An employee feedback program whereby an employee is rated by surveys distributed to his or her co-workers, customers, and managers. HR departments may use this feedback to help develop an individuals skill or they may integrate it into performance management programs.

An employer sponsored retirement plan divided into two different categories: the defined benefit plan and the defined contribution plan. In the defined benefit plan, the employer pays a defined amount to a retiree who meets certain criteria. In a defined contribution plan, the plan defines the contributions that an employer can make. 401(k) plans are instrumental in ensuring a companys competitiveness in attracting and retaining talented employees. It is common for companies to outsource all or some of their plan including performance monitoring, investment selection, and administration.

Administrative Services Only (ASO): The hiring of a firm (usually a health care vendor) to perform specific administrative services. The firm would not have to assume any risk. For example, a self-insured employer would use this arrangement in order to retain financial responsibility for paying claims without having to perform administrative functions.

Affirmative Action: To identify problem areas in the employment of protected group members, to set goals and take steps to overcome these problems. To improve work opportunities for women, racial and ethnic minorities, and persons belonging to other protected groups who have been deprived of job opportunities.

Age Discrimination in Employment Act (ADEA): prohibits discrimination in employment against persons age 40 and above. Applies to all conditions of employment. Purpose is to promote equity in employment by removing illegal barriers to employment on account to age.

Alternative Staffing: Another term for “Contingent Staffing,” includes all nontraditional work arrangements other than direct full-time employment, including: contractors, temporaries, consultants, self-employed, independent contractors and part-time workers.

Americans With Disability Act 1990 (ADA): Title I of the Americans with Disabilities Act of 1990, which took effect July 26, 1992, prohibits private employers, state and local governments, employment agencies and labor unions from discriminating against qualified individuals with disabilities in job application procedures, hiring, firing, advancement, compensation, job training, and other terms, conditions and privileges of employment.

Assessment Testing: Testing used to assist employers in pre-hire evaluations. They ensure that organizations place the right people into the right jobs. These tests can be done via the Internet and they can provide employees with effective training, assist managers in becoming more effective, and promote people into appropriate positions.

At Will Employment: California’s labor code specifies that an employment relationship with no specified duration is presumed to be employment At-Will. This means that the terms and conditions of employment may be changed with or without cause and with or without notice, by employee or the employer, including but not limited to termination, demotion, promotion, transfer, compensation, benefits, duties and location of the work.

Background Screening / Pre-employment Screening: Testing to ensure employers are hiring qualified and honest employees. The screening involves criminal background checks as well as validating important information including Social Security numbers, past addresses, age or year of birth, corporate affiliations, bankruptcies, liens, and judgments. If an employer outsources pre-employment screening, the federal Fair Credit Reporting Act requires that there must be a consent and disclosure form separate from an employment application.

Base Wage Rate (or base rate): The hourly rate or monthly salary paid for a job performed. It is solely a base rate and does not include any benefits, overtime, or incentives.

Benefits Administration: Software that enables HR professionals (or, brokers, agencies, TPAs or anyone else responsible for managing a companys employee benefits) to track employee participation in benefits programs including healthcare, insurance and pension plans. Benefits administration software automates and streamlines these tasks.

Bereavement leave: Paid days off following the death of an employee’s spouse, parent, child grandparent or in-law so that the employee may attend funeral proceedings, etc.

Cafeteria Plan: A plan in which an employer offers employees a variety of different benefits. The employee is able to choose which benefits would fit their individual needs. Examples of benefits offered in the cafeteria include group-term life insurance, dental insurance, disability and accident insurance, and reimbursement of healthcare expenses.

California Family Right s Act (CFRA): California Family Rights Act and Family Medical Leave Act require employers to grant unpaid leaves, to a maximum of 12 weeks, for an employee’s own serious illness, or for the employee to care for certain seriously ill family members or to bond with a newborn child. Both the state and the federal acts have eligibility requirements for employees, posting requirements, health benefit continuation provisions, medical certification provisions and guarantee the employee the right to return to his/her job. An employee must provide a 30 day notice, if possible requesting a leave. They must also submit a health care provider certification of illness.

Carrier: A vendor in the employee benefits space. More commonly used in reference to health care. Carriers (e.g., Met Life, Blue Cross, Aetna, etc.) sell their products through Brokers & Consultants, but may also sell to an employer directly.

Carve-Out: The elimination of coverage of a specific category of benefit services (e.g. vision care, mental health/psychological services, or prescription drugs). The employer opts out of certain services with one vendor and contracts another to deliver them.

Child Labor Law: the FLSA child labor provisions are designed to protect the educational opportunities of minors and prohibit their employment in jobs and under conditions detrimental to their health or well being. The provisions include restrictions on hours of work for minors under 16 and list hazardous occupation orders for both farm and non-farm jobs declared by the Secretary of Labor as being too dangerous for minors to perform. Minors must obtain a work permit which is to be signed by a school counselor and the employer designating the hours the minor will work

COBRA: Consolidated Omnibus Budget Reconciliation Act. 1985 Federal law that requires employers to offer continued health insurance coverage to terminated employees and their beneficiaries. The coverage may continue for the following cases: termination of employment, change in working hours, change in dependent status or age limitation, separation, divorce, or death.

Co-employment: The employment relationship where two or more legally separated employers share potential or actual employer responsibilities with a common employee[s].
Common-law Rules: Defined as “the law of a country or state, based on custom, usage and the decisions and opinions of law courts.” Common-law rules are traditional tests that are applied to determine an employee or independent contractor status. A “common-law employer,” is an employer who possesses the right to direct and control an employee as to the final results and as to the details of when, where, and how the work is to be done.

Compensation: Pay structures within an organization. It can be linked to employee appraisal. Compensation is effectively managed if performance is measured adequately.
Competency Modeling: A set of descriptions that identify the skills, knowledge, and behaviors needed to effectively perform in an organization. Competency models assist in clarifying job and work expectations, maximizing productivity, and aligning behavior with organizational strategy.
Competitive advantage: ‘People are the source of competitive advantage’. Other systems in an organization can be copied but not the people in the organization.

Confidentiality agreement: An agreement restricting an employee from disclosing confidential or proprietary information.

Constructive dismissal
1. Coercion by threats to act or promises to refrain and includes a resignation given as an alternative to be dismissed.
2. A breach of duty by the employer leading a worker to resign.

Contingent workers: Employees who may be: casual labor, part-timers, freelancers, subcontractors, independent professionals and consultants.

Contract for services: An agreement with an independent contractor.

Contract of service: An employment agreement.
Core competencies: The skills, knowledge and abilities which employees must possess in order to successfully perform job functions which are essential to business operations.

Cost-Benefit Analysis: The ability to measure the costs associated with a specific program, project, or benefit. The cost is then compared to the total benefit or value derived.

Defined Benefit Plan: A retirement plan that pays participants a lump-sum amount that has been calculated using formulas that can include age, earnings and length of service.

Defined Contribution: A pension plan that clearly defines the amount of contributions, which is usually a percentage of an employees salary. The benefits payable at retirement depend on several factors including future investment return and annuity rate at retirement.

Disability: The inability to perform all or part of one’s occupational duties because of an accident or illness. This can be due to a sickness, injury or mental condition and does not necessarily have to have been caused by the job itself.

Disability Income Insurance: Health insurance that is paid to a policyholder who experiences a loss of income due to an injury or an illness. Disability insurance plans pay a portion of the salary of a disabled worker until his/her retirement age.

Disability Leave: To allow an employee who is injured or ill to stay home without fear of losing his/her job. All disability leaves would fall under CFRA, FMLA, and PDL or any combination. CFRA and FMLA are very similar, one is a California Act and the other is a Federal Act. Both are intended to do the same thing. When one Act conflicts with the other, the most stringent Act should be applied.

Distance Learning: The process of delivering educational or instructional programs to locations away from a classroom or site to another location by varying technology such as video or audio-conferencing, computers, web-based applications or other multimedia communications.

Disciplinary procedure: A procedure carried out in the workplace in the event of an employee committing some act contrary to terms of the employment agreement. If the act is regarded as Gross Misconduct this may lead to Summary Dismissal.

Discrimination: The favoring of one group of people to the detriment of others.

Distributive bargaining: Related to the process of Negotiation. Known also as Competitive bargaining – The parties are concerned with their respective shares of the benefits available and compete and conflict with each other until one side wins an increased share at the expense of the other.

Drug Fee Work Place Act 1988: Federal law requires most employers doing business with the federal government to submit proof that a plan to create a drug-free workplace is either already in place or in the works. The California Legislature passed a similar law in 1990 to require a drug-free workplace for all employers doing business with the state. The purpose of a drug-free workplace policy should be to help the employee reject the use of drugs and alcohol, especially on the job. Even if you do not do business with the federal or state government you should at a minimum have a drug-free policy that prevents possession or use of illegal drugs on the company property

EAP: An employer-sponsored program that is designed to assist employees whose job performance is being adversely affected by such personal stresses as substance abuse, addictions, marital problems, family troubles, and domestic violence. For every dollar invested in an EAP, employers save approximately $5 to $16. The average annual cost for an EAP ranges from $12 to $20 per employee. Source: US Department of Labor.

E-Recruitment: Web-based software that handles the various processes included in recruiting and onboarding job candidates. These may include workforce planning, requisitioning, candidate acquisition, applicant tracking and reporting (regulatory or company analytics).

E-Learning: E-learning is a method of education via the Internet or other computer related resources. It presents just-in-time information in a flexible learning plan. E-learning can be combined with face-to-face courses for a blended learning approach.

Employee Leasing: The term employee leasing for the service industry has come to mean a business service whereby a firm specializing in payroll accounting, personnel management, employee benefit, and risk administration, offers its skills and expertise to the subscribing business. The long-term, regular dedicated employees of the subscribing business are transferred to the leasing firm’s payroll and benefits resources. The leased-employees return to the subscribing business via the avenue of employee leasing.

Employee Relations: A broad term used to refer to the general management and planning of activities related to developing, maintaining, and improving employee relationships by communicating with employees, processing grievances/disputes, etc.

Employee retention: organizational policies and practices designed to meet the diverse needs of employees, and create an environment that encourages employees to remain employed.

Employment Branding: A strategy designed to make an organization appealing as a good place to work. This targeted marketing effort utilizes both print and Internet tactics and attempts to shape the perceptions of potential employees, current employees and the public / investment community.

Employee Retirement Income Security Act (ERISA): To regulate private pension plans in order to assure the employees who put money into pension plans or depend on a pension for retirement funds actually will receive the money when they retire. To keep all pension plans free from discrimination, specifically, discrimination favoring highly compensated individuals, and discrimination against women.

Enterprise Compensation Management (ECM): The automation of the compensation process to assist organizations in the acquisition, management and optimization of its workforce.

ERISA (Employment Retirement Income Security Act): A federal law that governs pension and welfare employee benefit plans. ERISA requires plans to provide participants with plan information including plan features and funding. It also requires that plans provide fiduciary responsibilities for those who manage and control assets. It gives participants the right to sue for benefits and breaches of fiduciary duty.

ERP: Short for enterprise resource planning, a business management system that integrates all facets of the business, including manufacturing, sales, marketing, finance and human resources. This is slightly different than best-of-breed HRIS applications and the industry continues to debate the merits of one versus the other. With the growing popularity of web-based applications (ease of use, lower costs) ERP seems to be losing out, especially in the mid-market.

Executive Coaching: Executive coaching is a professional relationship between a Coach and an Executive, or an Executive Team. The goal is to assist executives with positive leadership development. It can be provided in one-on-one sessions or via the Internet.

Executive Search: An agency or organization used by employers to assist them with the selection and placement of candidates for senior-level managerial or professional positions.

Exempt Versus Non-Exempt Employees: Employees who meet one of the FLSA (US Fair Labor Standards Act that governs overtime compensation.) exemption tests and who are paid on a fixed salary basis and not entitled to overtime.

Exit Interview: An interview between a member of staff of the organization that an employee is leaving to ascertain the reasons for the employee leaving the organization. Should not be carried out by employee’s immediate superior. Used for possible changes.

Fair Labor Standards Act (FSLA): Employers in California are subject to labor laws from many sources, both state and federal. When these laws conflict, there often is no easy answer to the issues which one will prevail. In general, the law that is most restrictive to the employer and most generous to the employee must be followed. FSLA requires that certain employment standards are maintained, that the appropriate records are kept and the employees are classified correctly. The FSLA governs the standard practices of minimum wage, overtime, child labor, and record-keeping requirements.

Family Medical Leave Act (FMLA): Provides a leave of absence to care for a newborn, serious illness of a child, parent, spouse, or an employee who has a serious health condition. Leave time does not have to be taken consecutively. Employee must work 1,250 hours in the 12 months preceding the leave and must be employed for at least 12 months to be eligible for FMLA.

Federal Civil rights act 1964, Title VII (CRA): The federal CRA and the California FEHA prohibits discrimination on the basis of race, color, national origin/ancestry, sex, religious creed, age (for persons 40 and older), mental or physical disability, including AIDS or HIV –positive status, Veteran status, medical condition, marital status, sexual orientation.

Fixed Term Employment: An employee and an employer may agree that the employment of the employee will end at the close of a specified date or period or on the occurrence of a specified event or at the conclusion of a specified project.

Flexible Spending Accounts (FSA): FSAs allow employees to set aside a portion of their earnings on a pre-tax basis into separate spending accounts to fund allowable health care and/or dependent day care expenses. The funds must be segregated as per IRS regulations.

Flexible Work Arrangements: Schedules that allow employees to structure their work hours around their personal responsibilities. Examples include flextime, job sharing, telecommuting and a compressed workweek. Home sourcing has become a popular flexible work concept in recent years. In this arrangement, employees work full-time from their homes.

Functional job analysis: The preparation required for the construction of a job description. It is necessary to collect data on the job to be advertised.

F.U.T.A.: Stands for Federal Unemployment Tax Act. “F.U.T.A.” is the term used for the payroll tax every employer must pay under this Act. This tax cannot be withheld from the employee’s pay, it is solely the responsibility of the employer.

General Agents: General agents are middleman for carriers and brokers and usually focus on the 250 employee market. Usually an individual appointed by a life or health insurer to administer its business in a given territory. GAs are important for companies who sell to small employers or brokers e.g., benefits administration software providers.

General Employer: In joint employer situations or court cases involving multiple employers, the general employer is the original employer who retains the employment agreement with the employee. This is the employer with broad control. The courts and administrative agencies identify the general employer as the employer who is maintaining the employee on the payroll and providing benefits and its responsible for the long-term employment relationship. The borrowing or short-term employer is called the special employer.

Grievance: A complaint brought by one party to an employment contract against another party.

Gross misconduct: An act committed by any personnel likely to lead to Summary Dismissal.

Health Insurance Portability and Accountability Act of 1990 (HIPAA): To provide group health plan participants with a “certificate of creditable coverage” upon loosing health coverage. If a former participant becomes covered by another group plan that excludes coverage for preexisting conditions, the participant may present the certificate to the new plan to reduce the length of the new plan’s exclusion period by the participant’s period of “creditable coverage” under the former plan.

Hiring Incentives to Restore Employment (HIRE) Act of 2010: Makes a new tax benefit available to employers who hire certain previously unemployed workers (“Qualified Employees”). The payroll tax exemption provides employers with an exemption from the employer’s share of the Social Security tax on wages paid to qualifying employees, effective with wages paid from March 19, 2010 through December 31, 2010.

HR Audit: A method by which human resources effectiveness can be assessed. Can be carried out internally or HR audit systems are available.

HR Generalist: An individual who is able to perform more than one diversified human resources function, rather then specializing in one specific function.

Human Capital Management: The challenge of recruiting and retaining qualified candidates, and helping new employees fit into an organization. The goal is to keep employees contributing to the organizations intellectual capital by offering competitive salary, benefits and development opportunities. The major functions of human capital management include Recruitment, Compensation, Benefits and Training.

Human Resource Information System (HRIS): Business software systems that assist in the management of human resource data (e.g. payroll, job title, candidate contact information). Some of the larger HRIS platforms include SAP and Peoplesoft.

Human Resource Outsourcing (HRO): A contractual agreement between an employer and an external third-party provider whereby the employer transfers responsibility and management for certain HR, benefit or training-related functions or services to the external provider.

Independent contractor: A person who works for him/herself but has a contract for services with another person/organization. An Independent Contractor provides services to a company, but is not an employee of that company. The company pays the Independent Contractor without withholding payroll taxes or paying the employer’s share of payroll taxes. An independent contractor has the right to decide how the work will be done and may hire others to assist or do the work. Independent contractors also do not receive wages. Independent Contractors are under intense scrutiny from the IRS and states because of abuses costing billions of dollars of taxes.

Induction: The process of introducing a new employee into the organization.

Industrial relations: The study of theories and practices in the workplace relationship.

Intangible rewards: Non-monetary re-enforcers such as praise given to an employee in recognition of a job well done, or a particular achievement.

Immigration Reform and Control Act 1986 (IRCA): The laws require that all individuals pass an employment verification procedure before they are permitted to work. This procedure has been established by the law and requires that every individual provide satisfactory evidence of his/her identity and legal authority to work in the United States.

ISO 9000: Developed by the International organization for Standardization (ISO), it is a set of standards for quality management systems that is accepted around the world. Organizations that conform to these standards can receive ISO 9000 certification. The standard intended for quality management system assessment and registration is ISO 9001. The standards apply uniformly to organizations of any size or description.

Job analysis: The preparatory stage for writing job descriptions.

Job Board: An online location that provides an up-to-date listing of current job vacancies in various industries. Applicants are able to apply for employment through the job board itself. Many job boards have a variety of additional services to help job seekers manage their careers and their ongoing job search processes.

Job Description: 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.

Job evaluation: Used for compensation planning purposes, it is the process of comparing a job with other jobs in an organization to determine an appropriate pay rate for the job.

Labor Market: A geographical or occupational area in which factors of supply and demand interact.

Labor force participation: A rate at which the number of people in the labor force is divided by the number of people of working age x 100.

Leadership Development: Formal and informal training and professional development programs designed for all management and executive level employees to assist them in developing the leadership skills and styles required to deal with a variety of situations.

Legislation: Law emanating from Parliament in the form of Acts.

Liability Insurance: Insurance that covers bodily injury or property damage to others, to third parties.

Lump sum payment: A fixed negotiated payment which is not typically included in an employee’s annual salary. Often times given in lieu of pay increases.

Managed Care: A health care system in which the provider manages the care of the individual for a fixed fee. The opposite of this preventive intervention (or, population-based) approach is fee-for-service. Managed care emphasizes wellness and prevention.

Margin: Dollar amount difference between the Client Company bill rate and the Contractor salary. For example, if the hourly bill rate is $30.00 and the hourly salary is $20.00, the Margin is $10.00. See also “Markup” and “Multiplier.”

Markup: The percentage that the Client Company bill rate is greater than the Contractor salary. For example, if the hourly bill rate is $30.00 and the hourly salary is $20.00, the Markup is 50%. See also “Margin” and “Multiplier.”

Matrix organization: An organizational structure where employees report to more then one manager or supervisor.

Mediation Services: The process of intervention by a specialist in an employment dispute. Provided under the Employment Relations Act 2000.

Mentoring: A one-to-one process between an outside trainer and an employee, whereby the former will ‘train’ the latter. See also Coaching.

Minimum wages: The lowest level of earnings of employees set by Government.

Mission Statement: A statement illustrating who the company is, what the company does, and where the company is headed.

Myers-Briggs Type Indicator: A psychological test used to assess an individuals personality type.

Negligent Hiring: To hold employer responsible for not doing necessary reference checks to verify behavior and character of all employees they hire. The basic concept is that if an employer hires an employee, and the employer knew or should have known about a prior behavior or criminal conviction of the employee, and the employee causes harm to a third party, the third party can sue the employer for damages. A convicted sex offender rapes an employee during an off shift.

Negotiation: The process of discussion with a view to mutual settlement usually by the means of a conference.

Nepotism: Favoritism shown to relatives by individuals in a position of authority such as CEO’s, managers or supervisors.

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

Observation interview: The process of observing employees while performing their respective jobs or tasks used to collect data regarding specific jobs or tasks.

Offshoring: The act of moving work to an overseas location to take advantage of lower labor costs. Offshoring usually involves manufacturing; information technology and back-office services like call centers and bill processing. Companies can build its own work center abroad, establish a foreign division, or create a subsidiary in remote locations.

Onboarding: The process of moving a new hire from applicant to employee status ensuring that paperwork is done, benefits administration is underway, and orientation is completed.

Organizational Culture: A pattern that emerges from the interlocking system of the beliefs, values and Behavioral expectations of all the members of an organization.

Organizational Development: A planned organization-wide effort to improve and increase the organizations effectiveness, productivity, return on investment and overall employee job satisfaction through planned interventions in the organization’s processes.

Orientation: The introduction of 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. Similar to Induction.

Occupational Safety and Health Administration (OSHA): Employer shall provide a safe and healthful workplace and both employers and employees shall comply with health and safety standards issued by the Occupational Safety and Health Administration.

Outplacement: A benefit offered by the employer to displaced employees which may consist of such services as job counseling, training, and job-finding assistance.

Outsourcing: A contractual agreement between an employer and an external third party provider whereby the employer transfers responsibility and management for certain HR, benefit or training related functions or services to the external provider.