Glossary

What is employee empowerment?

What is employee empowerment? Employee empowerment is a management strategy that encourages self-reliance, independence, and accountability among personnel. Rather than centralizing the leadership only among executives, employee empowerment calls on each employee to display leadership qualities appropriate for their position and capabilities.  Trust is the foundation of employee empowerment—employers need to believe that their employees will act intelligently and responsibly. Knowing that their employers trust them, in turn, gives people the space to think, act, and express themselves independently. While each company will determine how to apply employee empowerment, some…

What is indirect compensation?

What is indirect compensation? Indirect compensation is a type of remuneration that typically encompasses non-monetary forms of payment. Direct compensation includes base pay, bonuses, commission, and incentives. Indirect compensation includes paid time off and overtime pay, as well as benefits that have financial value, but no cash value, such as: Insurance plansParental leaveTechnological devicesStock optionsRetirement planning and financial consultations Except for government-mandated benefits, organizations can choose which forms of indirect compensation to incorporate.  Why should HR leaders care about indirect compensation? Understanding indirect compensation is essential for HR leaders. During…

What are supplemental wages?

Supplemental wages are payments that employers provide to employees in addition to their regular wages. While regular wages are comprised of hourly wages or a monthly salary, supplemental wages can include earnings such as: Severance payBonusesCommissionsOvertime payAwardsVacation payAccumulated sick leave paymentsRetroactive pay increases As an enhancement of the basic compensation plan, supplemental wages are subject to specific tax regulations. By law, employers potentially have to withhold tax from supplemental wages differently than from regular wages. Withholding tax from supplemental wages depends on: The total amount of supplemental wages paid annually—if…

What is an affirmative action plan?

An affirmative action plan (AAP) is a written document designed to promote equal employment and career opportunities for minorities. The term “affirmative action” was first coined by President John F. Kennedy in a 1961 executive order. He requested that employers “take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color, or national origin.” Today, affirmative action has transformed, encompassing affirmative action programs that target underrepresented groups in the workplace. AAPs use company data from previous years to…

What is nondiscrimination testing?

Nondiscrimination testing is an annual IRS-mandated evaluation of employee retirement, health, and welfare plans that ensures equal benefits for all employees, notwithstanding their position in the company. Nondiscrimination testing is part of the federal law ERISA (Employee Retirement Income Security Act of 1974), which requires a minimum investment in retirement and health care plans. While organizations can offer specific benefits to employees of different tiers, benefits covered by nondiscrimination testing must be offered equally to all personnel.   The IRS relies on non-discrimination testing to:  Check that all employees, not just…

What is a DE&I dashboard?

A DE&I dashboard is an interface that provides a visual representation of company diversity, equity, and inclusion practices and outcomes. The dashboard reflects the DE&I status by representing the data through graphs, charts, and other visuals that can be read at a glance. A DE&I dashboard reflects the status of the workforce in areas such as: GenderReligious beliefsNeurodiversityAgeNational originSoft skills Why should HR leaders care about a DE&I dashboard? Rather than sifting through spreadsheets, metrics, and surveys, HR leaders can use a dashboard to provide a simple visual representation. Clear…

What is the Americans with Disabilities Act (ADA)?

The Americans with Disabilities Act (ADA) of 1990 is a civil rights law that protects disabled individuals from discrimination throughout different areas of everyday life. The ADA protects those who have “a mental or physical disability that substantially limits one or more major life activities,” as well as those who "are perceived by others as having such an impairment." In addition to keeping discrimination at bay in employment, the ADA aims to ensure that disabled individuals have equal access to: Government servicesBuying merchandiseCommercial facilities Public transportation Why should HR leaders care…

What is a learning management system?

A learning management system (LMS) is software companies use to train and educate employees, clients, and business partners. Traditionally, work training programs would take place in person over a few hours or days. LMS technology, however, streamlines this learning process. It provides a one-stop-shop for educational content, offering learning options including videos, programs, courses, quizzes, and guides. Furthermore, the content can be live or recorded so individuals in different locations, time zones, and companies can easily access it. Companies use LMSs to: Create informational contentOrganize it in a centralized digital…

What are KPIs?

KPIs (Key Performance Indicators) are metrics that reflect how successful a company is in reaching its business goals. KPIs can be quantitative or qualitative. Quantitative KPIs are typically expressed through a percentage. Examples include: Employee growth rateAbsenteeism rate Career path ratio  Qualitative KPIs can express the final result through a numerical value, yet they draw data from subjective feedback, such as employee surveys. Some examples are: Employee net promoter scoreQuality of hireApplicant satisfaction Why should HR leaders care about KPIs? KPIs assist HR leaders in monitoring progress, identifying flaws, enhancing performance,…

What is a non-compete agreement?

A non-compete agreement is a contract that demands that an employee abstains from working at a competing organization for a specified amount of time. Non-competes, or noncompetition agreements, are meant to keep employees from working in the same field at another company and sharing sensitive business information with their new employer.  Organizations often use non-competes: During a merger and acquisition (M&A)For employees and independent contractorsTo maintain a positive employer reputation Why should HR leaders care about non-compete agreements? A comprehensive understanding of the non-compete contract and its overall impact on…

What is employee work-life balance?

Work-life balance refers to maintaining a harmonious relationship between personal life and work life. Often, people invest so much time and energy into their work that they neglect essential elements of their lives that aren’t work-related. Work-life balance involves a daily dedication of time and energy to one’s job while also carving out time for meaningful and enjoyable activities that support one’s health and happiness.  Why should HR leaders care about work-life balance? Work-life balance allows employees to lead a wholesome, stable, and meaningful life. When employees balance their long…

What are soft HRM and hard HRM?

What are soft HRM and hard HRM? Soft HRM and hard HRM are two opposing methods of Human Resource Management. HRM is the strategic approach toward acquiring, hiring, training, engaging, and retaining personnel.  Soft HRM emphasizes the human side of HR, recognizing that the workforce is composed of individuals with inherent ambitions and emotions. Soft HRM encourages employees to actualize their potential through practices such as: Two-way communication Business transparencyTraining and career development programsA democratic management style Hard HRM, in contrast, does not prioritize employees' need for self-actualization. Instead, it treats…

Overtime refers to the extra hours that employees work beyond their regular schedule.  In the U.S., employers must pay non-exempt employees a minimum of time and a half for each extra hour they work past forty hours a week. U.K. law takes a different approach, ruling that employers do not have to pay employees for overtime. However, U.K. employers must follow the employment contract and provide an average compensation that meets the National Minimum Wage standards.    Why should HR leaders care about overtime? Overtime laws and company overtime policy can…

Employee time tracking is the practice of monitoring and documenting the hours that each employee works. Companies can track work hours by requiring employees to clock in and out at designated times, such as starting and ending the workday and unplanned breaks.   Employees receiving hourly wages must monitor their work hours. Yet, for salaried workers, time tracking is also essential. And with a technologically advanced HRIS time and attendance tracking software that facilitates the process, people can track time effortlessly.  Why should HR leaders care about employee time tracking? Employee…

ONA is a structured charting method used to analyze how employees collaborate and contribute to their company. Individual influence levels are often hard to pinpoint within the traditional hierarchical business structure. Thus, ONA technology aims to identify and leverage the different types of influential employees and discover problem areas, so leaders can enhance the way people work together and share information.  Why should HR leaders care about ONA? ONA helps HR leaders analyze employee networking-- the work relationships that organically form between personnel. ONA adds another dimension to traditional workforce…