The HR Glossary for the HR Terms

We’ve created a Human Resources Lexicon with the most common terms and buzzwords about Management and Employee Benefits

Top HR Glossary Terms

Whether you're a seasoned HR professional, a brand-new HR specialist, or just researching the human resources industry and looking for the words you need to know, you'll find them here.

Employer Net Promoter Score (eNPS)

The acronym eNPS stands for Employer Net Promoter Score. Employers use this scoring system to measure the loyalty and satisfaction of employees within the company. The system uses the NetPromoter Score system as its base. The system comes from Satmetrix Systems Inc, Fred Reichheld, and Bain and Company, and it measures customer loyalty. 

Making Announcements

Having a new employee start work in your business is a big day, not just for the new employee but for everyone else in the organization. An introduction email for a new employee is a great way to get the ball rolling and plays a critical role in the onboarding process.

Supplemental Wages

Supplemental wages are any additional payment the employee receives on top of their salary. Supplemental wages are subject to tax-withholding by the employer, even if the employee submits a Form W-4. The withholdings and tax rates on supplemental wages depend on the state and local laws, as well as the current federal tax laws.

Performance Management

Performance management is a tool Managers use to align the employees' performance to the company's goals. It aims to tailor an environment where everyone working for the business can do their best. 

Gross Wages

Gross wages are the pay an employee receives before tax and other deductions. In contrast, take-home pay depends on state tax laws, insurance situation, and other deductions. Because of that, gross wages are usually significantly higher than net wages.

VTO (Voluntary/Volunteer Time Off)

VTO is an acronym commonly used in HR, and it can refer to two different things. It is widely used to mean volunteer time off or voluntary time off. 

Compensation Management

Compensation management describes the processes involved in analyzing, managing, and computing employees' benefits, salaries, and incentives. Firms need to offer a competitive and broad compensation plan to attract, retain, and maintain personnel. It's up to the compensation manager to draw up such a scheme without exhausting the company's budget. 

Employee Turnover

Employee turnover refers to the total number of employees who leave a company over a certain period, generally one year. For example, those employees might have chosen to leave of their own accord, been fired, or been laid off.

Form 1042-S

Most non-US citizens who receive income from the United States owe taxes here. The Foreign Person's US Source Income Subject to Withholding (Form 1042-S) is how these non-US citizens report their US-source income to the federal authorities. 

Employer Value Proposition

The employer value proposition (EVP) represents the culture and value of a company. It also states the benefits employees get while working at the company. Growth opportunities, chances for learning, and development are all part of the employer value proposition. The EVP is crucial to any business's brand. Studies show that organizations with a well-tailored employer value proposition are five times more successful in attracting talent. 

HR Business Partner

An HR Business Partner is typically a human resource professional with lots of experience. They generally work directly with the senior leadership of an organization. The goal of an HR Business Partner is to direct and develop a human resource plan that aligns with and supports the organization's goals.

Medical Leave of Absence

There are many reasons why an employee may find themselves unable to work and require a leave of absence. One of them is facing a medical condition or conditions that reduce their mental and/or physical health. When this happens, they may find that they can no longer do their job or undertake critical responsibilities.

Operating Budget

Successful businesses base their plans on calculated financial projections to minimize the chances of failure. One such projection is an operating budget.

Seasonal Employment

Seasonal employment is an employment structure that fills a business's needs during a particular time of the year. Examples of employers that offer seasonal employment are:

Biweekly Pay

In a biweekly payment schedule, the business determines when they pay the employees and do it once every two weeks. It is the preferred payment method for many US employers. 

Basic Pay

Basic pay is the dollar amount a salaried employee agrees to receive from their employer. Basic salary differs from hourly pay in several aspects. The most crucial difference is that it is a fixed payment, usually month-to-month throughout the year.

Salaried Employee

A salaried employee is a person who gets paid a fixed amount of money (salary) by their employer. Depending on the arrangement in their contract, a salaried employee may receive their pay at any given interval.

147c Letter

147c it’s simply a confirmation letter issued by the Inland Revenue Service (IRS). As a taxpayer, you need to know your Employee Identification Number (EIN). The 147c letter confirms this is a unique number. Your EIN is required on all tax forms and related correspondence with the IRS. If you no longer have your EIN information, a 147c is the letter you need.

Employment Status

Employment status is a general term describing the relationship between a person and their former or current employer. In the US, "employment status" is not a legal term. However, in Canada, for example, the expression has a legal bearing. 

Informal Communication

Informal communication, often called grapevine communication, is the type of communication that flows freely across the whole of an organization.

Pre-Tax Deductions

Pre-tax deductions are the money taken from an employee’s paycheck before tax.


SDI tax is short for State Disability Insurance tax. A few select states have implemented this payroll tax. SDI tax money collected goes into a state fund. This fund is set up to support individuals who can no longer work due to disability, which can be either physical or mental disability unrelated to their profession.

CP 575 Letter

A CP 575 Letter is a document confirming a company's unique Employer Identification Number (EIN). The Internal Revenue Service (IRS) issues this documentation to New businesses. 

Direct Reports

Direct Reports describe subordinates or employees who report directly to a superior in an organizational hierarchy. Often, the latter could be a team leader, supervisor, or manager. Superiors have to monitor and assign tasks to their direct reports. 

Employee Evaluation

An employee evaluation is the regular appraisal of a worker's performance. It is the responsibility of the direct manager to carry out the process. Sometimes the HR team takes part in it, as well. The input of the team leader remains a crucial part of the employee evaluation in all cases. 

HR Processes

HR processes are the blueprints to a happy marriage between employer and employee. When businesses implement a strategy correctly, it will lead to the smooth running of any workforce.  They are, in a nutshell, what HR is all about. 

Imputed Income

Imputed income is any taxable non-cash compensation an employee receives. The imputed income is considered a "fringe" benefit. The term encompasses any taxable addition to an employee's regular salary. Because the benefit was received in another form, the imputed income isn't a part of the net income. Unless specified, the imputed income becomes part of their gross income instead. There is a section in the W-2 tax form reserved for imputed income. 

Retro Pay

Retro pay is a form of compensation added to a paycheck to cover missing monies from a previous pay period. Back pay is monies owed for one or many complete pay periods that are missing. Retro pay is usually paid within one pay period of the mistake.

Summary Dismissal

Summary dismissal is the immediate termination of an employee's contract. In most cases, the reason for summary dismissal is gross misconduct on behalf of the employee.