Every industry has its favored terms and industry ‘lingo’. HR is certainly no different. Here is a useful list of the key terms used by HR execs and an explanation for each one.
This post is part of a comprehensive series of the key terms everyone in HR should know. Check back on the Compete blog for more.
- 360 Survey
A 360 survey is a type of employee feedback program which sees an employee rated by co-workers, managers, or even customers, where relevant. HR departments may use this method of feedback to hone in on and then help develop an individual’s skill or they may integrate it into a formal performance management scheme.
One of the biggest challenges with 360 surveys is deciding how to apply this feedback when making decisions. Feedback provided into a 360 survey should be consistent with an organization’s performance management philosophy. An effective 360 survey should result in two outcomes: accountability for past performance and a pathway for an employee to develop their objectives for future performance. 360 surveys provide a record to help employees stay accountable and help managers track the employees progress.
- 401(k) Plan
A 401k is a retirement account that is sponsored by an employer. Any employee with a 401(k) account can place a portion of their pre-tax salary into a retirement account. There are tax breaks that are provided to any money contributed towards the account. Employees contribute money to an individual account by signing up for automatic deductions from their paycheck. Depending on the type of plan you have, the tax break comes either when an employee contributes money or when they withdraw it in retirement. 401(k) funds are invested in a range of vehicles like stocks, bonds, mutual funds, and cash.
- Abandonment Rates
An abandonment rate is an important metric that measures the number of job applicants who start the job application, but who do not actually go on to finish and submit the completed information on a company’s ATS (applicant tracking system). Organizations collect data related to the number of succesful applications and then determine their abandonment rate. Companies who have defined their abandonment rate can improve and optimize their job application process, making the hiring process more efficient.
- Applicant Tracking System (ATS)
An applicant tracking system (ATS) for recruiters simplifies the recruiting process by allowing businesses to collect information on individuals applying for positions in an organization. It also allows inhouse recruiters to organize prospects based on experience and skill set, as well as filter applicants. This makes it easy to search and filter resumes and other candidate information, decreasing time-to-fill and ensuring companies get the best candidates for the position. A good ATS can greatly improve the candidate hiring process, decrease the amount of time it takes to make a hire and increase the productivity of the recruiter enabling them to fill more jobs. Newer platforms integrate third-party providers to bring a greater degree of flexibility to the core system.
Attrition is when the headcount of an organization is reduced not through the active process of employee terminations. Rather, attrition is the reduction of employees through organic means, such as retirement or resignation.
- Pre-employment Screening
Pre-employment testing, or pre-employment screening, is the act of performing checks to validate the details and personal/professional information provided by the candidate. Examples of different types of pre-employment screenings include, personality and skill tests, or job knowledge and cognitive skills tests. In addition, pre-employment screening could also involve verifying the candidate’s personal details such as name, residential address, and contact numbers.
- Base Wage Rate
The monthly salary or hourly wage paid for a job, irrespective of benefits, bonuses or overtime. It’s before anything extra is added, like bonuses, allowances, or any such compensation. Base pay is purely financial and can be expressed as an hourly rate, monthly or annual salary.
- Balanced Scorecard
A strategic planning and management system that is used to tie business activities to the vision and strategy of the organization. A balanced scorecard aims to improve internal and external communications, and monitor performance against goals. Developed in the early 1990’s by Dr David Norton and Dr Robert Kaplan, the balanced scorecard measures four areas of business: internal business processes, financial performance, customer knowledge, and learning and growth.
A balanced scorecard identifies and improves various internal functions of a business and their resulting external outcomes. It is used to measure and provide feedback to organizations for better decision-making for the organization. In doing so, the system connects the dots between big picture strategy elements such as the company’s mission, vision, core values, strategic focus areas and the more operational elements such as objectives, KPIs (key performance indicators), targets and initiatives.
- Behavioral-Based Interview
Behavioral-based interviews is a interview technique used to determine whether a candidate is qualified for a position by asking candidates for examples from their previous work experience that demonstrate the qualities the job requires. The aim is to get in-depth information on a job candidate’s experiences.
The purpose of behavioural questions are to gauge how candidates would respond in any given situation and what that response indicates about them. Behavioural questions are typically answered using the ‘CAR’ method: Context, Action, Result or the ‘STAR’ method: Situation, Task, Action, Result. They usually start with the interviewer asking “tell me about a time…” or “give me an example of…”.
As behavioral interview questions give interviewers a sense of how well the candidate aligns with the organization’s values, it is believed that an organization can ensure that candidates share the same definitions of success, effective management, and other key factors for successful operations. Using behavioral interview questions draws out the details, making it easier to recognize quality candidates.
- Behavioral Competency
Behavioral competencies are any behaviors, attitudes, or personality traits that help predict how successful a candidate will be at the job they are applying for. These competencies may also include knowledge, skills, and actions that distinguish a candidate from the hiring pool.
For each open position that an employer is hiring for, they should decide what behavioral competencies fit the position and create interview questions to find out if the candidate possesses them. This is because different industries may value certain competencies over others.
Well-established behavioral competencies for specific roles can help the management team determine what skills they need to help their employees develop.
A process of comparisons and measurement of an organization’s HR policies and practices with other organizations within their industry.
When it comes to remuneration, benchmarking is when a company looks at the wider industry to gain visibility into common compensation and benefits practices. The more granular and specific the benchmark is, the greater the insights the company will be able to yield from that data. The insights gained from benchmarking allows a company to keep up with the ever-changing business environment and develop suitable workforce management strategies.
Benchmarking establishes baselines, defines best practices, identifies improvement opportunities and creates a competitive environment within the organisation.