HR Glossary

An adaptive device is any tool used to help an individual with a disability perform activities of daily living. Employers may accommodate individuals with disabilities in the workplace by allowing the use of, or providing employees with, adaptive devices needed to perform their job.  
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For more information, see Developing an Accessible Workplace.

Affirmative action refers to the implementation of proactive measures in the recruitment and advancement of women, veterans and other minorities. Certain federal contractors are required to implement affirmative action plans (AAPs), and other employers may institute voluntary AAPs to remedy past discrimination if certain conditions are met.

For more information, see What is an affirmative action program?

The Age Discrimination in Employment Act of 1967 (ADEA) protects workers ages 40 and over by prohibiting discrimination against workers ages 40 and over in any employment or employment-related decision. The act applies to most employers with 20 or more employees. One of the main provisions of the ADEA is that employers, with very few exceptions, can no longer force an employee to retire. Voluntary retirements are allowed; however, very specific conditions must be met in order to avoid violation of the act.
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For more information, see Ageism.

Ageism is prejudice, stereotyping and discrimination against older individuals. 
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For more information, see SHRM's Ageism Resource Hub Page.

An agile organization is one that is structured to allow for alteration of its direction to operate successfully. An agile organization requires its workforce to swiftly adapt to the changing needs of customers, employees and the marketplace. 

An ally is a person who actively supports an underrepresented group of which they are not a member. 

The Americans with Disabilities Act of 1990 (ADA) prohibits discrimination against people with disabilities in employment and requires employers to make reasonable accommodations for them to do their jobs.
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For more information, see What You Need to Know About the Americans with Disabilities Act.

Artificial intelligence (AI) is the use of computers and software to perform tasks that typically required human intelligence to complete. 
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For more information, see What is artificial intelligence and how is it used in the workplace?

Attrition is a term used to describe voluntary and involuntary terminations, deaths, and employee retirements that result in a reduction to the employer's physical workforce.
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For more information, see SHRM's Employee Termination and Layoffs Resource Hub Page.

An availability analysis is the process of determining the number of qualified minorities and women in the available labor pool who possess or have the ability to acquire the required skills or qualifications for any available position within the organization.

Behavioral-based interviewing is a technique which focuses on a candidate's past experiences, behaviors, knowledge, skills and abilities by asking the candidate to provide specific examples of when they have demonstrated certain behaviors or skills in the past as a means of predicting future behavior and performance.  
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For more information, see Interviewing Candidates for Employment.

Benchmarking is the systematic process of comparing an organization's processes, practices and results against those of a competitor organization or other industry leader to improve performance.
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For more information, see Benchmarking Human Capital Metrics.

A blind ad is a job advertisement which contains no identifying information about the employer placing the ad. It may be used when an employer wishes to confidentially hire a replacement for a current employee, to build a talent pool or to keep internal changes private. It is a controversial tactic due to the secrecy and possible ethical issues. 

A bona fide occupational qualification (BFOQ) is a very narrowly interpreted exception to Equal Employment Opportunity (EEO) laws. A BFOQ allows employers to base employment decisions for a particular job on such factors as sex, religion or national origin if they are able to demonstrate that such factors are an essential qualification for performing a particular job. 
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For more information, see Can an employer advertise or state a hiring preference for a specific protected class such as veterans?

Broadbanding is a pay structure that consolidates a large number of narrower pay grades into fewer bands with wider salary ranges.

A buddy system is a form of employee orientation whereby newly hired employees are assigned to another employee who shows the new employee the ropes, introduces him or her to co-workers, gives personal assistance, and answers questions on an as-needed basis. 
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For more information, see What is the advantage of a buddy system?

Bumping rights are privileges provided to more senior-level employees whose positions have been eliminated or selected for layoff, allowing the employee with seniority to accept an alternative position that is currently occupied by a less-senior employee, resulting in the employee with less seniority being RIF'd or laid off. Bumping typically occurs in union settings as a condition of a collective bargaining agreement. 

Business continuity planning is the process of outlining how a business will operate during an emergency. It identifies the critical business functions that must quickly resume, how resuming those functions will be achieved, and who is responsible for ensuring this happens in the event of an unexpected emergency or disaster.
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For more information, see Where can I find a business continuity plan template?

A cafeteria plan is a benefits plan which allows employees to choose between one or more qualified tax-favored benefits and cash. Also called a Section 125 plan in reference to the IRS tax code. 
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For more information, see Understanding Section 125 Cafeteria Plans.

Career plateau occurs when an employee has reached the highest position level they can possibly obtain within an organization and have no future prospect of being promoted due to a lack of skills, corporate restructuring or other factors.

Co-employment refers to the relationship between an employer and a professional employer organization (PEO), staffing agency or employee leasing firm, based on a contractual sharing of liability and responsibility for employees.
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For more information, see What is a PEO? What are its advantages and disadvantages?

Compa-ratio is a measure that expresses current pay rates as a percentage of range midpoints. Where the midpoint of a pay range represents full market pay, the ratio of the employee's actual salary to that midpoint indicates whether the employee is paid below, at or above market rates.
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For more information, see Compa-Ratio Calculation Spreadsheet.

A compensatory time off plan, or comp time plan, provides nonexempt employees with paid time off to be used in the future in lieu of paying them overtime for hours worked in excess of 40 per week. Comp time is an acceptable practice for many government employers; however, the Fair Labor Standards Act (FLSA) generally does not permit private employers to offer comp time off in lieu of overtime pay for private-sector employers.  
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For more information, see Is compensatory time allowed in the private sector?

A compressed workweek is an alternative work schedule that allows employees to work longer days for part of the week or pay period, in exchange for shorter days or a day off each week or within the same pay period. Examples include a 4/10 or 9/80 work schedule. 
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For more information, see Managing Flexible Work Arrangements.

Constructive discharge occurs when working conditions are made so unbearable or abusive that a reasonable person believes that resignation is the only appropriate action for them to take.

Contingent workers are nonemployee workers such as independent contractors, leased workers or staffing agency employees. 
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For more information, see SHRM's Independent Contractors Resource Hub Page.

Cost-per-hire is an HR metric that measures the costs associated with filling a vacancy. This includes the internal, external, direct and indirect costs associated with sourcing, recruiting and staffing an open position.
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For more information, see What external and internal costs should be included in a cost-per-hire calculation?

The de minimis rule is used by the IRS to determine if a benefit provided to an employee is excluded from taxable income because the value is so small and the practice so infrequent that accounting for the value of the benefit is unreasonable or impractical. Examples of de minimis benefits include employer-provided snacks, small holiday gifts, flowers and occasional entertainment tickets. Cash or cash equivalent items such as gift cards, no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare provided to an employee working unusual or extended overtime hours. 
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For more information, see Are there any tax issues we need to be aware of when we give employees a gift card or other small gift?

Defined benefit plans, also known as pension plans, are retirement plan programs sponsored by employers that provide participants with a definitely determinable benefit payable over a fixed period of time.
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For more information, see Designing and Administering Defined Benefit Retirement Plans.

Defined contribution plans, such as 401(k) plans, are retirement benefits plans under which the benefit payable to a participant at retirement is determined by the amount of contributions made to the plan on that participant's behalf, plus investment earnings on those contributions over time.
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For more information, see Designing and Administering Defined Contribution Retirement Plans.

A dependent care flexible spending account (FSA), also called a dependent care assistance plan (DCAP), is an employer benefits plan that allows tax-free contributions by an employee and/or employer to cover qualified child and dependent care services.
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For more information, see What is a dependent care assistance plan (DCAP)?

A direct threat, as defined by the Americans with Disabilities Act (ADA), occurs when an individual with a disability poses a significant risk to the health or safety of the individual or others that cannot be eliminated by reasonable accommodation.

A discretionary bonus is a form of variable pay where an employer provides additional compensation to an employee for reasons that are not pursuant to any prior contract, agreement or promise that would lead the employee to expect the payments regularly. 
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For more information, see What is the difference between a discretionary and a nondiscretionary bonus?

Disparate impact, also called adverse impact, occurs when a decision, practice or policy has a disproportionately negative effect on a protected group, even though the impact may be unintentional. 
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For more information, see Avoiding Adverse Impact In Employment Practices.

Disparate treatment is intentional discrimination that occurs when rules or policies are applied inconsistently to one group of people over another.
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For more information, see What are disparate impact and disparate treatment?

A dual career ladder, or dual career track, is a career development plan that offers employees an alternative career path in lieu of traditional promotions to supervisory or managerial positions. The dual career ladder is often used as a way to advance employees who have deep technical skills and/or education but who are not interested or inclined to pursue a management or supervisory track.
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For more information, see What is a dual career ladder?

Due diligence is a critical component of mergers and acquisitions and involves the investigation and evaluation of a particular investment or purchase by obtaining sufficient and accurate information or documents which may influence the outcome of the transaction. HR’s role generally involves reviewing all people-related policies, plans, practices and programs, including information about an organization’s talent and culture, assessments of existing employee benefits plans and liabilities, compensation programs, employment contracts, legal exposure, and more.
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For more information, see Managing Human Resources in Mergers and Acquisitions.

The EEO-1 survey is a report filed with the Equal Employment Opportunity Commission (EEOC) that includes the racial/ethnic and gender composition of an employer's workforce by specific job categories. Employers with 100 or more employees and federal government contractors with 50 or more employees and at least $50,000 in contracts are required to complete the EEO-1 survey annually.
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For more information, see What are the filing requirements for the EEO-1 form?

Emotional intelligence (EI), also known as emotional intelligence quotient (EIQ) or emotional quotient (EQ), describes an individual's mental ability to be sensitive and understanding to the emotions of others as well as being able to manage their own emotions and impulses.

An employee assistance program (EAP) is a work-based intervention program designed to identify and assist employees in resolving personal problems (e.g., marital, financial or emotional problems; family issues; substance/alcohol abuse) which may be adversely affecting the employee's performance. 
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For more information, see Managing Employee Assistance Programs.

Employee engagement is an employee's satisfaction with their work and pride in their employer, to the extent to which people enjoy and believe in what they do for work and have the perception that their employer values what they bring to the table. 
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For more information, see Developing and Sustaining Employee Engagement.

An employee referral program is a recruiting strategy where current employees are rewarded for referring qualified candidates for employment.  
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For more information, see Designing and Managing Employee Referral Programs.

Employee resource groups (ERGs), also called affinity groups, are employee groups that come together either voluntarily, based on a common interest or background, or at the request of a company. Examples of common ERGs are those formed around race, ethnicity, gender, disability, sexual orientation, parental status, national origin, religion or belief, or generation. 

Employee self-service (ESS) portals are Web-based tools through which employees can access relevant information and conduct certain transactions from a central online site or gateway. An employee self-service portal is often used to deliver corporate and HR-related information as well as allow employees to enroll in benefits and update personal information.
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For more information, see Leveraging the Value of Employee Self-Service Portals.

An employee value proposition (EVP) is part of an employer's branding strategy that represents everything of value that the employer has to offer its employees. Items such as pay, benefits and career development are common, but employers also highlight offerings that are currently in demand—like technology, remote work and flexible scheduling.

An employer brand is what an organization communicates as its identity to both potential and current employees. Closely linked with the employee value proposition (EVP), the employer brand incorporates an organization's mission, values, culture and personality. 
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For more information, see What is an employer brand, and how can we develop an employment branding strategy?

Employment at will is a legal doctrine which states that an employment relationship may be terminated by the employer or employee at any time and for any or no reason as long as no laws are violated. Some form of employment at will is recognized in all states except Montana and can be nullified by an express or implied employment contract. 
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For more information, see Involuntary Termination of Employment.

An environmental scan is part of the strategic planning process where an organization identifies external opportunities and threats that could impact the business in the future.
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For more information, see What are the basics of environmental scanning as part of the strategic planning process?

Equity is the fair treatment in access, opportunity and advancement for all individuals. 
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For more information, see Managing Pay Equity.

Essential job functions are those job duties that an employee must be able to perform with or without reasonable accommodation.
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For more information, see Must an employer accommodate an employee who cannot perform their essential job functions?

Exempt positions are jobs that qualify for an exemption from overtime pay under the Fair Labor Standards Act (FLSA) white-collar and industry exemptions. Employees in exempt positions must generally be paid on a salary basis with limited exceptions.  
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For more information, see Understanding Overtime Exemptions Under the FLSA.

An exit interview is a conversation or questionnaire conducted at the time of an employee's resignation used to identify the underlying factors behind an employee's decision to leave. 
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For more information, see Exit Interview Questions.

An expatriate is an employee who is transferred to work abroad on a long-term job assignment.
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For more information, see What are the differences among a local national, an expatriate, a third-country national, and an inpatriate?

An extrinsic reward usually has a monetary value and is given to an employee for achieving something. Examples include bonuses, pay raises and additional benefits.

The Fair Labor Standards Act of 1938 (FLSA) sets requirements for minimum wage, overtime, record keeping and child labor. 
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For more information, see Complying with U.S. Wage and Hour Laws and Wage Payment Laws.

The Family and Medical Leave Act of 1993 (FMLA) requires employers with 50 or more employees to offer unpaid, job-protected leave to qualifying employees for medically-related reasons. Amended in 2008 and 2009, it also provides for leave when a family member in the military is injured and needs care, and for other military service-related exigencies. 
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For more information, see What You Need to Know About the FMLA.

Featherbedding refers to an unfair labor practice that occurs when a union requires an employer to pay for services they did not perform. Examples include hiring more workers than are needed or assigning unnecessary work. 

A flexible- benefits plan, also called a full-flex plan, is a type of cafeteria plan benefit under Section 125 of the Internal Revenue Code that offers employees a choice between receiving their compensation as cash or as nontaxable benefits such as life and health insurance, retirement plans and child care. Employers generally make contributions for all plan-eligible employees, and employees use those contributions to buy various benefits. Employees can also make pre-tax contributions toward any benefit that the employer contributions do not fully cover.

Forced distribution is a performance appraisal rating method requiring the rater to force employee ratings into a bell-shaped curve.
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For more information, see Managing Employee Performance.

Forced ranking, also called stack ranking, is a performance appraisal rating method which requires managers to rate each worker's performance in comparison to the worker's peers. This method often incorporates forced distribution of employee ratings, requiring the rater to identify a certain number or percentage of employees at the top and the bottom of the rating scale.

Forecasting is a business analysis that is used to assess what future trends are likely to happen, especially in connection with a particular situation, function, practice or process that is likely to affect the organization's business operations. 

The form I-9 (or I-9 form) is a document required by the U.S. Citizenship and Immigration Services (USCIS) to verify the identity and employment authorization of individuals hired for employment in the U.S. Employers must complete form I-9 for every employee hired to work in the U.S. after Nov. 6, 1986.
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For more information, see What You Need to Know About Form I-9.

Full-time equivalent (FTE) is the number of full-time hours being worked by both full-time and part-time employees. The FTE calculation is an employee's scheduled hours divided by the employer's hours for a full-time workweek. When an employer has a 40-hour workweek, employees who are scheduled to work 40 hours per week are 1.0 FTEs. Employees scheduled to work 20 hours per week are 0.5 FTEs.
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For more information, see How do I calculate full-time equivalent (FTE) hours?

A fully insured plan is a group health insurance plan where the employer contracts with another organization to assume financial responsibility for the enrollees' medical claims and for all incurred administrative costs.

A furlough is a mandatory temporary leave of absence from which the employee is expected to return to work or to be restored from a reduced work schedule.
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For more information, see What is the difference between a furlough, a layoff and a reduction in force?

Gender expression refers to the way a person communicates gender identity to others through behavior, clothing, hairstyles, voice, or body characteristics.

Gender identity refers to a person's internal sense of being male, female, a combination of both, or neither. 

A gender wage or pay gap refers to the difference in pay between female and male employees who are performing the same or comparable jobs. 
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For more information, see Pay Equity.

Genetic-based discrimination refers to employers using an applicant's or employee's genetic information against them in employment decisions. 

Gig workers are individuals who work temporary jobs as freelancers, independent contractors, on-call workers and temporary employees to fill gaps needed by employers. Gig workers typically set their own terms. 

The glass ceiling is a term used to describe the invisible barrier keeping women from advancing into executive level positions.

The "halo" or "horn" effect is a form of rater bias which occurs when an employee is highly competent or incompetent in one area, and the supervisor rates the employee correspondingly high or low in all areas. This bias can also be seen in recruiting, often based on first impressions that overshadow all other aspects of the individual. 

Harassment is defined by the Equal Employment Opportunity Commission (EEOC) as "unwelcome conduct that is based on race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. Harassment becomes unlawful where 1) enduring the offensive conduct becomes a condition of continued employment, or 2) the conduct is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive." State laws may further define harassment to include additional protections.

A health care flexible spending account (FSA) is a benefits plan designed to allow employees to set aside pre-tax dollars to pay for eligible medical expenses such as co-pays, deductibles and other out of pocket medical expenses. Unused FSA funds are forfeited to the employer at the end of each plan year.
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For more information, see What types of expenses can an employee be reimbursed for under a health care FSA? 

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) protects the privacy of personal medical information, prohibits discrimination based on health status in group health plans and allows for special group health plan enrollment opportunities.

A health reimbursement account (HRA), also known as a health reimbursement arrangement, is an employer-funded benefits plan that reimburses employees for eligible medical expenses such as co-pays, deductibles and other out of pocket medical expenses. Unused HRA funds are forfeited to the employer at the end of each plan year.

A health savings account (HSA) is a benefits plan designed to allow employees to set aside pre-tax dollars to pay for eligible medical expenses such as co-pays, deductibles and other out of pocket medical expenses. Employees must be enrolled in a high-deductible health plan to be eligible to contribute to an HSA. These accounts are owned by the employee and unused funds rollover year to year. 
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For more information, see Are employer contributions to an employee’s health savings account (HSA) considered taxable income to the employee?

A horizontal organizational structure is one that consists of few hierarchal levels. These are also called "flat" structures. Such structures often rely on the use of cross-functional teams. 
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For more information, see Understanding Organizational Structures.

A hostile work environment is created when harassing or discriminatory conduct is so severe and pervasive it interferes with an individual's ability to perform their job; creates an intimidating, offensive, threatening or humiliating work environment; or causes a situation where a person's psychological well-being is adversely affected.
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For more information, see What are the different types of sexual harassment?

A human resource information system (HRIS) is a software application used to store employee information and support various human resource functions, such as benefits, payroll, recruiting, training, etc. This term is often used interchangeably with human resource management system (HRMS).  
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For more information, see Designing and Managing a Human Resource Information System.

Human resource management (HRM) is the process of managing an organization's employees. HRM includes all aspects of people management to effectively meet an organization's goals. 

A human resource management system (HRMS) is a software application used to store employee information and support various human resource functions, such as benefits, payroll, recruiting, training, etc. This term is often used interchangeably with human resource information system (HRIS).
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For more information, see Designing and Managing a Human Resource Information System.

A hybrid organization is one whose structure is comprised of both vertical and horizontal models. It is also called a matrix structure. 
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For more information, see Understanding Organizational Structures.

Implicit bias is a person's unconscious prejudice, attitude or opinion about others.
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For more information, see Implicit Bias Resource Guide.

Imputed income is the value of non-cash rewards or benefits provided to an employee that are subject to income tax. This is most commonly seen in group health insurance benefits for domestic partners. 
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For more information, see If we provide health insurance benefits to the domestic partners of employees, must we calculate a value of those health benefits and charge that to the employee?

Inclusion is the extent to which each person in an organization feels welcomed, respected, supported and valued as a team member. 

Independent contractors are self-employed individuals who perform work on a contract basis for an employer. Independent contractors are not employees and therefore are not subject to employment tax withholding nor are they covered by most employment laws. Because of this nonemployee status, there are legal restrictions as to who can be classified as an independent contractor. Various federal government agencies and some states have their own tests to determine independent-contractor status.
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For more information, see Employing Independent Contractors.

An individual coverage health reimbursement account (ICHRA) is a limited HRA plan that can be offered to employees as an alternative to traditional group health plan coverage. ICHRAs can reimburse medical care expenses, including premiums for individual health insurance chosen by the employee, while maintaining the tax-favored status for employer contributions toward a traditional group health plan. 

Industrial psychology is an applied psychology concerned with the study of human behavior in the workplace and how to efficiently manage an industrial labor force and problems encountered by employees.

An inpatriate is an employee who is transferred from a foreign subsidiary to the home country headquarters of a multinational company. The assignment is usually long-term. 
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For more information, see What are the differences among a local national, an expatriate, a third-country national and an inpatriate?

Intellectual property is protected property by law such as trade secrets, confidential or proprietary information, copyrightable or creative works, ideas, patents, or inventions.

Job analysis is the process of gathering information regarding a specific job to determine the essential functions of the job; the knowledge, skills and abilities necessary to perform the job; the job's relative importance in relation to other positions; and more. 
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For more information, see How do I conduct a job analysis to ensure the job description matches the duties performed by the employee in the job?

A job description is a written description of a job which includes information regarding the general nature of the work to be performed, specific responsibilities and duties, and the employee characteristics required to perform the job. 
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For more information, see How to Develop a Job Description.

Job enrichment is the practice of increasing the amount of control, responsibility and discretion in an employee's job in an effort to improve employee engagement or satisfaction.

Job evaluation is the process of comparing a job with other jobs in an organization to determine an appropriate pay rate for the job. Four primary methods of job evaluations used to set compensation levels are point factor, factor comparison, job ranking and job classification.
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For more information, see Performing Job Evaluations.

Job ranking is one method of job evaluation that ranks jobs within an organization in order of importance or worth. 
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For more information, see Performing Job Evaluations.

Job reference immunity statutes are laws enacted in several states meant to provide employers with protection from liability when disclosing information regarding current or former employees. Typically for an employer to be immune from liability the reference provided must be factual and truthful, based on documented information, and not be given with malicious intent. 
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For more information, see How can employers protect themselves from liability when giving references?

Just-cause termination, in contrast to employment at will, indicates an employee's employment will not be terminated without prior notice and process of informing the employee in writing of the job performance issues. 
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For more information, see Involuntary Termination of Employment in the United States.

Under FMLA statutes, a key employee is defined as a salaried employee who is among the highest-paid 10 percent of all workers employed by the employer within 75 miles of the employee's worksite. The IRS defines a key employee for employer-sponsored retirement plans as a plan participant who is a highly compensated officer or company owner.  
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For more information, see What is the FMLA key employee provision?

Key performance indicators (KPIs) are quantifiable or qualitative, specific measures of an organization's performance in critical areas of its business. 
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For more information, see What are key performance indicators and how do they relate to the human resource function?

Knowledge, skills and abilities (KSAs) are job-related behaviors and attributes necessary to effectively perform a particular job. 

A labor certification is issued by the U.S. Department of Labor (DOL) allowing an employer to hire a foreign worker because there are not sufficient U.S. workers able, willing, qualified and available to fill a particular job. The DOL labor certification process is intended to assure that the admission of foreign workers on a permanent or temporary basis will not adversely affect the job opportunities, wages and working conditions of U.S. workers.
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For more information, see What is the foreign labor certification process for hiring foreign workers?

The labor force, as defined by the Bureau of Labor Statistics (BLS), is the number of people ages 16 and older who are either working or actively looking for work.

A layoff is a separation of employment due to lack of work during periods of economic downturn or organizational restructuring. Layoffs may be permanent, or employers may implement a temporary layoff with the intention of recalling workers if circumstances allow. 
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For more information, see Managing Downsizing by Means of Layoffs.

Mandatory benefits, also known as statutory benefits, are benefits that employers are required by law to provide to their employees. Examples include worker's compensation insurance, unemployment insurance and, under some state and local laws, paid sick leave.
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For more information, see How to Design an Employee Benefits Program.

A matrix organization is an organizational structure where employees report to more than one manager or supervisor.
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For more information, see Understanding Organizational Structures.

Metrics are measures of the effectiveness, value and/or costs of a particular program or process. Examples of HR metrics include cost-per-hire, turnover rates/costs, training and human capital return on investment (ROI), labor/productivity rates and costs, benefits costs per employee, etc.  
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For more information, see How do I determine which HR metrics to measure and report?

A minority business enterprise (MBE) is a certification designation offered by the National Minority Supplier Development Council to for-profit, U.S.-based enterprises that are at least 51 percent owned and run by one or more minorities. In the case of a publicly owned business, at least 51 percent of the stock is owned by one or more minorities and management and daily business operations are controlled by one or more minorities. A minority business designation is also available through the Small Business Administration (SBA) for small companies doing business with the U.S. government.

A mission statement is a concise explanation of the organization's reason for existence. It describes the organization's purpose and its overall intention. 
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For more information, see Human Resources Mission Statement Examples.

Negligent hiring is a claim that can be made against an employer when an employee causes harm to others and the employer should have known of the individual's potential to cause harm but did not take steps to mitigate the risk (i.e., not hiring the individual). Conducting thorough background checks is one tactic employers use to avoid negligent hiring liability.
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For more information, see Conducting Background Investigations and Reference Checks.

Negligent referral occurs when an employer knows that a current or former employee poses a threat to others, but does not pass this information on to other employers. 
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For more information, see How can employers protect themselves from liability when giving references?

Negligent retention occurs when an employer fails to take appropriate disciplinary action (i.e., termination) against an employee that the employer knew or should have known was unsuitable and the employee's actions cause harm to others. This most often occurs when an employer knew the offending employee had a tendency to commit harassment, violence or fraud.

Nepotism is the employment of relatives or the practice of favoring relatives in employment.

New-hire reporting is a requirement of the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). PRWORA requires all employers to report new hires and rehires to a designated state agency for the purpose of enforcing child-support orders and to help detect and prevent fraud in the collection of government benefits, such as unemployment insurance. 
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For more information, see Complying with New-Hire Reporting Requirements.

A noncompete agreement is a contract restricting an employee from obtaining employment with a competitor within a specified industry, distance and/or time frame.  

A nondisclosure agreement (NDA), also known as a confidentiality agreement, is a contract restricting an employee from disclosing confidential or proprietary information outside of the company. 

Nondiscretionary bonuses are payments that are promised or expected and tend to be dependent on the quality, quantity or efficiency of production or hours worked.
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For more information, see What is the difference between a discretionary and a nondiscretionary bonus?

Nondiscrimination testing is an annual examination of an employer's retirement plan, and in some circumstances the group health plan, to ensure that highly compensated and key employees are not provided more benefits than other employees. This testing is required by the internal revenue code to maintain the plan's favorable tax status and safe harbor provisions.   

A nonexempt position, under the Fair Labor Standards Act (FLSA), is one that must be paid overtime for hours worked beyond 40 in a workweek. By definition, it does not meet any of the exemptions to the FLSA that would allow an employer not to pay overtime. 
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For more information, see FLSA Exemption Classification.

Onboarding is the process in which new hires are integrated into an organization. It includes not only an initial new-hire orientation process, but an ongoing introduction to an organization's structure, culture, vision, mission and values. Onboarding can last weeks and even up to a year. 
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For more information, see Understanding Employee Onboarding.

Organizational change refers to organization wide changes such as restructuring operations; implementing new programs; and introducing new technologies, processes, services or products. 
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For more information, see Managing Organizational Change.

Organizational culture refers broadly to the way things are done within an organization. This culture consists of shared beliefs and values established by leaders and then communicated and reinforced through various methods, ultimately shaping employee perceptions, behaviors and understanding. Organizational culture sets the context for everything an enterprise does. Because industries and situations vary significantly, there is not a one-size-fits-all culture template that meets the needs of all organizations.
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For more information, see Organizational Culture.

Orientation refers to the process of introducing new employees to their jobs, co-workers and the organization by providing them with information regarding such items as policies, procedures, company history, goals, culture and work rules. 

Pay compression, also referred to as salary or wage compression, occurs when the pay of one or more employees is very close to the pay of more-experienced employees in the same job, or even those in higher-level jobs, including managerial positions. Often, it is the result of a market rate for a given job surpassing the increases historically awarded to long-term employees. 

Pay equity is the practice of ensuring fair and equal pay practices to all employees regardless of gender, race, age or other protected characteristics.
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For more information, see Pay Equity.

A pay grade refers to a grouping of jobs at an organization that have approximately the same relative internal worth and are paid at the same or similar rate.
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For more information, see Building a Market-Based Pay Structure from Scratch.

A pay range, also known as a salary range, sets the upper and lower compensation limits for jobs within a particular pay grade at an organization. 
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For more information, see How to Establish Salary Ranges.

A performance improvement plan (PIP), also known as a performance action plan, is a tool to give an employee with performance deficiencies the opportunity to succeed. It may be used to address failures to meet specific job goals or to mitigate behavior-related concerns.
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For more information, see How to Establish a Performance Improvement Plan.

Performance management is the process of maintaining or improving employee job performance through the use of performance assessment tools, coaching and counseling as well as providing continuous feedback.  
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For more information, see Employee Performance and Discipline.

Performance-based pay, also called pay for performance, is a variable pay strategy that pays employees based on their individual performance and contributions, rather than the value of the job they are performing. 
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For more information, see Designing and Managing Incentive Compensation Programs.

Personal protective equipment (PPE) refers to clothing and other work accessories (e.g., safety glasses, hearing protection, etc.) designed to create a barrier against potential workplace hazards. 

Phased retirement is a work schedule arrangement that allows older workers to reduce their working hours and gradually transition into retirement.

Progressive discipline is a method of discipline that uses graduated steps for dealing with problems related to an employee's conduct or performance that do not meet defined standards and policies. The ultimate objective of progressive discipline is to help employees correct conduct problems and resolve performance issues in the earliest stages. 

A protected class refers to certain groups of individuals protected by anti-discrimination laws, such as women, older workers, people with disabilities, minorities and others. 
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For more information, see Managing Equal Employment Opportunity.

A protected concerted activity refers to an employee's right, under the National Labor Relations Act (NLRA), to address work-related issues—such as wages, benefits and working conditions—with co-workers. An employer cannot discharge, discipline, threaten an employee or coercively question an employee about such an activity.

A qualified domestic relations order (QDRO) is a court order entered in a domestic relations case, such as a divorce, that requires an employer to handle employee assets from retirement plans in a certain way.

A qualified medical child support order (QMCSO) is an order, decree, judgment or administrative notice (including a settlement agreement) requiring a group health plan to cover an employee's child. QMCSOs are typically issued during a divorce and require the noncustodial parent to enroll their dependent in available medical, dental and vision coverage and any spending accounts that may be offered.

A qualifying life event is a change in an employee's situation that allows the employee to change an election under the employer's group health plan outside of the open enrollment period. Qualifying life events include events such as marriage, the birth of a child and changes in residence.
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For more information, see When can employees make mid-year election changes to their group health insurance?

Quid pro quo (this for that) harassment occurs when someone in a position of authority over another (i.e., a manager or supervisor) directly or indirectly demands sexual favors in exchange for some benefit (a promotion, pay increase, etc.) or to avoid some detriment (termination, demotion, etc.) in the workplace. 
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For more information, see What are the different types of sexual harassment?

A reasonable accommodation, under the Americans with Disabilities Act (ADA), is a modification or adjustment of a job process or work environment that will better enable a qualified individual with a disability to perform the essential functions of a job. 
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For more information, see How to Handle an Employee’s Request for an ADA Accommodation.

The reasonable person standard refers to a hypothetical, average person's reaction to the actual circumstances of alleged illegal activities such as harassment, negligence or discrimination. It serves as a comparative standard for courts to assess liability.

Recruiting encompasses all aspects of hiring new individuals to work for a company. It includes attracting, identifying and engaging candidates; ensuring qualifications and assessing background information; interviewing and selecting a quality candidate for hire; and making a job offer. Onboarding a new employee is often considered part of the recruiting process as well. 
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For more information, see Recruiting.

A red circle rate is a pay rate that is above the maximum range assigned to the job grade. Employees who are "red circled" are usually not eligible for additional pay increases until the range maximums are increased above the individual pay rate or the employee transfers to a job with a higher pay range. 
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For more information, see What are common options for merit increases when an employee is paid the maximum in his or her salary range?

A reduction in force (RIF) occurs when a position is eliminated with no intention of replacing it, resulting in a permanent cut in headcount. These reductions are due to economic pressures, lack of work, organizational changes or other reasons of business necessity which require a reduction in staff. 
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For more information, see How to Conduct a Layoff or Reduction in Force.

A regular rate, under the Fair Labor Standards Act (FLSA), is the hourly rate an employee is paid for all non-overtime hours worked in a workweek. When calculating an employee’s regular rate, all compensation received by the employee in a workweek must be included, including wages, bonuses, commissions and any other forms of compensation. Overtime hours are then paid at one-and-one-half-times the regular rate of pay. 
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For more information, see Calculating Overtime Pay in the United States.

A religious accommodation is an accommodation, such as time off from work, made for an employee so they may exercise their religious beliefs or practices. Title VII of the Civil Rights Act requires employers to accommodate an employee's sincerely held religious beliefs unless doing so would create an undue hardship.

Repatriation is the process of returning an employee to the home country after being placed on a long-term international assignment. 
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For more information, see Managing International Assignments.

A request for proposal (RFP) is a document an organization sends to a potential vendor inviting the vendor to submit a bid for a product or service the organization wishes to purchase. Often, several competing vendors are sent RFPs so an organization can compare bids.

A resident alien, or lawful permanent resident, is a foreign-born individual who has the legal right to live permanently in the United States. These individuals will have a Permanent Resident Card, often referred to as a "green card."

Reverse mentoring is a mentoring arrangement where the typical roles are switched, for example, a young worker mentoring an older worker on technology and social media use or a Black female employee mentoring a white executive on diversity, equity and inclusion issues. 

A right-to-sue letter is issued by the Equal Employment Opportunity Commission (EEOC) once a charge has been recorded and processed, informing the individual who filed the charge that they have the right to further pursue their charges in a federal or state court.  

A "right-to-work" state is a state that has enacted legislation guaranteeing that no individual can be forced as a condition of employment to join or pay dues or fees to a labor union. States have the right to enact these laws under Section 14(b) of the National Labor Relations Act (NLRA).
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For more information, see What is a “right-to-work” state?

Risk management is the process of assessing exposures to loss within an organization and determining how best to eliminate, manage or otherwise reduce the risk of an adverse event having a negative impact on the business. Risk reduction is achieved through policies and procedures, or through contractual transfer of the risk to a third party, typically an insurance company. Risk elimination is achieved through avoidance.

​Salting is a union organizing tactic whereby the union pays an individual to apply for a job within a targeted company and, once the job is obtained, to begin union organizing efforts. Salts—the term used for such individuals—may be overtly direct about their intentions or may use more subtle techniques.

For more information, see What does the term “salting” as a union organizing tactic mean?

Second-chance hiring is the practice of giving individuals with criminal records a fair and equal opportunity at employment. 

A self-funded plan is a benefits plan where the employer assumes all financial responsibility for the enrollees’ medical claims and for all incurred administrative costs. This saves the employer from paying premiums to an insurance carrier.

A serious health condition, under the Family and Medical Leave Act (FMLA), is defined as an illness, injury, impairment, or physical or mental condition that involves inpatient care in a hospital, hospice or residential medical care facility, or continuing treatment by a health care provider. 
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For more information, see How do I know if an employee’s medical absence qualifies for FMLA leave? What is considered a serious health condition?

Sexual orientation refers to the gender, genders or identities outside the gender binary to whom an individual is inherently sexually and romantically attracted to. Examples include gay, lesbian, straight, bisexual and asexual.

Situational leadership is a management theory where a leader adapts their style to meet the current situation and environment.

Skill-based pay is a system which makes the base rate contingent on how many job-related skills the employee has learned, the level of skills mastery or a combination of both.

A skills gap refers to the difference between the skills an employer needs and the skills employees and applicants have. When discussed broadly, it includes the idea that there is a shortage of workers to fill this gap. 
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For more information, see Skills Gap and Workforce Readiness.

Soft skills are those related to behavioral and interpersonal abilities, such as the ability to effectively communicate, problem-solve, collaborate and organize. 

Sourcing is the proactive searching for qualified job candidates for current or planned open positions within a company. 
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For more information, see What is sourcing?

Span of control can simply be defined as how many direct reports a manager or supervisor has. It is also a management principle used when determining how many direct reports a manager can have and still be able to manage effectively. 
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For more information, see What factors should determine how many direct reports a manager has?

A spot award is an immediate monetary or nonmonetary award given to an employee for an idea or accomplishment benefiting the organization.

A statute of limitations refers to the legal time limits for filing a claim against a defendant.

A stay interview is an interview conducted with an employee to learn why the employee continues to work for the employer and what could trigger the employee to consider leaving. 
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For more information, see Stay Interview Questions.

Stop-loss insurance is a contract established between a self-insured employer and an insurance provider providing for the insurance carrier to assume liability for payment if an incurred claim exceeds a specified dollar amount over a predetermined period of time.  

Strategic planning is the process of identifying an organization's long-term goals and objectives and then determining the best approach for achieving those goals and objectives.
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For more information, see Practicing Strategic Human Resources.

A structured interview asks the same questions of each candidate so that valid comparisons of the quality of responses can be obtained. 

Succession planning is the process of identifying long-range organizational human capital needs and cultivating a supply of internal talent to meet those future needs. Succession planning is used to anticipate the future needs of the organization and to assist in finding, assessing and developing the human capital necessary to realize the strategy of the organization. 
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For more information, see Engaging in Succession Planning.

Talent acquisition, also known as recruiting, is the process of hiring individuals with the skills and abilities needed for the job. This includes sourcing and attracting talent, interviewing, background checking, and onboarding.
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For more information, see Talent Acquisition.

Telecommuting, also known as remote work, is an employment arrangement where individuals work outside of a traditional office, such as at their home or other location. They use technology to conduct work and stay connected to managers and co-workers. 
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For more information, see Remote Work.

Third-party sexual harassment is harassment of an employee by someone other than another employee, such as by a client, customer, vendor or service provider. 

Time-to-fill is a metric which measures the average number of days it takes to fill a position, from job requisition to job acceptance.
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For more information, see Time-to-Hire/Time-to-Fill Calculation Spreadsheet.

Time-to-hire is a metric which measures the time the eventual hire entered the talent pipeline to the time they accepted an employment offer. 
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For more information, see Time-to-Hire/Time-to-Fill Calculation Spreadsheet.

Title VII of the Civil Rights Act of 1964, as amended, prohibits discrimination in employment based on race, color, national origin, sex (including sexual orientation and gender identity or expression) and religion. 
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For more information, see Managing Equal Employment Opportunity.

Total compensation refers to the complete pay package awarded to employees on an annual basis, including all direct and nondirect compensation such as salary, health care and retirement benefits, incentive pay, and paid time off. 
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For more information, see What should be included in a total compensation statement?

A training needs analysis or assessment identifies individuals' current level of competency, skill or knowledge in one or more areas and compares that competency level to the required competency standard established for their positions or other positions within the organization. The difference between the current and required competencies can help determine training needs. Rather than assume that all employees need training or even the same training, management can make informed decisions about the best ways to address competency gaps among individual employees, specific job categories or groups/teams.
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For more information, see How to Conduct a Training Needs Assessment.

The term transgender is commonly used to refer to individuals who do not identify with the sex they were assigned at birth or with standard societal expectations of the male and female gender roles. 
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For more information, see Employing Transgender Workers.

Turnover costs are those associated with an employee leaving the company, including items such as unemployment, COBRA administration and lost productivity. It also includes the costs of hiring a replacement, orientation and training.
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For more information, see Turnover Cost Calculation Spreadsheet.

Turnover is the rate at which employees move in and out of a company. This metric is measured by the number of separations in a month divided by the average number of employees on payroll, multiplied by 100. 
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For more information, see How to Determine Turnover Rate.

An unfair labor practice is an action by an employer or a union that violates the National Labor Relations Act (NLRA). There are five categories of unfair labor practices for employers that are prohibited under the NLRA: 1) Interference, restraint or coercion; 2) Employer domination or support of a labor organization; 3) Discrimination on the basis of labor activity; 4) Discrimination in retaliation for contacting the NLRB; and 5) Refusal to bargain.
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For more information, see What is an unfair labor practice by management?

Untapped talent refers to workers often not considered for positions due to perceived barriers related to one or more demographic characteristic, such as veterans, older workers and individuals with criminal records.
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For more information, see How to Address the Skills Gap.

Upskilling refers to employee training that builds on existing skills. An example would be intermediate and advanced training for a particular skill, such as coding.

A utilization analysis is a tool used in affirmative action plans to compare the demographics of current employees with demographics of the available workforce. The goal is to ensure equal access and opportunity for all workers. 

Vacancy rate measures the percentage of vacant positions over a specific period of time. 
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For more information, see Vacancy Rate and Cost Calculation Spreadsheet.

A values statement lists the core principles that guide and direct the organization and its culture.
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For more information, see What is the difference between mission, vision and values statements?

A vertical organization is one with an organizational structure consisting of many levels of management.
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A vision statement looks forward and creates a mental image of the ideal state that the organization wishes to achieve. It is inspirational and aspirational and should challenge employees. 
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For more information, see What is the difference between mission, vision and values statements?

A voluntary benefit is one which is not required to be offered to employees by law.

The Weingarten rule gives unionized employees the right to union representation during an investigatory interview by the employer. 

Workforce planning is the process an organization uses to analyze its workforce and determine the steps it must take to prepare for future staffing needs.
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For more information, see Practicing the Discipline of Workforce Planning.

Workforce readiness refers to preparing new and returning workers with the knowledge, skills and abilities to meet employers' need for skilled workers. 
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For more information, see Skills Gap and Workforce Readiness.

A yellow-dog contract is an employment contract or agreement, either oral or in writing, that forbids employees from joining or continuing membership in any labor union as a condition for continuing or obtaining employment. These were made illegal under the Norris LaGuardia Act.
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For more information, see Norris LaGuardia Act.

Yield ratios are metrics used in recruiting which measure what percentage of applicants moves from one stage to another in the hiring process. They are used to measure the success of various recruiting methods and strategies. For example, if 50 applicants apply for a position and 10 are phone screened, the yield ratio would be 20% ((10/50) * 100). 
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For more information, see Recruiting Yield Ratios Spreadsheet.

Zero-based budgeting is a process to create a budget each year (or other period) from scratch, rather than relying on increasing or decreasing the prior budget.