept is that employee motivation can be influenced by how aware they are of being observed and judged on their work—a basis for regular evaluation and metrics to meet.
17. Nepotism
Nepotism is preferential hiring of relatives and friends, even though others might be more qualified for those positions. The favoritism is generally showed by individuals in a position of authority such as CEOs, managers or supervisors.
18. Onboarding
Onboarding is the process of moving a new hire from applicant to employee status, ensuring that paperwork is done and orientation is completed.
19. Retention strategy
Retention strategy refers to the processes and policies used to ensure employees stay. In order to retain employees and reduce turnover, managers must help employees meet their goals without losing sight of the organization’s goals. This is always a balance that must be managed carefully.
20. Succession planning
This is the process of identifying long-range needs and cultivating a supply of internal talent to meet those future needs. It assists in finding, assessing and developing the individuals necessary to the strategy of the organization.
Glossary of Terms
Achievement award – Provides an incentive, in the form of a onetime payment, to eligible employees for attaining measurable goals above and beyond normal duties that support the university’s mission and objectives.
Across-the-board increase - wage or salary increase where either a flat rate (common number of cents/hour) or a common percentage of salary is used.
Adjustment - Salary changes outside of the normal salary programs (promotions, reclassification's, merits, etc.) to remedy salary issues such as external pressure in high demand areas, internal salary compression, and/or retention considerations. Equity adjustments are not granted to reward performance.
Annualized Salary - adjusted income or pay for an incumbent on annual basis.
Base Pay – fixed compensation paid to an individual;' it is typically expressed as an hourly rate or an annual amount. The calculation of base pay is: (hourly rate*2080)
Benchmark Job- job classifications that are common in the labor market, have a clear and consistent definition for purposes of comparison, and for which reliable salary survey data is available.
Career Path - series of defined levels within a job family where the nature of the work is traditionally similar (e.g., accounting, engineering) and the levels represent the organization's requirements for increased skill, knowledge and responsibility as the employee moves through a career.
Casual - defined as less than 20 hours per week, normally discontinuous in nature, and irregular, infrequent, and not regularly scheduled. Employees in a casual status are compensated on an hourly rate for hours worked and are not eligible for benefits or leave.
Compa Ratio - ratio of an actual pay rate (numerator) to the midpoint or some other control point for the pay range (denominator). Compa-ratios are used to measure and monitor an individual's actual rate of pay relative to the midpoint or control point of their range. A compa-ratio can be calculated for a group, a department or an entire organization.
Compression—pay differentials too small to be considered equitable. In some organizations, the term may apply to differences between: pay of supervisor and subordinates; pay of experienced and newly hired employees in the same job; or midpoints in successive grades.
Downgrade - downward movement of an employee from a position in one class (title) to a position in another class having less responsibility and with a lower grade and salary range.
Essential Function – fundamental, crucial job duties performed in a position. A function may be essential because the position exists to perform that function, there are a limited number of employees available who could perform that function and the function is highly specialized.
Equity Analysis – a formal process for reviewing the wages of incumbents in a single job title based on a standard set of criteria, such as years of experience, performance rating or education level to ensure they are paid equitably in relation to one another; generally done in conjunction with market analysis.
Exempt Employee: employee who qualifies as being exempt from the overtime provisions of the Fair Labor Standards Act because of his or her assigned duties and salary. Exempt employees do not receive overtime pay for work performed in excess of the 40-hour work week.
Fair Labor Standards Act (FLSA) - federal law governing minimum wage, overtime pay, child labor and recordkeeping requirements.
FTE (Full Time Equivalents) - a way to measure the scheduled hours of the incumbent. Ratio of total number of paid hours during a period (part time, full time, contracted) by the number of working hours in that period, usually 40 hours
FTE Annualized Rate – adjusted income or pay for an incumbent to on a full time annual basis. For a part time incumbent the pay will be calculated as a full time employee. Full time employees’ FTE annualized rate will be the same as their annual pay
Green-Circled - green-circled refers to the relationship between an individual's actual pay with their assigned pay grade and salary range. If an employee is "green-circled," this indicates that the individual is being paid at a rate that is below the minimum of the salary range associated with the pay grade their job has been assigned to.
Hourly Rate – rate of pay expressed in dollars and cents per hour, for manual and other workers paid on a time basis. Also used to designate the earned rate per hour under incentive methods of wage payment.
Internal Equity - criterion used to determine fairness in pay among employees of an organization.
Internal Equity Adjustment - pay action that is taken to correct a salary inequity among employees in the same job with comparable qualifications and performance levels.
Job Classification - arrangement of tasks in an establishment or industry into a limited series of jobs or occupations, rated in terms of skill, responsibility, experience, training, and similar considerations, usually for wage setting purposes. This term, or job class, refers to a single cluster of jobs of approximately equal “worth.”
Job Description - written statement listing the elements of a particular job or occupation, e.g., purpose, duties, equipment used, qualifications, training, physical and mental demands, working conditions, etc.
Job Evaluation - determination of the relative importance or ranking of jobs in an establishment, for wage setting purposes, by systematically rating them on the basis of selected factors, such as skill, responsibility, experience, etc. Ordinarily used as a means of determining relative levels, not the actual rate structure as a whole.
Job Family - a group of jobs that are similar in the nature of work that they perform.
Job Title - label for a job or occupation, which distinguishes it from other jobs or occupations.
Lateral Transfer - change of an employee from one position to another position in the same class or a different class with the same salary range.
Longevity Pay - specified increase in hourly pay rate, a lump sum payment, or a form of bonus (e.g., government savings bond, add-on to severance pay, etc.) paid to employees based upon their length of service.
Lump Sum Merit - made to employees in lieu of a general wage rate increase. Lump-sum payments are not incorporated into an employee’s base pay rate or salary.
Market Midpoint – the middle value of pay for a job in a specified market.
Market Value – “going rate” for a benchmark or slotted position, and is used to assign positions to a pay band
Market-Based Adjustment - change in pay to recognize appropriate market value of a job as determined by salary survey information and approved by Compensation Services.
Merit – adjustment to an individual's base pay rate based on performance or some other individual measure.
Merit Pool – the total funds available for providing merit increases. It can be expressed as a percentage of payroll or as total dollar amount.
Minimum qualifications - the essential, bare minimum requirements for a job; does not pertain to preferred qualifications which are not essential.
Non-Exempt Employee - employee who is subject to the overtime provisions of the Fair Labor Standards Act because of his or her assigned duties and salary. Non-exempt employees will be paid at one-and-one-half times the hourly rate or will be granted compensatory time for work performed in excess of 40 hours during the work week.
On Call Pay - pay received by employees for being ready to report to work if necessary. Employees receiving on call pay usually are required to be readily available by phone or pager, within a reasonable distance from the workplace, and able to report promptly to work.
Overtime Pay (OVE) - payment at premium rates (e.g., time and one-half, double time) for work defined as overtime.
Overtime- work performed in excess of basic workday or workweek, as defined by company policy. Sometimes applied to work performed on Saturdays, Sundays, and holidays at premium rates.
Part Time- employees who hold appointments of less than 50 percent time for four and one-half months or more are eligible to participate in the Tax Sheltered Annuity program. Such part-time appointees are ineligible for paid leaves (e.g., sick time and holidays), insurances, premium sharing, UTFLEX, and retirement benefits. Employees in a part time status are compensated on a pro-rated basis of percent time to annual salary.
Pay Range – a range of pay rates, ranging from minimum to maximum, established for a pay band
Probationary Period - 6 months during which a newly hired employee is on trial prior to becoming a regular employee. During this time, an employee is not eligible for promotion or transfer.
Promotion - the assignment of an employee from one position to another position, by way of an open recruitment, which is in a class having a higher salary range maximum.
Reclassification- reassignment of a job to a different salary grade or range based on a substantial change in duties, responsibilities or minimum qualifications.
Red-Circle - pay rate that is above the established range maximum.
Regular Appointment - defined as a period of at least four and one-half consecutive months with a definite job assignment that must be 50 percent time or more. A regular appointment entitles the incumbent to the complete range of benefits offered by the university. Employees in a regular status are compensated on a pro-rated basis of percent time to annual salary.
Retroactive Pay - wages due for past services frequently required when wage increases are made effective as of an earlier date; or when contract negotiations are extended beyond the expiration date.
Salary (Salary Rate) - for workers hired on a weekly, monthly, or annual basis (e.g., clerical, technical, managerial employees), the rate of pay normally expressed in terms of dollars per week, month, or year, as opposed to payment for an hour of work.
Salary Structure—structure of job grades and pay ranges established within an organization. The salary structure may be expressed in terms of job grades, job evaluation points, or policy lines.
Salary Survey – A salary survey is a process of gathering, summarizing, and analyzing data on the wages/salaries paid by employers for selected jobs. In order to be compliant with federal regulations, data must be at least three months old or older at the time of publication, and must be administered and validated by an independent third party so that the specific employer cannot be identified through analysis of the reported data.
Salary Workup – a document that calculates the rate of pay that should be offered to a candidate or employee based upon their qualifications compared to the requirements of a job. It also provides guidance range that gives managers an option to make an offer of any salary within range.
Shift Differential - additional compensation (cents per hour or percentage of day rate) paid to workers employed at other than regular daytime hours.
Skill – Based Pay - an alternative compensation system in which pay is based, not upon the specific job the employee performs, but upon the number of skills or tasks the employee is capable of per- forming. Such pay systems are linked to flexible work as- segments or both, rotating jobs, typical of self-managed work teams.
Straight Time Pay (OTE) - payment for work at an employee’s regular pay rate (base rate), as distinguished from pay based on an employee’s over- time pay rate, typically 1 1⁄2 times the regular pay rate.
Temporary Appointment - defined as a period of not more than four and one-half months (136 calendar days) which can be either full-time or part-time. All temporary appointees are eligible to participate in the Tax Sheltered Annuity program. Temporary employees are ineligible for paid leaves (e.g., sick time and holidays) and retirement benefits. Employees in a temporary status are compensated on a pro-rated basis of percent time to annual salary. Temporary appointees are not entitled to participate in any university group insurances, premium sharing, or UTFLEX. However, temporary appointees with a cumulative total at an institution in excess of 136 calendar days in a fiscal year are eligible for TRS benefits, retroactive to the start date of the most recent temporary appointment. It is the hiring department's responsibility to make this determination and place the employee in the pay system at the appropriate status, either temporary or regular.
Temporary Administrative Supplement (TAS) - temporary administrative supplement paid for specific situations when a Classified, Management Administrative and Professional (“A&P”), or Faculty member assumes substantial, additional responsibilities on an interim basis for an extended period of time, generally not to exceed one fiscal year. The temporary pay supplement is discontinued when the employee is no longer responsible for the additional responsibilities.
Transfer- movement that occurs when an employee moves from one department to another department.
1. Engagement
Let’s start easy. The first term every HR generalist should know is engagement.
Engagement has been the holy grail of HR for a long time. Most of us are familiar with engagement. It is said to lead to higher productivity, lower absence, lower employee turnover, higher product quality, and fewer product defects.
Engagement is the polar opposite of burnout. While people who classify as being burned out have low energy, are emotionally detached from work and are cynic (Maslach, Schaufeli & Leiter, 2001), people who are engaged are high in energy, dedicated to their work, and often lose their sense of time when working.
The image above shows the differences between work and business outcomes of the top 25% in employee engagement versus the bottom 25%. It explains why HR has put so much attention on trying to measure and promote employee engagement.
2. Job demands-resources model
The second HR concept, or HR term, is the job demands-resources (JD-R) model. The JD-R model is an occupational stress model.
The model proposes that every occupation has its own specific risk factors associated with job stress. These factors can be classified into two general categories. These are job demands and job resources.
The model shows that job demands lead to strain (and eventually burnout), while job resources lead to motivation (and eventually engagement). Job demands are driven by the mental, emotional and physical demands of the job, which are mainly influenced by work overload and time pressure.
On the other hand, Job resources lead to motivation. Examples of job resources are autonomy, salary, esteem, security, and career opportunities.
The JD-R model proposes that job resources form a buffer for job demands. This means that if demands are high, job resources should also be high in order to provide a buffer. If this is not the case, there is a risk of strain and (in the long term) burnout.
From an organizational perspective, high motivation and low strain, lead to better organizational outcomes. These are the outcomes we saw earlier: high productivity, higher customer satisfaction, and higher profitability.
All in all, the JD-R model provides a comprehensive framework to manage stress and engagement at work and to drive positive business outcomes.
For more information about these and other common HR models, check the link for a full article!
3. Strategic Human Resource Management
We already wrote an extensive article about human resource strategy and Strategic Human Resource Management. The latter is an important HR term.
Strategic Human Resource Management was popularized in the early 2000s by Dave Ulrich and contemporaries. In a 1998 article, Dave Ulrich stated: “HR should not be defined by what it does but by what it delivers – results that enrich the organization’s value to customers, investors, and employees”.
In the following years, HR professionals responded to this challenge and HR became more strategic. This is also when the HR Business Partner role emerged: an HR advisor who not only contributed operationally but also on a tactical and strategic level: Strategic HRM was born.
The goal of Strategic HRM is for HR to align its activities with the objectives or the organization. When this is done right, HR will help the organization reach its goals. The promise of Ulrich – and strategic HRM for that matter – is that when done right, HR will convert from a fee-burner to a fee-earner, giving it the seat at the (board) table it has desired for so long.
4. HR analytics
The next term covers this process of aligning HR activities with the strategic objectives of the organization. It’s all good and well to think we train our people much more than we did last year – but does this actually contribute to the company strategy?
This is where HR analytics comes in. HR analytics, also called people analytics, is a data-driven approach to managing people at work (Gal, Jensen & Stein, 2017). HR analytics helps to quantify if and how HR processes contribute to organizational objectives.
This data-driven approach to managing people has proven to be very successful. Using turnover analytics, companies like Credit Suisse were able to save between $70 – $100 million annually by reducing their internal turnover, according to the Wall Street Journal.
Other examples include Best Buy, a large electronics chain. They were able to relate engagement to store revenue, finding that a 0,1 percentage point increase in engagement resulted in a $100,000 increase in store revenue, according to Harvard Business Review.
HR analytics is evolving strategic HRM into something that can be quantified.
5. Employee turnover
Employee turnover is the next HR term. It might sound simple – but it is much more complicated in reality. When it comes to turnover, there are a number of challenges.
First of all, turnover isn’t necessarily good or bad. There are two kinds of turnover: regretted and unregretted loss. Regretted, or undesired turnover happens when high performers leave. Unregretted loss, or wanted turnover, happens when bad performers leave.
Some regretted turnover is inevitable. However, high levels of regretted loss can be disastrous for an organization. One of the key responsibilities of HR should be to manage and retain high potentials and key talent.
Another challenge is the calculation of turnover. This may sound easy – but it is much harder in reality. We have a full guide on how to calculate employee turnover rates, including the formulas. This is highly relevant when you’re doing HR analytics or reporting – but less so if you’re an HR generalist.
6. Applicant tracking system
Another key HR concept is the applicant tracking system or ATS. An applicant tracking system is a Human Resource Information System (HRIS) aimed at handling recruitment and hiring needs.
An ATS is a customer relationship management (CRM) system for recruitment. Whenever a candidate applies to a company, their profile will be stored in the ATS. The ATS can be used to search for profiles (via connections with job en resume boards like LinkedIn, Monster, and so on), send vacancies to job boards, match candidates to job, and invite them for interviews.
7. HR report
The HR report is next on the list. These days, all HRISs have the functionality to create reports. These are, in a way, a print out of the data in the system.
Besides the HR report, there is the HR dashboard. The HR dashboard is an interactive report. It usually provides the functionality to ‘slice and dice’ data, meaning that you can inspect specific departments, teams, locations, or function groups.
The HR report and dashboard enable you to get insights into your data and work in a more data-driven way. High-quality HR reporting enables you to ‘slice and dice’ data from different systems. For example, to know what percentage of turnover is regretted, you need data from your basic HRIS and you need data from your performance management system. By combining these data sources, you can determine if a loss is regretted or not.
8. Employee experience
One of the HR terms that’s coined more and more often is employee experience. Employee experience is the way employees feel about what they encounter and observe over the course of their employee journey at an organization.
Employee experience offers a somewhat new perspective to doing HR. Where employee engagement is seen as an employee outcome, employee experience is the way HRM is perceived. It is thus seen as a driver of employee and organizational outcomes.
Because employee experience is such a novel topic, it hasn’t really caught on in literature (yet). Further studies will have to show if the business outcomes associated with employee experience are similar to those in employee engagement.
9. 360-degree survey
The 360-degree survey is another well-known HR concept. 360 surveys are a method to collect feedback from multiple perspectives. It usually involves one’s manager, colleagues, subordinates, and customers, providing a full picture of one’s behavior.
360-degree surveys are mostly used for managerial performance feedback. The instrument is popular – but not always successful. In fact, literature shows that such an assessment is successful in only one-third of cases. In another one-third of cases, the survey does not provide benefit, and in the remaining one-third of cases, it even leads to worse performance (Kluger & DeNisi, 1996)!
This shows that the conditions in which a 360-degree feedback instrument will be successful, are unique. For a full description of best practices, and tips on how to make the 360 survey more effective, check our full guide on 360-degree feedback.
Wrapping up
That’s it for the 9 HR concepts and terms you should know when you work in HR. Did you know all of them? I tried to take a few deep dives into some of them and give you a bit of a ‘behind the scenes’ that explains some of the elements of the HR professional’s job. As always, suggestions, feedback, and comments are more than welcome.
50 HR Terms
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