SHRM Glossary

Question 1

Adaptive Device

Answer 1

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.

Question 2

Availability Analysis

Answer 2

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.

Question 3

Blind Ad

Answer 3

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.

Question 4

Broadbanding

Answer 4

Pay structure that consolidates a large number of narrower pay grades into few bands with wider salary ranges.

Question 5

Bumping Rights

Answer 5

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.

Question 6

Business Continuity Planning

Answer 6

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.

Question 7

Cafeteria Plan

Answer 7

A benefits plan which allows employees to choose between one ore more qualified tax-favored benefits and cash.

Also called a Section 125 plan in reference to IRS tax code.

Question 8

Compensatory Time Off (Comp Time)

Answer 8

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 FLSA generally does not permit private employers to offer comp time off in lieu of overtime pay for private-sector employers.

Question 9

Co-employment

Answer 9

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.

Question 10

Constructive Discharge

Answer 10

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.

Question 11

Contingent Worker

Answer 11

Nonemployee workers such as independent contractors, leased workers, or staffing agency employees.

Question 12

De Minimis Rule

Answer 12

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: employer-provided snacks, small holiday gifts, flowers, and occasional entertainment tickets.

Cash or cash equivalent items (e.g. 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.

Question 13

Defined Benefit Plan

Answer 13

Aka: pension plans

Retirement plan programs sponsored by employers that provide participants with a definitely determinable benefit payable over a fixed period of time.

Question 14

Discretionary Bonus

Answer 14

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.

Question 15

Disparate Impact

Answer 15

Occurs when a decision, practice, or policy has a disproportionately negative effect on a protected group, even though the impact may be unintentional.

Question 16

Disparate treatment

Answer 16

Intentional discrimination that occurrs when rules or policies are applied inconsistently to one group of people over another.

Question 17

EEO-1 Survey

Answer 17

A report filed with the 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.

Question 18

Employment at Will

Answer 18

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.

Question 19

Featherbedding

Answer 19

Refers to an unfair labor practice that occurs when a union requires an employer to pay for services they did not perform.

Examples: hiring more workers than are needed, assigning unnecessary work

Question 20

Flexible-Benefits Plan

Answer 20

A type of cafeteria plan.

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.

Question 21

Forced Ranking (Stack Ranking)

Answer 21

Performance appraisal rating method

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.

Question 22

Health Reimbursement Account (HRA)

Answer 22

Aka a Health Reimbursement Arrangement

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.

Question 23

Imputed Income

Answer 23

The value of non-cash rewards or benefits provided to an employee that are subject to income tax.

Most commonly seen in group health insurance benefits for domestic partners.

Question 24

Job Reference Immunity Statutes

Answer 24

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
- Not be given with malicious intent

Question 25

Just-Cause Termination

Answer 25

(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.

Question 26

Key Employee

Answer 26

Under FMLA statutes, a key employee is defined as a salaried employee who is among the highest-paid 10% 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.

Question 27

Labor Certification

Answer 27

Issued by the US Department of Labor allowing an employer to hire a foreign worker because there are not sufficient US 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 US workers.

Question 28

Mandatory Benefits (statutory benefits)

Answer 28

Benefits that employers are required by law to provide to their employees.

Examples:
- Worker’s compensation insurance
- Unemployment insurance
- Paid sick leave (only certain state/local laws)

Question 29

Minority Business Enterprise (MBE)

Answer 29

A certification designation offered by the National Minority Supplier Development Council to for-profit, US-based enterprises that are at least 51% owned and run by one ore more minorities.

In the case of a publicly owned business, at least 51% of the stock is owned by one ore more minorities and management and daily business operations are controlled by one ore more minorities. A minority business designation is also available through the Small Business Administration (SBA) for small companies doing business with the US government.

Question 30

Nondiscretionary Bonus

Answer 30

Payments that are promised or expected and tend to be dependent on the quality, quantity, or efficiency of production or hours worked.

Question 31

Qualified Domestic Relations Order (QDRO)

Answer 31

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.

Question 32

Qualified Medical Child Support Order (QMCSO)

Answer 32

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.

Question 33

Quid Pro Quo Harassment

Answer 33

Occurs when someone in a position of authority over another 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.

Question 34

Reasonable Person Standard

Answer 34

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 comparative standard for courts to assess liability.

Question 35

Red Circle Rate

Answer 35

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.

Question 36

Salting

Answer 36

A union organizing tactic.

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.

Question 37

Spot Award

Answer 37

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