Glossary

360-degree Feedback

A performance appraisal process, where an employee is rated on his/her performance by people who are usually directly connected with his/her work or in a position to evaluate effectiveness. Peers, supervisors, managers, customers or clients, familiar with the employee’s work can be included in the feedback process. Typically used for assessing competence development needs and succession planning in the organization, more than for determining pay or promotions. Such feedback is usually anonymous. Also called multi-rater assessment, multi-source assessment or multi-source feedback.

401(K)

A 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts, designed to provide an individual with greater retirement planning options. Employers sometimes match a certain % of the employee contribution.

Accommodation (see also Reasonable Accommodation)
Reasonable accommodation is any change to a job, the work environment, or the way things are usually done. It often allows an individual with a disability to apply for a job, perform job functions, or enjoy equal access to benefits available to other individuals within the workplace. Organizations are required by law to provide reasonable accommodation to qualified individuals with disabilities, unless doing so would impose an undue hardship to the agencies. In addition, Executive Order 13164 requires Federal agencies to develop written procedures for providing reasonable accommodation for persons with a qualified disability.

Adverse Impact
Usually refers to a negative impact to an employee or group of employees involving a material difference in the work, pay or circumstances. See also “disparate impact.”

Appraisal (also Performance Planning)
Performance appraisal is the process of reviewing employee performance and accomplishments, setting new performance objectives, documenting the performance for the prior review period. This is usually done verbally, in a face-to-face meeting between the employee and the supervisor. Annual performance appraisals often form the basis for personnel decisions, e.g. compensations and benefits and sometimes, promotions.

Attorney – Client Privilege
A client’s privilege to refuse to disclose, and to prevent any other person from disclosing, confidential communications between the client and his or her attorney. Such privilege protects communications between attorney and client that are made for the purpose of furnishing or obtaining professional legal advice or assistance.

Back Pay
A type of damages awarded in an employment claim against an employer that represents the amount of money the employee would have earned in the past if the alleged violation of law had not occurred. Also known as “lost pay” or “lost wages.”

Base Salary
Pay received for a given work period, as an hour or week, but not including additional pay, as for overtime work or commissions. It is used as the basis for calculating other allowances and benefits.

Benchmarking (also Best Practice Benchmarking or Process Benchmarking)
A process used in management and particularly strategic management, in which organizations evaluate various aspects of their processes in relation to best practice, (usually within their own sector or industry). This allows organizations to develop plans for adopting and adapting such best practices for increasing their performance. Benchmarking is considered a continuous process in which organizations continually seek to challenge and improve their practices. It is also a compensation process used to determine what the labor market is willing to pay for a given role, skill set, and proficiency level. Benefits

Some see benefits as a form of supplement paid by employers to employees over and above the amount of pay specified as cash compensation. For others, benefits are a portion of a total compensation package or total rewards for employees. A comprehensive, common set of benefits could include many components, e.g., career development, support for work-life balance, retirement plans, health insurance, life insurance, PTO or paid time off. Also known as “fringe benefits.”

Best practices
The practices of an organization that enables them to achieve superior employee and organizational performance results. It usually reflects an “ideal” or hoped for standard and becomes a target for organizations to reach.

Bias
Prejudice in favor of or against one thing, person, or group compared with another, usually in a way considered to be unfair to one or more “protected” groups, often based on treating one group differently than another. Implicit Bias (or Unconscious Bias) Unlike explicit bias (which reflects the attitudes or beliefs that one demonstrates or communicates at a conscious level), implicit bias is the bias in judgment and/or behavior that results from subtle cognitive processes (e.g., attitudes and stereotypes) that often operate at a level below conscious awareness and without intentional control.

Bonus
A reward or payment (may be either discretionary or nondiscretionary) based on the performance of an individual, a group of workers operating as a unit, a division or business unit, or an entire workforce. Payments may be made in cash, shares, share options or other items of value, such as a special event, travel or gift card. In the context of sales compensation, a defined, pre-established amount of money to be earned for achieving a specified performance goal. Planned bonus amounts commonly are expressed as a percentage of an employee’s base salary, salary range midpoint, percentage of target cash compensation or incentive compensation, or a defined dollar amount.

California Labor Commissioner
Sets and enforces regulations for employee wages, paycheck deductions, breaks, vacation, jury/witness duty, or temporary military leave, the workweek, minors, employee access to personnel files, “lawful conduct” discrimination, exempt status, and independent contractor status. The commissioner also assesses fines and files charges with the District Attorney on behalf of underpaid employees, and investigates, holds hearings, takes action to recover wages, assesses penalties, and makes demands for compensation. Enforces California labor laws, including those covering equal pay, minimum wage, overtime, breaks, paid sick leave, and prohibitions on retaliation and misclassification. The Labor Commissioner receives claims alleging violations of the California Equal Pay Act, investigates these claims, and where violations are found, orders appropriate relief. The Commissioner also conducts workplace investigations, issues citations for wages and penalties, hold hearings, files cases for criminal prosecution with District Attorneys, puts earned wages into workers’ pockets and helps level the playing field for law-abiding employers. The Labor Commissioner’s office is also known as the Division of Labor Standards Enforcement (DLSE).

Casual Employment
The practice of hiring employees on an as-needed basis, either as a replacement for permanent full-time employees who are out on short- and long-term absences or to meet employer’s additional interim staffing needs during peak business periods.

COLA (Cost of Living Adjustment)
An annual adjustment in wages to offset a change in purchasing power, as measured by the Consumer Price Index (CPI).

Collective Bargaining Agreement (CBA)
A collective bargaining agreement is a labor contract between one or more employers and one or more unions about the terms and conditions of employment and employees. Typical issues covered by collective bargaining include salaries and wages, hours of work, working conditions, discipline, and grievance procedures.

Commission
A payment made to an employee based on sales of goods or services. Common measures for commissions are sales margin, volume, or units sold.

Comparable Worth
Sometimes used as a synonym for pay equity. However, comparable worth in the United States is a legal theory based on the idea that men and women should receive equal pay when they perform work that is of comparable value or worth to the employer. The California Equal Pay Act is not a comparable worth statute.

Compensation
All forms of pay going to employees and arising from their employment. Typically, compensation includes base elements such as wages and salaries, variable pay such as bonus, incentives, commissions, and long term incentives such as stock options, restricted stock, or performance shares.

Compensation philosophy
A compensation philosophy is a formal statement documenting the company’s approach to employee compensation. It essentially explains the “why” behind employee pay and creates a framework for compensation consistency within the organization. Compensation philosophies are typically developed by the human resources department in collaboration with the executive team and board of directors. The philosophy based on many factors, including the company’s financial position, turnover and retention, the size of the organization, the industry, business objectives, salary survey information, and the level of difficulty in finding qualified talent based on the economy, as well as unique business circumstances.

Competencies / Competency
Competencies are the defined knowledge, behaviors, skills, abilities, and attitudes an individual employee needs in order to effectively perform their job and/or lead others.

Conditions of employment
An organization’s policies and work rules that employees are expected to follow to become or remain employed.

Confidentiality Policy
A policy restricting the disclosure of confidential information, but see Section X on how California’s Equal Pay Act may limit the application of such policies on issues of employee pay.

Contingent Workers
Contingent workers are employed or retained without defined job security or long-term commitments. Part-time workers, temporary and contract workers, self-employed workers and independent contractors are examples.

CPI (Consumer Price Index)
An index of prices used to measure the change in the cost of certain defined basic goods and services in comparison with a fixed base period. Also called cost-of-living index.

Department of Fair Employment and Housing (DFEH)
State agency that enforces California’s non-discrimination laws. DFEH has jurisdiction over private and public employment, housing, public accommodations, and public services. DFEH receives and investigates discrimination complaints, conducts mediations and provides technical assistance to employers regarding their responsibilities under the law. They can also file a legal action and represent the interest of employees in litigation.

Department of Labor (DOL)
The United States Department of Labor is a cabinet-level department of the U.S. federal government responsible for occupational safety, wage and hour standards, unemployment insurance benefits, reemployment services, and some economic statistics; man U.S. states also have such departments.

Discrimination (including disparate impact and disparate treatment)
The different treatment or impact on a person based on … or making a distinction in favor of or against, a person based on the group, class, gender, ethnicity, sexual preferences, religion or category to which that person belongs rather than on individual performance or merit. Unfair or unequal treatment of an individual (or group) based on certain characteristics protected by law, such as race, sex, or ethnicity. In the employment context, includes unequal impact that a neutral employment policy has on a group based on certain protected characteristics, such as sex, race, or ethnicity.

Disparate (Adverse or Unequal) Impact
Refers to an employment practice that appears neutral but, in actual practice, has a negative impact against a protected class.  

Disparate (Unequal) Treatment
Refers to an applicant or employee who belongs to a protected class receiving different treatment because of his or her membership in a protected class.  It may be discriminatory.

Division of Labor Standards Enforcement (DLSE)
See “Labor Commissioner.”

EEO (Equal Employment Opportunity)
The concept that an employer’s decisions, policies, and practices should not be discriminatory or otherwise based on categories protected by law.

Employee Relations
A broad term, which is used to refer to the general management and planning of activities related to developing, maintaining, and improving employee-management relationships typically by communicating with employees, processing grievances/disputes, etc. It also is a usual part of HR that focuses on addressing workplace problems and facilitating resolution.

Employment “at will”
A legal doctrine that 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 it is not for an unlawful reason.

Equal Employment Opportunity Commission (“EEOC”)
A federal agency that interprets discrimination law, collects employment data and handles employee complaints, including under the federal Equal Pay Act. They also offer mediation and research plus legal advocacy.

Equity adjustment
Equity adjustments are salary changes used to position an employee’s pay relative to internal peers or the external market.

Executive Order 11246
The Executive Order prohibits federal contractors and federally–assisted construction contractors and subcontractors, who have over $10,000 in government business in one year from discriminating in employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identity or national origin. The Executive Order also requires government contractors to take affirmative action to ensure that equal opportunity is provided in all aspects of their employment.

Geographic differential
A variance in pay established for same, substantially similar, or comparable jobs based on variations in cost of labor and/or living among geographic regions, cities or counties.

Incentive Compensation or Variable Pay
Compensation paid in addition to base wage used to motivate and to reward employees for reaching and/or exceeding standard performance or productivity goals.

Job Analysis
Job analysis is a systematic study of a job to determine what activities and responsibilities are included, their relationships with other jobs, the qualifications and skills necessary for performance of the jobs, and the conditions under which work is performed.

Job description
A written description of a job which includes information such as the nature of the work to be performed, specific responsibilities and duties, and the employee skills, characteristics, education and experience required to perform the job, scope and working conditions, and job title.

Job Evaluation
Job evaluation is usually a process for analyzing and comparing different jobs according to the overall demands of each one. Job evaluations assess the content of a job, not an individual’s performance of that job.

Job family
Groups of similar occupations based on work performed and on required skills, education, training, and credentials (similar types of work and requiring similar training, skills, knowledge, and expertise).