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Definitions of HR and Compensation Terms

Absenteeism: Absenteeism is defined as absences (with or without pay) of an employee from work due to his or her own illness, disability, or personal or family responsibility for a period of at least half a day but less than 52 consecutive weeks. The following leaves are excluded from the definition: maternity, adoption, paternity and parental leaves, vacation and holidays, bereavement leave, and jury duty.

Critical skills: are skills needed to perform key tasks identified as essential to an organization.

Defined benefit (DB) pension plan: a pension plan that specifies the benefits, or the methods of determining the benefits, but not the level or rate of contribution. Contributions are determined actuarially on the basis of the benefits expected to become payable.

Defined contribution (DC) pension plan: a plan that provides for future income from an individual account for each participant with benefits based solely on 1) the amount contributed to the participant’s account plus 2) any income, expenses, gains and losses, and forfeitures of accounts of other participants that may be allocated to the participant’s account. The benefit amount to be received by the participant at retirement is unknown until retirement.

Disability Management Program: The National Institute of Disability Management and Research defines a disability management program as a process in the workplace designed to facilitate the employment of persons with a disability through a coordinated effort and taking into account individual needs, the work environment, enterprise needs and legal responsibilities.

Discretionary plan: Funds allocated to the plan are based on subjective evaluations of organizational or individual performance.

Duty to accommodate: is an employer’s legal obligation to “implement whatever measures are necessary to allow its employees to work to the best of their ability.” According to the Canadian Human Rights Act, an employer must provide an accommodation when a disability prevents an employee from performing an essential job duty—as long as this accommodation does not impose undue hardship on the employer, such as by compromising safety or jeopardizing the organization’s solvency. In such cases, the employer has to demonstrate how providing an accommodation will cause undue hardship.

Employee Engagement: The Conference Board, Inc. defines employee engagement as a heightened emotional and intellectual connection that an employee has for his/her job, organization, manager, or co-workers that, in turn influences him/her to apply additional discretionary effort to his/her work.

Formal learning: involves curriculum designed and delivered to learners, and includes classroom instruction, e-learning, and courses offered at external institutions.

Experienced hire: A newly hired employee that has previous work experience.

Group RRSP: an employer sponsored retirement savings plan, similar to an individual Registered Retirement Savings Plan (RRSP), but administered on a group basis by the employer.

Recent graduate: A newly hired employee that has no previous work experience.

HR Business Partner: HR Business partners are the primary connection between the HR function (labour/employee relations, recruitment and selection, payroll and benefits, etc.) and business leaders. Business partners possess a deep understanding of the business or a line of business that allows them to deliver targeted HR services and programs provided by HR subject matter experts or centres of excellence.

HRIS: Human Resources Information System (also called Human Resources Management System). A software system used to manage the multiple functions of HR, including, but not limited to payroll, benefits, recruitment and selection, and performance management.

Hot skills: Skills that are in short supply and high demand in the labour market.

Hybrid pension plan: retirement plans that exhibit characteristics of both defined benefit (DB) and defined contribution (DC) plans.

Incentive plans: A variable component of total compensation used to motivate and reward employees for achieving performance objectives. Payouts from the plan do not affect base pay and are not guaranteed.

  • Short-term incentive Plan: A plan based on a short-term (1 year or less) performance. This type of plan may also be referred to as a short term variable pay plan, annual incentive plan, or performance bonus plan.
  • Mid-Term/Medium-term Incentive Plan: A plan based on medium-term (1–3 years) performance
  • Long-term Incentive Plan: A plan based on long-term (3 or more years) performance

Informal learning: is learning that occurs primarily spontaneously and outside of formal, designed activities. It is usually initiated by learners, and can involve everything from asking co-workers for help to seeking out expert knowledge on the Internet.

Learning 2.0: represents the move from viewing learning as a product created for learners to a process involving learners. This evolution of learning comes as the result of a changing workplace, shifting demographics, and an increase in employee-initiated learning activities.

Mission-critical positions: are positions that are identified as essential to organizational success.

Pension plan: a plan that provides income benefits, after retirement, from a trust or other separately maintained fund, by the purchase of insurance, or from general assets (unfunded plan).

Retirement: An employee retires when they voluntarily resign from an organization and meet the age-related requirements of a pension plan (either a corporate, private, and/or government pension plan). This includes both retirees who are eligible for a reduced pension (“early retirement”) and retirees who are eligible for a full pension. Employees who “retire” but are not eligible for any pension because they do not meet the age requirements of a pension plan are not considered retirees.

Social learning: can be either formal or informal, and involves learning through interactions with others. Formal social learning takes place through classroom group exercises and mentoring programs, while informal social learning takes place through collaborative work and peer knowledge sharing.

Strategic Workforce Planning: Strategic workforce planning is the analytic, forecasting, and planning process that connects and directs talent management activities to ensure the organization can execute its business strategy by having the right people in the right place at the right time, at the right cost.

Talent management: is a strategic process of ensuring that the organization can attract, motivate, develop, retain, and generally maximize its return on investment in people. Components of talent management are aligned and integrated to support organizational objectives. They include (but are not limited to) attraction, recruitment, assessment, employee development, reward strategies and practices, performance management, and engagement and retention programs.

Talent segmentation: refers to how your organization targets specific employee segments (i.e., classify employees based on criteria such as performance, potential, skills, mission critical roles, etc.) for the purpose of identifying specific individuals or groups for various retention strategies, enhanced development opportunities, or other initiatives.

Tenure: Tenure (total number of years with your organization) is calculated from the date an employee is hired on a permanent full- or part-time basis.

Total compensation: is defined as all non-taxable benefits and all T4 items paid to all employees, including taxable benefits, variable pay, etc.


  • Involuntary turnover: An employee departure that is initiated by the employer (e.g., severances, dismissals, redundancies, contract terminations).
  • Voluntary turnover: Turnover that is due to an employee-initiated departure. Sometimes referred to as avoidable or regrettable turnover. Excludes: retirements, dismissals, severances, redundancies, transfers, deaths, and leaves (disability, parental, sabbatical, and other leaves of absence).

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