encyclopedia human resource

Encyclopedia Human Resource Management (2289 Terms) Powered by www.drawpack.com; All rights reserved.

A to ZManagement

TopicKeyword Definition

AHuman

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Ability to Pay This term is found in labor negotiations and refers to the ability of an organization to afford a wage or benefit cost increase.

AHuman

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Absolute AssignmentThis is when a right to a benefit is transferred from one person to another. (An example is the ownership of a life insurance

policy or the right to retirement benefits).

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Absolute ratingsA rating method where the rater assigns a specific value on a fixed scale to the behavior or performance of an individual

instead of assigning ratings based on comparisons between other individuals.

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Accelerated Life

Insurance Benefits

This is when benefit payments from life insurance or long-term benefit plans are increased to cover expenses for a chronically

ill individual.

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Accidental Death and

Dismemberment

This describes common group benefit plan coverage where insurance pays for a covered individual's permanent

disfigurement, loss of a body part, or permanent loss of use of a body part or function of the body, or death.

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Dismemberment

(AD&D) Rider

An addition to a Life Insurance Policy, it provides these benefits as a supplement to basic death insurance coverage. Typically,

this additional amount is payable only if the insured dies in an accident or loses any two limbs or his/her eyesight in an

accident. (Some riders are third party administered).

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Dismemberment

Insurance (AD&D)

An insurance plan that provides benefits in the event of loss of life, limbs, or eyesight as the result of an accident. As costed in

ERI's Benefit Assessor software (and as sold), it is priced as U.S. cents ($.01) per $1,000 of coverage on a monthly basis.

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Accounting Principles

Board (APB)

This Board published rules by which United States CPAs conducted their accounting. The Financial Accounting Standards

Board (FASB) replaced it in 1974.

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Accounting Research

Bulletin (ARB)These were the bulletins published in the U.S. before 1960, which stated the generally accepted accounting principles.

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Accrual BasisIn accounting, this is the method where expense items and income are recognized as incurred or earned, even if they have not

yet been received or paid. This is also called ACCRUAL METHOD. It is the opposite of CASH BASIS.

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Accrual of BenefitsIn pension (defined benefit) plans, it is the accumulation and counting of pension credits for years of experience, age, and

earnings. In profit sharing plans (defined contribution), it is the vesting of funds accumulated in personal accounts.

AHuman

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Accrual of Vacation

Pay

This is the counting of vacation time due. Usually accumulation is by the number of hours or days worked. For example, after

two years of service, an employee would have the right to two weeks of paid vacation.

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Accrued LiabilityThe value of a pension plan's promised benefits calculated by an actuary (actuarial valuation), taking into account a set of

investment and benefit assumptions to a certain date.

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Accumulated Benefit

Obligation (ABO)

The value of a Pension Plan's vested and non-vested promised benefits using a formula (or formulae) typically based upon

employees' years of service.

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Accumulated Cost of

Insurance

This basic value reflects the cost of a single payment (premium) at the end of a term necessary to provide benefits to the

insured that would have collected during that term.

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Accumulated Funding

Deficiency

In the United States, this is the amount by which the accumulated promises of a Pension Plan, as compared to the funds

available, do not meet certain minimum funding standards.

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Accumulated Value In profit sharing plans, this is the amount of money available in an individual account, including earnings.

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Accumulation OptionA life insurance term where dividends are left in a policy so that they can earn tax-free interest. Sometimes called Accumulated

Interest Option.

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Accumulation Period A Deferred Annuity period in which premiums are payable.

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Acid TestA ratio used by financial analysts where the available assets (cash, marketable securities, and account receivables) are divided

by the current liabilities (Current Assets/Current Liabilities). Also called the Quick Ratio.

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Acquisition

When one organization purchases another, with the surviving organization being the purchaser. (As opposed to a Merger,

where both organizations might change forms.) Acquisitions may be of two types - purchase of assets or purchase of stock.

The latter includes purchase of all liabilities, including retirement and welfare plans. The former often does not include these

liabilities (although union fund retirement plan obligations are not escaped with an asset only purchase).

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Acquisition Expenses These are costs associated with and caused by one organization purchasing another. Also called Acquisition Costs.

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Across-the-board

Increase

General increase amount given to all eligible employees; may be either a flat amount or a percentage of base rate, sometimes

referred to as general increase.

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activationThe employment of a nonconstraint resource for the sake of keeping busy unrelated to whether it is useful in supporting

system throughput.

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Actively at Work

Provision

Should an employee's health insurance coverage be scheduled to commence and that employee is absent from work for

certain specified reasons, the coverage will not commence until the employee returns to work.

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Activities of Daily

Living (ADL)

Activities of daily living include getting in and out of bed, dressing, bathing, eating, and generally getting around inside the

home.

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Actual Hours The number of hours worked during a pay period, as compared to the scheduled hours.

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Actuarial

Assumptions

These are assumptions made by actuaries regarding mortality, morbidity, interest, expense and other forecasts. In insurance,

they are used to set insurance reserves. In retirement plans, they are used (along with salary levels and turnover) to determine

the annual contribution deemed necessary to a pension plan.

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Actuarial Cost

Method

One of many mathematical approaches by which an actuary determines the annual amount a Pension or Benefit Plan Sponsor

should contribute.

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Actuarial Department The department, within an insurance company, that determines the reserves needed for liabilities.

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Actuarial EquivalentAn alternative form of a benefit equal in value. For example, a Lump Sum payout of a benefit rather than smaller monthly

payments.

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Actuarial ValuationIn a pension or a benefit plan trust, this is the total amount needed to meet promised benefits. This set of mathematical

procedures typically calculates the value of benefits to be paid, the funds available, the annual contribution required, and the

amount of expense that an organization can take on for accounting and tax purposes.

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Actuarially SoundThis is a description of when a Voluntary Employee Beneficiary Association Plan (VEBA) or pension plan has the amounts of

funds necessary to meet liabilities.

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ActuaryIn life insurance, this is a professional who calculates mortality rates, morbidity rates, lapse rates, premium rates, policy

reserves and other values. In pension work, a professional who applies these and other principles to calculate retirement plan

obligations.

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ADEA (Age

Discrimination in

Employment Act)

In the United States, the Age Discrimination in Employment Act of 1967 protects employment rights of individuals age 40 and

over. 1978 amendments raised the minimum mandatory retirement age to 70 years of age for most employees.

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Adjustable Life

Insurance Policy

A variable life insurance contract where a person can change his or her annual premiums and the amount of coverage

provided.

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Administrative

Services Only (ASO)

Common to health welfare plans, where an organization employs an outside organization to provide administrative services for

self-funded plans. The ASO Contract or provider provides claim and policy administration, but the purchasing organization

retains financial responsibility. ASO providers are also called THIRD-PARTY ADMINISTRATORS.

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AdministratorAn organization designated under the legal terms of the contract, plan, or trust to operate and direct a Benefit Plan. This is

almost always a corporation, rather than an individual or the Plan Sponsor.

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Admitted ReinsurerIn the United States, this is a corporation that is licensed to accept reinsurance in a state or territory. Also called an

AUTHORIZED REINSURER.

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Advance Funding An organization deposits funds in a plan in advance of the time when funds will be distributed.

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Advanced

Underwriting

Department

This is the insurance industry's misnomer for the main company's home office department that provides technical and

marketing assistance to agents in the field.

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Adverse ImpactThis is where a not obviously discriminatory practice affects a protected group of employees. This term is used in salary

administration, retirement, and benefit discrimination tests, as well as in general human resource practices.

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Adverse SelectionOccurs when an employee or group of employees purchase or select coverage with a greater than likely loss at the expense of

an insurance company (or the organization if it is self-insured). This is also called ANTI-SELECTION.

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Affiliated DirectorA Board of Directors member who is not a current employee, but who may be either a retired employee or one who does

business with the organization on which he/she serves as a member.

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Affinity ProviderAn Internet term related to the sharing of links. In some cases, two sites link to each other on a reciprocal basis. The term

partner is not used.

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Affirmative action Carried out on behalf of women and disadvantaged groups and members of such groups are placed in dominant positions.

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Age Discrimination In the United States, an employer is prohibited from treating individuals over age 40 differently because of their age.

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Age of Majority The legal term used for when an individual can enter into and be bound by a legal contract.

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Agency

Several definitions: 1) A service or business authorized to act on the behalf of others. (For example, an employment agency

that refers employees to organizations for a fee.)(2) A government's administrative section. (3) A legal term describing the

relationship between two parties -- a principal and his or her agent, representing the principal in business transactions with a

third party.

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Agency Agreement A contract that describes an agent's authority.

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Agency System

A distribution system whereby insurance companies use their own commissioned agents to sell and deliver insurance policies.

The agency system is the most common system for distributing individual life insurance products and includes the branch

office distribution system and the general agency distribution system. Also called the ordinary agency system. See also branch

office distribution system, brokerage distribution system, and general agency distribution system.

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AgentAn individual who sells insurance policies as either a Direct Writer or Independent Agent. Also services insurance policies for

clients.

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Agent of Record The agent or broker who is recognized by the insurer as the person to whom commission is to be paid.

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Agent's StatementThe portion of the insurance application in which the agent reports anything he or she knows or suspects about the proposed

insured that is not reported by the applicant or proposed insured.

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Aggregate Funding

Method(s)

A method of accumulation of money for a pension plan, where an actuary determines the present value of all future payments

of benefits and deducts from this value any funds that may be on hand with trustee or with the insurance company and

distributing the balance as a cost over the future.

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Aggregate Mortality

Table

A type of mortality table that shows total statistics for the probability of living and dying throughout a person's entire life cycle. It

is based on the combined statistics of both the Ultimate Mortality Table and the Select Mortality Table.

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Aging Survey DataThe practice of increasing market survey data by an assumed percentage, which is representative of wage movement, to bring

the data to a consistent point in time. Also known as 'advancing' or 'trending' the data.

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Aleatory Contract

A contract under which one party provides something of value to another party in exchange for a conditional promise. This

promise is that the other party will perform a stated act if a specified, uncertain event occurs. Insurance contracts are aleatory

(dependent on chance) because the policy owner pays premiums to the insurer, and in return the insurer promises to pay

benefits if the event insured against occurs.

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Alien CorporationA company that is incorporated under the laws of another country. Compare to DOMESTIC CORPORATION and FOREIGN

CORPORATION.

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Alienation of Benefits

The assignment of a plan participant's benefits to an individual other than the participant. In the United States, ERISA generally

prohibits such alienation of benefits, although exceptions to this rule exist and include the use of a participant's vested benefit

as collateral for a loan. The ERISA prohibition on alienation of benefits prevents creditors from attaching an individual's

pension benefits.

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All-Causes

Deductible

In the context of health insurance, this is a deductible that must only be satisfied once during a given period of time. If the

period of time is a calendar year, as it usually is, then this type of deductible is known as a calendar year deductible. Contrast

with a PER CAUSE DEDUCTIBLE.

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Allocated FundingA method of funding a pension plan whereby a portion of the total plan funds is allocated to each participant. This type of

funding is often achieved through the purchase of annuities or insurance contracts for each participant. Contrast with

unallocated funding.

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Allowance

Supplemental

Payments such as those for hardship, relocation, or the education of dependent children. It is distinguished from differential,

which is a payment to offset differences in costs between the home and assignment locations.

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All-Salaried Work

Force

A pay policy that makes exempt/nonexempt status 'invisible' to workers. Under this policy, all employees are paid on a salaried

basis and all pay is defined in the same terms, such as a monthly or annual salary.

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Alternative Minimum

Tax (AMT)

This is an IRS mechanism created to ensure that corporations, trusts, high-income individuals, and estates all pay at least

some minimum amount of tax, regardless of deductions, exemptions or credits. The AMT is triggered when there are large

numbers of personal exemptions on state and local taxes paid, by Incentive Stock Option (ISO) plans, or large numbers of

miscellaneous itemized deductions or medical expenses.

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American Council of

Life Insurance (ACLI)An organization that collects and disseminates data on life insurance markets in the United States.

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American Stock

Exchange (AMEX)An organization overseeing the buying and selling of publicly owned shares of stock listed on the exchange.

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Americans With

Disabilities Act of

1990 (ADA)

This law creates non-discrimination protection for people with disabilities, similar to the Title VII of the Civil Rights Act of 1964

extended to other minorities. Under the law, employers may not refuse to hire a person due to his or her disability.

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American-Style

Option

A stock option contract that can be exercised at any time between the date of purchase and the expiration date. Most

exchange-traded options are American-Style options vs. European-style options, which may only be exercised during a

specified period of time just prior to expiration.

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Amortization1) The gradual elimination of a liability, such as a mortgage, in regular payments over a specified period of time. Such

payments must be sufficient to cover both principal and interest. 2) Writing off an intangible asset investment over the

projected life of the assets.

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Amortization Basis The process of paying off an interest-bearing liability through a series of installment payments.

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analytic workplace

design

Design based on established physical and behavioral concepts, including the known working habits of people. Produces a

workplace environment well within the range of human capacity and does not generally require modification or improvement.

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Anniversary DateThe date used in some merit-pay systems at which a review of the employee's salary occurs. It may be the anniversary of

hiring, last pay increase, promotion or some other reference point.

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Anniversary YearThe 12-month period following an employee's date of hire or date of re-employment (after a one-year break in service), and

each succeeding 12-month period.

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Annual Benefits

Statements Under

The Employee

Retirement Income

Security Act of 1974

(ERISA)

Employers are required to provide participants in qualified plans specific information about the status of their projected pension

income or account balances.

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Annual BonusUsually a lump-sum payment (cash, shares, etc.) made once a year in addition to an employee's normal salary or wage for a

fiscal or calendar year. Generally nondiscretionary and not based on predetermined performance criteria or standards.

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Annual Bonus PlansA plan in which each year, usually at the end of the year, employees become eligible for an additional amount of money or

other reward.

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Annual Budget A 12-month operating budget ending on the last day of the calendar year (i.e. December 31 of that year).

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Annual IncentiveUsually a lump-sum payment (cash or stock) made in addition to an employee's normal pay for a fiscal or calendar year, based

on performance (individual, business unit and/or company). May also be called an annual bonus.

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Annual Information

Return

In Canada, a report containing financial and other information that pension plans must file annually with the appropriate

provincial or federal government.

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Annual Lease

Valuation

Automobiles

Enables Employers, in a number of ways, to determine the value of a worker's personal use of a company car.

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Annual Renewable

Term Life Insurance

(ARTLI)

Life insurance that allows an individual to continue the coverage at the end of the year for a specified number of years. This

coverage is also called YEARLY RENEWABLE TERM INSURANCE (YRT).

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Annual Report Form

5500

In the United States, a detailed report of membership and financial information pertaining to the operation of a pension plan.

This report must be filed annually with the Internal Revenue Service.

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Annual StatementAn accounting report that insurers must file each year with the appropriate regulatory agency. This report contains detailed

accounting and statistical data that regulators use to evaluate a life and health insurance company's solvency and its

compliance with insurance laws.

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Annualized Increase

Percent (also,

Equivalent Annual

Percent Increase)

Salary increase that is expressed as an annual rate of increase, calculated by dividing the number of months since the last

increase (the dominator) into 12 (the numerator) and multiplying the result by the increase percent.

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Annually Renewable

Term (ART)

Insurance

See yearly renewable term (YRT) insurance.

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Annuities and Annuity

Contracts

An annuity is a contract for the payment of specified or objectively determinable periodic payments over a specified period of

time or over the lifetime of the recipient.

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Annuity Mortality

Table

A calculation of probability of dying at each age. Used by actuaries to calculate premiums and reserves for annuities in which

benefits are paid only if a designated person is alive. Annuity mortality tables usually project lower rates of mortality than do

mortality tables that are used for life insurance. See also MORTALITY TABLES.

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Anti-SelectionOccurs when an employee or group of employees purchase or select coverages with a greater than likely loss at the expense

of an insurance company (or the organization if it is self-insured). This is also called Adverse Selection.

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Apparent AuthorityWhen a principal (client who hires an agent) suggests to a third party that the agent may act on the principal's behalf. The third

party believes in the authority of the agent, but that authority was not expressly conferred; it is implied.

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ApplicantThe person who has applied to a job advertised or someone who has submitted their CV for inclusion on the searchable

database.

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ApplicationA paper or electronic form that must be completed by an employee who desires a certain benefit. Information provided by the

individual allows the insurance carrier or employing organization the information necessary to enroll (or not enroll) the

individual.

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Appraisal See Performance planning.

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Approval Type

Temporary Insurance

Agreement

An agreement issued along with a conditional premium receipt that provides temporary life insurance coverage as of the date

the insurer approves the proposed insured as a standard risk. See also insurability conditional premium receipt and temporary

insurance agreements. Compare to insurability type temporary insurance agreement.

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ArbitrationFor collectively bargained single employer plans, the bargaining agreement's grievance and arbitration procedure may double

as a claims procedure.

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Area Differential

Several definitions: 1) Allowance paid to compensate expatriate employees for medium-term cultural and hardship factors

present in his or her country of assignment as compared to the base country. (This is also known as a hardship allowance.) (2)

Allowance paid to domestic employees in some geographic areas, which is based on different average pay levels and or cost

of living.

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Area Wage SurveysThese are standard survey formats used across geographic boundaries so that consistent reporting can illustrate the same

jobs and their different pay in various geographic areas.

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Arithmetic MeanArithmetic Mean (as defined by the U.S. DOL) is the rate of wages to be determined, to the extent feasible, by adding the

wages paid to workers similarly employed in the area of intended employment and dividing the total by the number of such

workers. This computation usually produces a Weighted Average.

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assessing

The process of conducting In Process Reviews (IPRs) and After Action Reviews (AARs). IPRs help to determine initial

expectations, ascertain strengths and weakness of both employees and the organization, and identify key issues and

organizations whose willing support is needed to accomplish the mission. AARs determine how well the goals are being

accomplished, usually by identifying areas to sustain and improve.

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Assessment CenterA method for assessing aptitude and performance; applied to a group of participants by trained assessors using various

aptitude diagnostic processes in order to obtain information about applicants' abilities or development potential.

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Assessment MethodAn early method of funding life insurance where members of the plan were charged in advance for the amount of money that

the administrators estimated would be needed to pay each year's death claims. Also called the pre-death assessment method.

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Assessor SeriesGeographic, Salary, Benefit, Relocation and Executive Compensation software and databases designed to assist the

compensation and benefits analyst and manager with his/her research.

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AssetAn asset is anything of value that is owned by an organization or an individual. Examples are cash, computer equipment, and

investments. Assets can be any percentage of real property or of personal property that can be liquidated in order to pay debts.

Assets are shown on the balance sheet of a company's Annual Statement.

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Asset Investment

Performance

The periodic review of the actions of the asset manager(s) who are investing a qualified pension plan's assets. The plan

administrators of such plans have a fiduciary responsibility to conduct this review regularly.

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Asset SaleA transaction whereby the purchaser only acquires title to certain identified assets and or liabilities of the seller, with no

obligation for any non-identified liabilities or assets. (A buyer may, for example, acquire only one line of product from a seller.)

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Asset Share

Calculation

A method of calculating that imitates the way in which the assets of a particular block of policies should grow, depending on

certain assumptions about future interest rates, morbidity, mortality, expenses and so on.

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Asset-Liability

Matching

The process of investing, purchasing, selling and otherwise adjusting an insurance company's asset holdings so that cash is

available when it is needed to cover the company's liabilities.

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Assignee The party to whom all or certain contractual rights are transferred under an absolute or collateral assignment.

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AssignmentSeveral definitions: 1) The transfer of ownership rights in a life insurance policy or other type of contract from one party to

another. (2) The document that causes the transfer of ownership rights to go into effect. See also ABSOLUATE ASSIGNMENT

and COLLATERAL ASSIGNMENT.

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Assignment Location The country in which an expatriate lives and works during an assignment.

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Assignment of

Benefits

An authorization directing an insurer to make payment directly to a provider of benefits, such as a physician or dentist, rather

than to the insured.

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Assignor The person or party who transfers certain contractual rights under an absolute or collateral assignment.

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Association

Organization

Insurance

Organization insurance extended to the members of a trade, professional, or other association.

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Assumption

Reinsurance

A reinsurance agreement by which one company permanently transfers (cedes) full responsibility for a block of policies to

another company. After the cession, the ceding company is no longer a party to the insurance agreement.

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Attained AgeThe current age of the insured. Also refers to the age of the insured at the time the insured's policy was issued, plus the

number of years elapsed since the policy was issued.

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Attained Age

Conversion

The changing of a life insurance policy from one form of insurance to another (such as from term life insurance to whole life

insurance) at a premium rate that is based on the age the insured person has reached at the time the change takes place.

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Attendance BonusAttendance Bonuses are provided to employees who have maintained perfect attendance for a period of time, typically a full

quarter or year. These bonuses are usually provided in the form of a flat cash amount, additional paid time off, or gift awards

upon completion of the period of perfect attendance.

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Attending Physician's

Statement (APS)

A written statement from a physician who has treated, or is currently treating, a proposed insured or an insured for one or more

conditions. The statement provides the insurance company with information relevant to underwriting a risk or settling a claim.

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attributes Characteristics or qualities or properties. Attributes of the leader fall into three categories: mental, physical, and emotional.

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AttritionA term used to describe voluntary and involuntary terminations, deaths, and employee retirements that result in a reduction to

the employer's physical workforce.

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authoritarian

leadership

A style of leadership in which the leader tells the employees what needs to be done and how to perform it without getting their

advice or ideas.

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Authorized ReinsurerIn the United States, this is a corporation that is licensed to accept reinsurance in a state or territory. They are often also called

an Admitted Reinsurer.

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Autocratic leadershipLeader determines policy of the organization, instructs members what to do/make, subjective in approach, aloof and

impersonal.

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Automatic Dividend

Option

For a specific life insurance policy, this is the dividend option that applies in the event that the policy owner does not choose an

option. See DIVIDEND OPTIONS.

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Automatic

Nonforfeiture Option

For a specific life insurance policy, a specified nonforfeiture benefit that automatically becomes effective when a renewal

premium is not paid by the end of the grace period and the policy owner has not elected another nonforfeiture option. See also

nonforfeiture options.

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Automatic Premium

Loan (APL)

A life insurance nonforfeiture option that allows the insurer to pay overdue premiums on a policy by establishing a loan against

the policy's cash value. See also NONFORFEITURE OPTIONS.

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Automatic

Reinsurance Treaty

A reinsurance agreement in which the reinsurer agrees, for a stipulated type of risk, to accept each risk or a portion of each

risk submitted by the ceding company, up to a certain limit, provided the ceding company insures up to its usual retention limit.

In this agreement, the ceding company assumes full underwriting responsibility for all cases reinsured.

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Automatic Wage

AdjustmentAutomatically increasing or decreasing wages according to a specific plan formula.

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Automatic Wage

Progression

Automatically increasing wages after specified periods of service, until the employee reaches the top of his or her salary range.

Automatic wage progression often is achieved through an automatic step-rate pay system.

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Automobile Benefits An allowance to an employee for the use of his/her own automobile, which may or may not be taxable.

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Automobile InsuranceCompanies that maintain a fleet of cars for the use of employees who require transportation for business purposes may

purchase insurance for automobiles and drivers of the automobiles.

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AverageThe average is the result of dividing the sum of two or more quantities by the number of quantities. Example: (a + b + c)/3 = the

average. See also mean.

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Average Frequency

(Of Salary Increases)

Normally calculated on a department-wide or company-wide basis. It is determined by summing up the months between

increases granted for the employee groups and dividing by the number of increases and employees.

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Average Hourly

EarningsHourly pay determined by dividing hours worked per period into the total wages earned for that period.

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Average Indexed

Monthly Earnings

In the United States, this is the figure on which social security disability, retirement and other benefits are based. The figure is

an average of the monthly earnings on which a worker has paid Social Security tax. The figure is indexed, that is, adjusted to

compensate for inflation.

AHuman

Resource

Management

Average Percent

Increase

Calculated by dividing the sum of salary increase amounts for all eligible employees by the eligible payroll. Both the numerator

and the denominator include those who were eligible and participated but received no increase.

AHuman

Resource

Management

Average Straight-

Time Hourly Earnings

Hourly pay determined by dividing the hours worked per period into the total straight-time earnings for the period (excluding

overtime).

AHuman

Resource

Management

AwardsAwards, prizes and gifts are a traditional way for employers to recognize and reward employees for their contributions to the

company. Such contributions may comprise long years of service, a cost-saving suggestion, a good safety record, or

outstanding performance.

BHuman

Resource

Management

Baby boomers Those born between 1946 and 1964, when birth rates rose sharply, and now a popular target group for marketers.

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BHuman

Resource

Management

Back PayThe amount of lost earnings accruing between the time a plaintiff terminates employment and a subsequent measuring date.

Like Front Pay, it is not subject to the Civil Rights Act of 1991 $300,000 liability cap. Each can be awarded over and above any

compensatory or punitive damages.

BHuman

Resource

Management

Back-Loaded Policy

A life insurance policy (usually a universal life insurance policy) in which most of the expense charges occur when the policy

owner surrenders the policy or makes cash withdrawals from the policy. Such charges are usually highest in the early policy

years and are often eliminated at the end of a certain number of years. See also front-loaded policy and universal life

insurance.

BHuman

Resource

Management

Back-LoadingThe practice of providing a higher accrual of pension benefits during a participant's later years of employment. The practice is

designed to encourage and reward long service.

BHuman

Resource

Management

Backup WithholdingRefers to withholding 20% of payments for federal income taxes unless the payee has a correct Social Security number on file

with the employer, or is otherwise not subject to withholding.

BHuman

Resource

Management

Bail OutAn acquisition transaction (usually initiated by the seller) in which the seller is in poor financial condition and another company

purchases the financially troubled company and improves their financial condition.

BHuman

Resource

Management

Balance SheetA financial statement of a company or other entity, showing what it owns (assets), what it owes (liabilities), and the owner's

investment (shareholders equity) at a point in time such as the end of the fiscal year.

BHuman

Resource

Management

Balance Sheet

Approach

An accounting term that describes a situation where debits and credits must match. The balance sheet approach is used to set

expatriate compensation. There the goal is to protect or equalize an expatriate's purchasing power while on assignment

abroad. Its primary objective is to ensure equity among expatriates and their home or base country peers.

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BHuman

Resource

Management

Balanced Scorecard

A popular strategic management concept developed in the early 1990's by Drs. Robert Kaplan and David Norton, the balanced

scorecard is a management and measurement system which enables organizations to clarify their vision and strategy and

translate them into action. The goal of the balanced scorecard is to tie business performance to organizational strategy by

measuring results in four areas: financial performance, customer knowledge, internal business processes, and learning and

growth.

BHuman

Resource

Management

Band GradingThe grouping of life insurance policies according to death benefit amounts for the purpose of calculating loading or expense

charges.

BHuman

Resource

Management

BankruptcyA standard bankruptcy liquidates a business or individual. Then, subject to specific exemptions, assets of the bankrupt are

collected and paid to creditors.

BHuman

Resource

Management

Bar Chart A graph displaying data in a frequency distribution represented by horizontal or vertical bars.

BHuman

Resource

Management

Base Country or

Home Country

In international compensation, this is the country upon which an expatriate's compensation is based. It is usually the

expatriate's home country or the country in which the employee's headquarters is located.

BHuman

Resource

Management

Base PayBase pay is the salary that would be paid for a position on the basis of its level. For expatriate's it is the stated home country

salary before any addition of differentials, allowances or incentives for Foreign Service or required contributions.

BHuman

Resource

Management

Base PayrollDetermined by the sum of annual salaries and or wages (base rates) paid at the opening of business on the first day of the

plan year or last day of prior year, e.g., Dec. 31, before any increase.

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Resource

Management

Base Rate or Base

Wage Rate

The rate of pay set for a unit of work before anything extra is added. This rate does not include things like shift differentials,

benefits, overtime, incentive premiums or any other pay element other than the base rate.

BHuman

Resource

Management

Base Salary or Wage The basic rate of pay (excluding overtime pay).

BHuman

Resource

Management

Base wage rate (or

base rate)

The hourly rate or monthly salary paid for a job performed. Does not include shift differentials, benefits, overtime, incentive

premiums, or any pay element other than the base rate.

BHuman

Resource

Management

Basic Death BenefitThe death benefit according to the terms of the original, basic contract of a life insurance policy. The basic death benefit does

not include the benefit for any supplementary riders, such as an accidental death benefit (ADB) rider. For policies whose death

benefit remains constant, the basic death benefit is equivalent to the face amount.

BHuman

Resource

Management

Basic Earnings Per

Share

The net earnings available to common shareholders of an organization divided by the weighted average of total shares

outstanding. No consideration is given in this calculation for common stock equivalents such as stock options.

BHuman

Resource

Management

Basic Mortality Table A mortality table without a safety margin. Also called a basic experience table. See also mortality table and safety margin.

BHuman

Resource

Management

Basic Plan with Major

Medical

A medical insurance plan that provides for coverage of almost all hospital and surgical charges and some other medical

expenses, up to a specified amount without a deductible.

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BHuman

Resource

Management

Basic ServicesCommonly covered items on an insurance policy (e.g. Dental procedures specified in a dental insurance plan such as

diagnostic, preventive, and routine restorative dental services).

BHuman

Resource

Management

Basket Clause

Several definitions: 1) From an investment point of view, this is a provision that allows insurance companies to invest a small

percentage of their assets generally without regard to statutory restrictions. (2) From an accounting point of view, this is a

clause that permits life, and health insurers to hold a specified amount of their assets as nonauthorized assets, which are not

restricted in the same way as authorized assets.

BHuman

Resource

Management

Behavior Based

Appraisal

Any performance assessment system that concentrates on the behaviors of those being rated (such as behavioral expectation

scales, behaviorally anchored rating scales, or behavioral observation scales).

BHuman

Resource

Management

Behavioral based

interview

An interview technique which focuses on a candidates past experiences, behaviors, knowledge, skills and abilities by asking

the candidate to provide specific examples of when they have demonstrated certain behaviors or skills as a means of

predicting future behavior and performance.

BHuman

Resource

Management

Behavioral

competency

The behavior of the employee which is the subject of measurement and appraisal in terms of whether or not the behaviors

shown by an employee are those identified by job analysis/competency profiling as those contributing to team and/or

organizational success.

BHuman

Resource

Management

Behaviorally

anchored rating scale

(BARS)

An appraisal that requires raters list important dimensions of a particular job and collect information regarding the critical

behaviors that distinguish between successful and unsuccessful performance. These critical behaviors are then categorized

and appointed a numerical value which is used as the basis for rating performance.

BHuman

Resource

Management

beliefs Assumptions and convictions that a person holds to be true regarding people, concepts, or things.

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BHuman

Resource

Management

Below Market Rate

Employee Loans

This is a compensation-related loan. It is any loan bearing a below-market interest rate made in connection with performance

of services directly or indirectly between an employer and employee.

BHuman

Resource

Management

Benchmark jobA standard job used to make pay comparisons, either within the organization or to comparable jobs outside the organization, to

develop or validate a job-worth hierarchy. Pay data for these jobs are readily available in purchased surveys.

BHuman

Resource

Management

Benchmark Job Data Market and company data for surveyed jobs.

BHuman

Resource

Management

benchmark measures A set of measurements (metrics) that is used to establish goals for performance improvements. These are often derived from

other firms that display "Best In Class" performance.

BHuman

Resource

Management

BenchmarkingA technique using quantitative or qualitative data to make comparisons between different organizations or different sections of

the organizations.

BHuman

Resource

Management

BeneficiaryThe person designated to receive the benefits resulting from the death of an employee, such as the proceeds of a life or

accidental death insurance policy or benefits from a pension plan. See also Contingent Beneficiary, Irrevocable Beneficiary,

Primary Beneficiary, and Revocable Beneficiary.

BHuman

Resource

Management

Beneficiary

Declaration

Specific to Canada, an insurance policy beneficiary designation that is made in a separate written document after the

insurance policy has been issued.

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BHuman

Resource

Management

BenefitFor insurance purposes this is the amount of money paid when an insurance claim is approved. Also known as the policy

benefit.

BHuman

Resource

Management

Benefit of

Survivorship

A term used to describe the fact that annuity payments will be made as long as the designated recipient is alive at the time the

payment is due. This concept is used in the calculation of amounts due under life insurance settlement options.

BHuman

Resource

Management

Benefit Plans - Health

CareThe two types of health care benefit programs are indemnity programs and health maintenance organizations.

BHuman

Resource

Management

Benefit Plans -

Retirement

A Retirement Plan is an agreement on the part of management to provide a vehicle for the retirement income needs of

employees. Such plans may be qualified or non-qualified for tax purposes.

BHuman

Resource

Management

Benefit ReductionsA cost-containment measure utilized by an organization to reduce its expenses through reduction in benefit coverage (e.g.

increase in medical plan deductibles, increase in employee contributions, reduction in annual limits in dental plans).

BHuman

Resource

Management

Benefit ScheduleUnder an organization's insurance plan, this is a table or schedule that specifies the amount of coverage, provided for each

class of insured. Insureds are often classified with reference either to earnings or to rank or position. Also called a schedule of

benefits.

BHuman

Resource

Management

Benefit Statements Each year employees must be given an individual benefit statement that explains accrued benefits to date and vesting status.

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Resource

Management

Benefits

Employers provide a package of additions to the base salary to employees. These benefits can include health insurance,

dental insurance, life insurance, disability insurance, a severance package, tuition assistance, and more. On average,

organizations spend 41 cents for benefits for every dollar of payroll. That‘s 29 percent of the total employee compensation

package.

BHuman

Resource

Management

Benefits PackagesThe total value of all non-cash compensation elements, including but not limited to income protection, health coverage,

retirement savings, vacation and income supplements for employees, provided in whole or in part by employer payments.

BHuman

Resource

Management

Bennett AmendmentAn amendment to the Civil Rights Act of 1964 that states that it shall not be unlawful practice to differentiate compensation on

the basis of sex if such differentiation is authorized by the Equal Pay Act.

BHuman

Resource

Management

Bereavement leavePaid days off following the death of an employee‘s spouse, parent, child grandparent or in-law so that the employee may attend

funeral proceedings, etc.

BHuman

Resource

Management

Best Earnings PlanA benefit plan that calculates a recipient's retirement benefit based on the period during which the employee earned his or her

highest income.

BHuman

Resource

Management

Beta

A mathematical measure of the volatility of a particular stock, mutual fund, and/or portfolio in comparison with the entire

market. Specifically, it measures the stock, fund or portfolio performance during the last 5 years. A beta of 1.0 indicates that an

asset closely followed the market; a beta greater than 1.0 indicates a greater volatility than the market - a beta of less than 1.0

indicates that the asset was less volatile than the market.

BHuman

Resource

Management

BFOQ Bona Fide Occupational Qualifications – legally defensible minimum qualifications to perform the job.

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BHuman

Resource

Management

Bilingual DifferentialBilingual Differential is a cash differential that is paid in addition to base salary for language skills that are required in a job. The

differential also provides a continual reminder to the employee that he or she is compensated for this ability in addition to

performance of the job.

BHuman

Resource

Management

Bimodal Distribution A probability distribution with two modes.

BHuman

Resource

Management

Binding Premium

Receipt

A type of initial premium receipt that makes insurance coverage effective immediately, but only until the insurance company

either rejects the application or approves it and issues a policy.

BHuman

Resource

Management

Binomial Option

Pricing Model

A mathematical formula that determines a theoretical value for an option on stock subject to trade on an option exchange. May

be used by a company that chooses to apply the FAS123 rule to stock granted to employees.

BHuman

Resource

Management

Birthday RuleA provision that specifies the manner in which benefits for dependent children are to be coordinated between two insurance

plans. According to the birthday rule, benefits for dependent children will be paid by the plan of the parent whose birthday falls

earlier in the year.

BHuman

Resource

Management

Black-Scholes ModelA mathematical model originally derived by economists Myron Scholes, Robert Merton, and Fischer Black to value stock

options traded on public markets. The Black-Scholes Formula provides a way to determine the worth of a CALL OPTION at

any given time. To find out how to use this formula, see DLC Course 22: Black-Scholes Valuations.

BHuman

Resource

Management

Blended Rates

Several definitions, two of which are listed: 1) Organization mortality rates that are based, in part, on a group's own experience

and in part on manual rates. These Blended Rates are used to determine the appropriate organization insurance premium

rates for intermediate-size groups. See also Experience Rating and Manual Rates. (2) A rate offered by a lender, which is

somewhere between a previous rate and a new loan rate.

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BHuman

Resource

Management

BLS U.S. Government's Bureau of Labor Statistics.

BHuman

Resource

Management

Blue Cross PlanA health care plan offered by a regionally-operated health care provider, having any of these insurance products: PPO, fee-for-

service, HMO, or POS. A provider of such plans belongs to the Blue Cross and Blue Shield Association.

BHuman

Resource

Management

Blue Shield PlanA health care plan offered by a regionally-operated health care provider, having any of these insurance products: PPO, fee-for-

service, HMO, or POS. A provider of such plans belongs to the Blue Cross and Blue Shield Association.

BHuman

Resource

Management

Bonafide

Occupational

Qualification (BFOG)

Typically refers to a valid job requirement, i.e., a knowledge, skill or an ability level that is required for competent job

performance. Origin of the term BFOQ is found in Title VII of the Civil Rights Act (1964).

BHuman

Resource

Management

BondA debt instrument issued for a period of more than one year with the intent of raising capital by borrowing. The Federal

government, states, cities, corporations, and other types of institutions sell bonds. A bond is typically a promise to repay the

principal loan along with interest on a specified date of maturity.

BHuman

Resource

Management

BonusPlans that award cash or other items of value, such as stock (or stock options), based on accomplishments achieved. While

incentive plans are 'forward' looking' bonus plans are 'backward looking'.

BHuman

Resource

Management

Bonus (Pay Plans)Plans that award cash or other items of value, such as stock or stock options, based on accomplishments achieved. Incentive

plans are 'forward' looking; bonus plans are 'backward' looking.

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BHuman

Resource

Management

Bonus Eligible Refers to groups or classes of employees eligible to participate in a bonus program.

BHuman

Resource

Management

Bonus GuaranteeA payment in addition to base salary that is made regardless of performance, e.g., an incentive award that is guaranteed,

usually to a new hire or to a newly promoted person. It is usually nonrecoverable by the company.

BHuman

Resource

Management

Bonus ProgressivityAn employee rewards plan that increases the incentive as the employee performance exceeds predetermined degrees of

performance. See PROGRESSIVITY OF INCENTIVES.

BHuman

Resource

Management

Book Unit Award PlanA type of long-term incentive plan, whereby an employee is awarded stock valued at the book value per share. In this kind of

plan an increase in the book value of the stock accrues to the benefit of the employee.

BHuman

Resource

Management

Book Value (BV)Total shareholders' equity divided by the number of common shares outstanding. Book value is sometimes used in incentive

plans in privately owned companies where the fair market value of shares is not readily known.

BHuman

Resource

Management

Book Value Purchase

Plans

An incentive program in which employees purchase shares of their organization at book value. They subsequently can sell the

shares back to the organization at the then book value.

BHuman

Resource

Management

Bottom Line An individual's or company's profit after taking into consideration all expenses, income and taxes.

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BHuman

Resource

Management

brainstorming A technique for teams that is used to generate ideas on a subject. Each person on the team is asked to think creatively and

write down as many ideas as possible. After the writing session, the ideas are discussed by the team.

BHuman

Resource

Management

Branch ManagerThe individual typically in charge of a field office. For insurance companies, this individual uses the Branch Office Distribution

System. Also called a general manager.

BHuman

Resource

Management

Branch Office

Distribution System

A common system for selling individual life insurance. Under this system, the soliciting agents who work out of a branch office

are under contract to the insurance company, not to the branch manager. The agents receive commissions directly from the

insurance company. The branch office manager, supervisors, and clerical personnel in the field office are employees of the

insurance company; and these employees are subject to the same types of controls normally exercised by an employer. See

also AGENCY SYSTEM and BRANCH MANAGER.

BHuman

Resource

Management

BrandingThe process of identifying and differentiating an organization‘s products, processes or services from another organization by

giving it a name, phrase or other mark.

BHuman

Resource

Management

Breach of DutiesA breach is a violation or infraction, as of a law, a legal obligation, or a promise. When applied to an employee, it is grounds for

dismissal.

BHuman

Resource

Management

Break In Service

The length of time between the date on which an employee leaves an organization and the date on which the employee

resumes working for that firm. For pension and employee benefit plan purposes in the United States, a plan participant cannot

be deprived of benefits that accumulate before a break in service, unless the break is longer than (1) five years or (2) the

amount of time that the participant has been employed when the break commences.

BHuman

Resource

Management

Break In Service Year

(Erisa Pension-Plan

Standards)

An anniversary year during which a plan participant does not complete more than 500 hours of service and earns no pension

benefits. If a non-vested employee incurs five or more consecutive break years, that employee may lose all the time towards

vesting under the plan.

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BHuman

Resource

Management

Bridge LoanThis is a loan typically secured by your current home, which is usually listed for sale. The bridge loan is used to finance the

purchase of the second home. The homeowner usually has a year within which to sell or rent the first home and to pay off the

loan with the proceeds.

BHuman

Resource

Management

Bridging Supplement

A Canadian program that provides a supplemental pension to a pension plan participant who retires before age 65. The

bridging supplement is generally used to integrate private pension plans with public pension plans. If a pension plan participant

retires before age 65, the plan sponsor can provide a bridging supplement until the retiree turns 65 and begins to receive

payments from the public pension plans. The combined benefit payment that the participant receives remains level and is the

same as the participant would have received had he or she waited until the age of 65 before beginning to receive benefits. The

sponsor is providing an amount in addition to the basic pension payment. Known also as a Bridging Benefit.

BHuman

Resource

Management

Broadbanding A pay structure that consolidates a large number of narrower pay grades into fewer broad bands with wider salary ranges.

BHuman

Resource

Management

BrokerA person or firm who, for a fee or commission, acts as an intermediary between a buyer and seller. Usually a license is

required.

BHuman

Resource

Management

Broker DealerOther than a bank, any individual or firm that is in the business of buying and selling securities for itself and others. Called an

agent or broker when buying securities and a principal or dealer when selling them. The SEC requires that broker/dealers not

only register with the SEC but also with the states in which they conduct business.

BHuman

Resource

Management

Brokerage

Distribution System

A distribution system relying on commissioned agents, called brokers, who sell the products of more than one insurance

company.

BHuman

Resource

Management

Brokerage ManagerA salaried insurance company employee or an independent agent whose responsibility is to appoint brokers on behalf of the

company and to encourage brokers to sell the products of a particular insurance company.

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BHuman

Resource

Management

Brokerage ShopAn agency operated by an independent general agent who is under contract to a number of insurance companies. Also known

as a Brokerage General Agency.

BHuman

Resource

Management

Brother-Sister

Arrangement

When a third corporation, group, or person owns two or more corporations this arrangement is typically known as 'brother -

sister.'

BHuman

Resource

Management

Budget An itemized plan of an individual or company's income and expenses expected for a future period of time.

BHuman

Resource

Management

building An activity focused on sustaining and renewing the organization. It involves actions that indicate commitment to the

achievement of group or organizational goals: timely and effective discharge of operational and organizational duties and

obligations; working effectively with others; compliance with and active support of organizational goals, rules, and policies.

BHuman

Resource

Management

Bulletin BoardsBulletin Boards are one method of posting information that is of general interest to employees. This may include information

that employers are required to make available to employees such as equal employment policies, safety requirements, and

other government regulations.

BHuman

Resource

Management

BumpingThe practice of allowing more senior level employees whose positions have been slotted for elimination or downsizing the

option of accepting an alternative position within the organization, for which they may be qualified to perform and which is

currently occupied by another employee with less seniority.

BHuman

Resource

Management

Bundled Insurance

Product

An insurance product in which the mortality, investment, and expense factors are all used to determine premium rates. Cash

values are not separately identified in the policy. Usually whole life insurance is an example of a bundled insurance product.

See and contrast with UNBUNDLED INSURANCE PRODUCT.

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BHuman

Resource

Management

Bureau Of Labor

Statistics (BLS)

This is the United States Federal Government's major fact-finding agency in the field of labor economics and statistics. Its

responsibilities include finding data on wage, national pay, and industry surveys, such as the National Compensation Survey

(NCS) and the Occupational Employment Survey (OES).

BHuman

Resource

Management

Business

Continuation

Insurance

An insurance type for closely held businesses, it is designed to provide funds to enable the remaining partners in a business,

or the remaining stockholders in a closely-held corporation, to purchase the business interest of a deceased or disabled

partner or stockholder. Compare with PARTNERSHIP INSURANCE and STOCK REEPURCHASE INSURANCE.

BHuman

Resource

Management

Business ExpensesSeveral definitions: 1) This is the cost of operating a business. It is a deductible for federal income tax purposes. 2) Where the

employee is concerned, a business expense is that expense for which the employee is reimbursed and which is not included in

his/her pay.

BHuman

Resource

Management

Business Insurance This type of insurance is intended to serve the insurance coverage needs of a business, as opposed to that of an individual.

BHuman

Resource

Management

Business Travel

Accident Insurance

An insurance plan that covers both employees and the employer should an accident occur while the employee is traveling on

company business.

BHuman

Resource

Management

Business Travel

Accident Plan

An insurance plan that covers both employees and the employer should an accident occur while the employee is traveling on

company business.

BHuman

Resource

Management

Buyer's GuideIn the United States many states require that insurance companies make this publication available to an applicant for life

insurance. The Buyer's Guide enables the applicant to make a better-informed choice among policies.

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BHuman

Resource

Management

Buying PowerThe inverse of cost of living. COST OF LIVING is the cost of purchasing goods and services, as determined by the demand

and supply of goods, services, and property. For example, if the cost of living is 10% higher in an area, the buying power is

approximately 10% less in that area.

CHuman

Resource

Management

Cafeteria PlanAlso known as a flexible benefit plan, offers each employee several choices as to the types and or amounts of organization

benefits. An employee is given a set amount, and he or she can choose how it is spent.

CHuman

Resource

Management

Call Back PayA guarantee of pay for a minimum number of hours when employees, who are not scheduled to work and who are not on call,

are called back to their work. They receive pay for at least the minimum number of hours established, even if they do not end

up working up to those many hours.

CHuman

Resource

Management

Call In PayThis is the guaranteed pay for a set minimum amount of time for employees who show up to work at the usual time and for

whom there is no work. The employees receive pay for at least the specified minimum number of hours, even if they did not

work at all.

CHuman

Resource

Management

Call OptionA stock option contract that gives you the right to purchase a specified quantity of stock at a specified strike price by a

specified expiration date.

CHuman

Resource

Management

Canada Pension Plan

(CPP)

This plan applies to all Canadian provinces (with the exception of Quebec). This plan primarily provides for retirement and long-

term disability income benefits to residents.

CHuman

Resource

Management

Canadian Council Of

Insurance Regulators

(CCIR)

Similar to the National Association of Insurance Commissioners in the United States, this Canadian organization of provincial

insurance regulators meet regularly to discuss insurance matters. The Council also develops model insurance legislation,

which it encourages legislatures to adopt.

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CHuman

Resource

Management

Canadian Life And

Health Insurance

Association (CLHIA)

Most of the life and health insurance companies in Canada belong to this Association. Their main responsibility is to conducts

research on insurance issues and to promote the best interests of the insurance industry. The CLHIA is the main source of

information about the life and health insurance industry in Canada.

CHuman

Resource

Management

Canadian Life And

Health Insurance

Compensation

Corporation

(CompCorp)

This is a federally incorporated, nonprofit company established by the Canadian Life and Health Insurance Association

(CLHIA) in order to protect consumers against loss of benefits in the event a life or health insurance company becomes

insolvent.

CHuman

Resource

Management

Canadian Method A Canadian prescribed method for the calculation of modified net premiums and reserves.

CHuman

Resource

Management

Cancelable PolicyAn individual health insurance policy that can be terminated at any time by the insurer. See also CONDITIONALLY

RENEWABLE POLICY, GUARANTEED RENEWABLE POLICY, and OPTIONALLY RENEWABLE POLICY.

CHuman

Resource

Management

CapThe total incentive opportunity a sales representative can earn in a given period. Sometimes a cap is referred to as the

maximum, the lid, or the ceiling.

CHuman

Resource

Management

capacity The capability of a worker, system, or organization to produce output per time period. It can be classified as budgeted,

dedicated, demonstrated, productive, protective, rated, safety, or theoretical.

CHuman

Resource

Management

Capital EmployedThe value of all the assets employed in the course of business (e.g. equity and preference capital, fixed and current assets,

and gross borrowings). Sometimes used as a measure of performance for executive incentive plans. Most commonly used in

the calculation of Return on Capital Employed. See also RETURN ON CAPTIAL EMPLOYED.

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CHuman

Resource

Management

Capital Expenditures Monies spent to acquire or upgrade physical assets such as buildings and machinery.

CHuman

Resource

Management

Capital Gains

TaxationA tax levied on profits realized from the sale of a capital asset, such as stock and real estate.

CHuman

Resource

Management

Capitation Basis

A health insurance payment method whereby a fixed amount of money is paid per person to cover all services, without regard

to the number or nature of services rendered to each person within a set period of time. It is the provider who bears the

financial responsibility to coordinate patient care within the fees or capitated rate for all patients. See also FEE SCHEDULE

BASIS.

CHuman

Resource

Management

Captive AgentsAgents who work exclusively for one insurance company and who may not represent another company. See also EXCLUSIVE

AGENTS.

CHuman

Resource

Management

Captive Insurance

Company

Usually set up and owned by a parent company for the purpose of insuring the parent company's exposures to loss. This type

of insurance company provides insurance coverage at a lower cost than is available by going through the general insurance

market. A captive insurance company may be either a non-admitted, nonresident, or foreign insurer. May also provide

reinsurance to a self-insure or a domestic company.

CHuman

Resource

Management

Career AgentA full-time commissioned salesperson who works out of an insurance company's field office, holds an agent contract with that

company, and sends most or all of his or her business to that company. On occasions, a career agent may broker business

with other companies.

CHuman

Resource

Management

Career AverageA method used to calculate payout to a retiree in a defined-benefit pension plan by determining average annual salary. Years

where less than 1,000 hours were worked may not always be included in the calculation.

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CHuman

Resource

Management

Career Average

(Career Earnings)

Benefit Formula

This describes a formula by which retirement benefits are calculated, based on compensation for the entire amount of time in

the plan. See also DEFINED BENEFIT FORMULA.

CHuman

Resource

Management

Career Average

Pension

A formula which basing retirement benefits on actual credited compensation of an employee during his or her total period of

service or participation.

CHuman

Resource

Management

Career ladderA series of defined levels where the nature of work is similar and the levels represent the organization‘s typical requirements

for career growth. Parallel ladders and overlapping ladders are often created to allow transition from one field to another (e.g.,

from engineering to management). Also called career pathing.

CHuman

Resource

Management

CarpoolingCarpooling is a program whereby employees are encouraged to share rides to work so as to reduce traffic problems, preserve

the environment, and save money.

CHuman

Resource

Management

Carry Over ProvisionFound in most medical expense policies, this provision permits you to apply both eligible in-network and out-of-network

expenses incurred during the last three months of the calendar year to the next year's deductible or out-of-pocket maximum.

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Management

Case ManagementA cost-containment program designed to identify alternate, less costly methods of treatment for seriously ill patients without

sacrificing the quality of care a patient receives. Also called large claim management or medical case management. See also

CATASTROPHIC CLAIM MANAGEMENT.

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Management

Cash Balance

Pension Plan

An established benefit plan resembling a defined contribution plan. The characteristics are usually annual or monthly account

additions made at a predetermined rate (e.g., a percentage of pay). These contributions grow at a stated rate. Upon retirement

or withdrawal, the participant may receive the full account balance in one lump sum, so long as the benefits are fully vested.

The account balance may be used to purchase an annuity.

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Cash Basis

Compensation

Cash basis compensation implies two things. The first is that the person is paid cash and not in kind, such as room and board

or transportation. The second is that the company records labor expenses as they occur or are paid, and not as accrued.

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Management

Cash FlowThe amount paid out throughout the entire year, along with all the incidental changes. The timing of salary changes affects the

actual monies paid out, pay period by pay period.

CHuman

Resource

Management

Cash Flow StatementA financial statement that highlights monies actually received and paid out within a certain time frame (typically a year). It

represents the differentials in the cash and cash equivalents account for the period in question.

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Management

Cash Option Exercise The fact of paying cash for the price of an option exercise of a number of shares exercised in order to purchase the shares.

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Management

Cash Or Deferred

Arrangements

A program in which employees have the option of taking cash or placing some of their earnings into an established trust on a

pre-tax basis.

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Management

Cash Payment

OptionA life insurance policy dividend option under which benefits are paid to policy owners in cash.

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Management

Cash Premium

Accounting System

Used for industrial insurance. Under this system, the broker directs the home office of the actual amount collected per policy.

The home office then updates the policy records to mirror these collections and prepares new collection records.

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Cash Refund OptionA type of the life income option with refund, which specifies that any proceeds remaining when the beneficiary dies is to be paid

in a lump sum to the contingent payee. Compare to the installment refund option.

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Resource

Management

Cash Surrender

Value

The amount available in cash when the owner of a policy voluntarily terminates the policy before it matures or becomes

payable by death.

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Resource

Management

Cash Surrender

Value Option

In a life insurance policy, this is the amount of money, adjusted for factors like policy loans or late premiums, which would be

received by the policy owner if he/she were to cancel the coverage and surrender the policy to the insurance company. Also

known as the net cash value.

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Resource

Management

Cash Value

In a life insurance policy, this is the amount of money, before adjustments, that are made for factors such as policy loans or

late premiums, that the policy owner will receive if the policy owner allows the policy to lapse or cancels it and surrenders the

policy to the insurance company. Cash values are a feature of most types of permanent life insurance. Compare to CASH

SURRENDER VALUE. Also known as INSIDE BUILD-UP and policy owner's equity.

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Management

Cashless Option

Exercise

The exercise of an option by an individual through an outside broker or dealer. The broker, in effect, makes simultaneous

purchases and sales of the underlying option shares and delivering cash or stock to the individual for the options. The

individual does not therefore have to actually come up the purchase price.

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Resource

Management

Catastrophic Claim

Management

A cost-containment program designed to identify alternate, less costly methods of treatment for seriously ill patients without

sacrificing the quality of care a patient receives. Also known as catastrophic claim management, large claim management, or

medical case management.

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Resource

Management

Causal Relation

Requirements

Proof required by statute in Kansas, Missouri, Rhode Island, and Puerto Rico to show that the facts not accurately represented

in an insurance application were material. In other words, that the misrepresentation affected the insurers decision to insure

against that particular loss, to whatever extent.

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Ceding CompanyThe definition of reinsurance is the transfer of part or all of a risk insured against to another insurance company. The transferor

of the risk is known as the 'ceding company' while the transferee (receiver of the risk) is known as the 'assuming company' or

the REINSURER.

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Resource

Management

Central Index Key

(CIK)

A code used by the Securities and Exchange Commission's (SEC) computer systems to identify corporations and individual

people who have filed disclosure with the SEC. The CIK can be used to find a specific company or fund on EDGAR.

CHuman

Resource

Management

Central Tendency In statistics, central tendency is a measure THAT indicates the middle (mean, median or mode) of a data distribution.

CHuman

Resource

Management

Central Tendency

Error

The end result when evaluators rate individual performance of subordinates toward the center of a performance scale, implying

the assumption that everyone's performance is about average or that different performance levels are not significant.

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Resource

Management

CentralizationThe extent to which a central group controls the determination of and the practice of administration of salaries, most

commonly, across organizational units. The degree of centralization or decentralization depends on the CULTURE an

organization.

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Resource

Management

Certain Payment Payment not based on any condition. This is payment that will be made no matter.

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Resource

Management

Certificate Of

Assumption

In terms of assumption reinsurance, this is a certificate sent to each 'transferor of risk' or 'ceding company' to give the policy

owner notice that: (1) the risk had been assumed, and (2) pertinent information about the new insurer, assuming company, or

the REINSURER.

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Certificate Of

Authority

A document that grants an agent power to act for the insurance company. This document comes from the insurer and is given

to the agent as proof of his authority. The document not only grants authority but also outlines the extent of that authority. A

certificate of authority may be used in any situation where one party grants power to another to act on the first party's behalf.

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Resource

Management

Certificate Of

Indebtedness

A certificate issued by an insurer to the beneficiary of a life insurance policy. This certificate details the minimum interest rate,

which is guaranteed, and the frequency with which interest payments will be made.

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Resource

Management

Certificate Of

Insurance

A document given to the insured by the organization insurance plan. This document outlines the type and extent of coverage to

which the organization member is entitled and the beneficiary of that coverage. Very often, the certificate will also contain a

rundown of the contract terms as they affect individual organization members. See also master contract.

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Management

Cession The act of passing risk to another. The act of ceding. See Ceding Company.

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Resource

Management

Champus Health coverage provided by the United States government to members of the armed services.

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Resource

Management

Chance Of Loss In insurance terms, this is the likelihood that an event (such as death or injury) will happen.

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Resource

Management

Change In Control

Provision

A clause within a contractual document making provisions for conditions that must be satisfied in the case of a change of

control. The change of control does not necessarily have to be a complete change of ownership. It may only be a percentage

of the company that changes hands.

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Change managementThe deliberate effort of an organization to anticipate change and to manage its introduction, implementation, and

consequences.

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Management

Change Of

Occupation Provision

An individual health insurance policy clause that provides that the insurer has the right to make amendments or adjustments to

a policy's premium rate or benefits available when the insured changes work position or careers.

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Management

Changes In Methods

Of Accounting

This is a change, which includes a change in the system of accounting of gross income and or deduction, or a change in the

way a material item is treated. See also MATERIAL FACT.

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Management

character The sum total of an individual's personality traits and the link between a person's values and her behavior.

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Management

Chauffeur ServicesProviding an employee with a chauffeur in addition to a car. For tax purposes, the value of the chauffeur is determined

separately from the value of the car.

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Management

Child Support

There are two instances where an employer may become involved with an employee's Child Support: 1) Where there is a court

order requiring the employer to withhold the support payment from the wages of the employee. Under the Child Support

Enforcement Amendments of 1984 these payments take precedence over all other garnishment orders. 2) Under the Qualified

Medical Child Support Order [QMCS], the child must be covered under the employer's health care plan to the extent that the

plan covers dependents.

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Management

Church PlansChurch employees are generally exempt from the requirements of ERISA, unless they conduct business other than directly

related to the operation of church.

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Civil Rights ActA provision in Title VII of the Civil Rights Act of 1964 that seeks to prohibit discrimination in all areas of employment on the

basis of race, color, religion, national origin or sex.

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Management

ClaimThis is notification given to an insurance company asking for payment under the term of the insurance policy. May also be

referred to as insurance claim.

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Management

Claim Administration

Department

This is the department in a life and/or health insurance company responsible for processing claims. This department also has

claim examiners whose duty it is to review claims made, check into their validity and then authorize the payment of benefits to

the proper party.

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Management

Claim ExaminerAn employee who investigates insurance claims for an insurance company. This individual establishes that claims are valid

and authorizes payment for these claims, while denying those that are fraudulent or invalid.

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Resource

Management

Claim Frequency

Rate

In terms of health insurance calculations, the claim frequency rate is the anticipated percentage of insured that will make

claims against the company and the number of claims they will make during a certain period of time. The claim frequency rate

is used to calculate the estimated average cost of claims, which, in turn are used to establish premium rates.

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Management

Claim InvestigationA system of operation whereby pertinent information regarding a claim is gathered for the determination of whether or not

payment is to be made on that claim.

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Management

Claim Reserve

A claim department's estimate of the amount of money needed to pay a claim. The estimate is made with the help of

information that the claim department gathers in the course of handling the claim. This information may involve, for example,

the extent to which the claim is covered by the policy, the effect of previously paid claims on the amount of coverage available

to pay a current claim, and the effect of any applicable reinsurance coverage on the claim.

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Claimant The person(s) making a request, under the terms of an insurance contract, for payment of benefits due.

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Management

Claims Base The claim, employees as a whole, actually incurred in the previous two or three-year period under the same benefits plan.

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Management

Claims ProceduresSet procedures, meeting regulatory standards, must be in place and outlined succinctly in plan description for every employee

benefit plan. The set procedure must, in no way, discourage or make it unnecessarily difficult for individuals to apply for

benefits. The procedure must also provide participants with a policy for appeals (within a specific time frame).

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Management

Class Beneficiary

DesignationA way of classifying certain beneficiaries as one or as a group (e.g. children of the insured).

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Management

Classification Hierarchical structure of jobs arranged into classes or pay grades.

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Management

Classification Control Any procedure set up for the review and assignment of jobs to established classes / grades.

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Management

Classification method

of job evaluation

Compares jobs on a ―whole‖ job basis. Predefined class descriptions are established for each job and jobs are placed in

whichever classification best describes them.

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Clean SlateThe Criminal Records (Clean Slate) Act 2004 establishes a clean slate scheme to limit the effect of an individual's convictions

in most circumstances (subject to certain exceptions set out in Section 19) if the individual satisfies the relevant eligibility

criteria.

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Management

Clean-Up Fund This is a one-time life insurance benefit existing for the sole purpose of paying the insured's final expenses and unpaid debt.

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Management

Cliff Vesting When, after a specified number of years of service, all benefits accrued vests without any gradual vesting before the set time.

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Management

climate

The short-term phenomenon created by the current junior or senior leaders. Organizational climate is a system of the

perception of people about the organization and its leaders, directly attributed to the leadership and management style of the

leaders, based on the skills, knowledge and attitude and priorities of the leaders. The personality and behavior of the leaders

creates a climate that influences everyone in the organization.

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Resource

Management

Closed ContractAn insurance policy in which the condition of the policy and the application constitute the agreement, in its entirety, between the

policy owner and the insurer. Contrast with OPEN CONTRACT.

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Management

Closed ended

questionnaire

A structured questionnaire used for job analysis that provides the incumbent with a written set of questions regarding job

content that limits the responses to a predetermined set of answers. Questions are either behaviorally based or task based

and require validation.

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Management

ClosingThe finalization of the sale of property. Used to describe the securing of commitment from a prospective buyer by requesting

and obtaining the prospect's agreement to submit an application for the amount recommended in the sale proposal.

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ClubsEmployers may find it useful to pay for an employee's membership in clubs and professional organizations. Reasons for doing

so would include the contacts made by the employee, the knowledge gained, the community perspective, ore growth of the

employee.

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Management

CMSA Consolidated Metropolitan Statistical Area (CMSA). See METROPOLITAN STATISTICAL AREA (MSA).

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Management

CNIL

The Commission Nationale de l'Iinformatique et des Libertés or CNIL is an independent French administrative authority whose

mission is to ensure that data privacy law is applied to the collection, storage, and use of personal data. Created by law n° 78-

17 of 6 january 1978 about computers, files and liberties (data privacy). EQ. Privacy is a central element of the FTC's (Federal

Trade Commission)

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Management

CoachA qualified person who concentrates on improvement of a paddler's performance and skills rather than teaching new or basic

skills.

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Management

Coaching A one-to-one process between a manager and subordinate, whereby the former will ‗train‘ the latter. See also Mentoring.

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Resource

Management

Coefficient of

Determination

The ratio of the explained variation to the total variation is called the coefficient of determination. This is a measure of

predicitive reliability, and is defined as the correlation coefficient squared.

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Management

CoinsuranceFound in most health insurance policies, this is an express requirement that the insured pay a particular percentage in excess

of the deductible and of all eligible medical expenses.

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COLA

The term COLA can be used in two senses. 1) A Cost-of-Living Adjustment in which wage rates are periodically adjusted,

usually upward, based upon changes in the cost of living. These are often found in collective bargaining agreements. In

addition, they constitute large increases in government programs, such as social security. 2) A Cost-of-Living Allowance is a

payment to an expatriate employee for differences in living costs between the host and home country of the employee.

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Management

Collateral Assignment

This is when someone designates a policy‘s death benefit OR cash surrender value TO a creditor AS security WHEN applying

FOR a loan. IF the loan does NOT get repaid, the policy proceeds go TO the creditor up TO the outstanding loan‘s balance.

The policy‘s beneficiary receives the remainder. Life insurance IS acceptable security TO lenders because it IS freely

assignable.The lender IS guaranteed the money IF the borrower dies before repaying the loan.

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Management

Collective Bargaining The process by which [an] employer[s] will negotiate employment contracts with [a] union[s].

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Management

Collective Bargaining

Agreements

Agreements between employees and employers outlining acceptable work conditions including working hours, vacation,

holidays, and termination of service guidelines. These employees are typically part of a bargaining unit represented by a union.

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Management

Collectively

Bargained Plans

Collectively bargained plans may have many features not allowed in other forms of qualified plans. A great deal of flexibility is

written into the laws allowing unions and management to design plans that are in keeping with the circumstances of the

particular situation.

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Management

Combination ClauseIn a disability insurance policy establishing when the definition of total disability changes from the inability to perform a certain

job to the inability to perform any job.

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Management

Combination

CompanyA life insurance company that sells both industrial and ordinary insurance policies.

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Combination Dental

Plan

This kind of dental plan contains both the features of the scheduled and nonscheduled plans. Generally, the combination plans

cover preventative and diagnostic procedures on a nonscheduled basis and other services on a scheduled basis.

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Management

Combination Pay

Plan

Describes a pay plan that is in two parts. The first is a base salary and the second is one or any combination of cash incentive

elements (e.g. commission and/or bonus).

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Management

Combination PlanThis is a type of pension plan that adopts an approach whereby part of the funding (the employer's contribution) is allocated

and used to acquire life insurance policies with cash values. The other part of the funding is unallocated and is placed in a

conversion fund. Consider also ALLOCATED FUNDING and UNALLOCATED FUNDING.

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Management

CommissionCommissions may be defined as payment to employees or representatives, usually in sales, of a set percentage of the selling

price of the product.

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Resource

Management

Commissioners

MethodEstablished by the United States, this is a system used to calculate modified net premiums and reserves for life insurance.

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Management

Common Accident

Provision

Several definitions: 1) In terms of medical insurance policies, this is a common clause, which specifies that: should two or

more members of the same family be injured in the same accident, they will only be subject to one deductible. (2) In terms of

many voluntary organization accidental death and dismemberment policies, this is a clause that provides that the amount

which becomes payable by an insurance company is limited to a designated maximum for a situation where more than one

employee is killed or hurt in one accident.

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Management

Common Disaster

Clause

This is an insurance provision requiring that the beneficiary survive the insured by a particular length of time for the benefits to

pass to him/her. In a situation where the beneficiary does not survive the insured by the specified amount of time, the benefits

will be paid as if the primary beneficiary predeceased the insured.

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Common Law

Employees

A common law employment relationship is deemed to exist in a situation where the person/company for whom services are

being rendered the right to direct/control the person rendering that service. The said control must go beyond the employer

having the right to control what the employee does. It must include the right to instruct the employee how to do it.

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Management

Common Review

Date

Also known as focal point, this is the date on which an entire organization will receive increases in pay. A company may,

therefore, affect increases for all employees on June 1s. (Those employees who were hired half way through a cycle will

normally have their increases prorated.)

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Management

Common SharesUsed to describe the units of equity ownership in a corporation or units of ownership in a mutual fund. Usually, these will have

voting rights and sometimes dividends attached to them. The appreciation and the dividends are neither fixed nor guaranteed.

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Resource

Management

Common StockMay be a share in a publicly traded or a privately held company. Holders of common shares have voting and dividend rights.

See also COMMON SHARES.

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Management

communicating Comprises the ability to express oneself effectively in individual and group situations, either orally or in writing. It involves a

sender transmitting an idea to a receiver.

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Resource

Management

Community RatedUsed to describe an insurance plan in which the risk is shared equally between the members. Also the premium rebate is

based on the overall community's health and that of the individual members. Also allows for an increase in the insured benefits.

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Management

Community RatingTerm used to describe the application of the same premium rates for a particular group without the consideration of past loss

experience or their potential for loss.

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Commuted ValueIn Canada, this is based on a variety of factors (interest rates, assumptions of mortality, pension entitlements and so on). This

is a term used to refer to the current value of all future income payments from a pension plan. This is typically calculated and

provided by the pension administrator upon request.

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Management

CommutingCommuting is travel between the employee's residence and regular place of business and is considered a non-deductible

personal expense. However, transportation expenses between two specific business locations during the workday are

considered a deductible expense.

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Management

Company CarsExcluded from Income. In general, when an employer provides a vehicle to an employee for business purposes, the value of

the vehicle may be excluded from the employee's income. However, if the employee uses the vehicle for personal as well as

business reasons, only the portion of the car's value that can be attributed to business use may be excluded.

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Resource

Management

Company Retention

Method

A means by which the costs of various life insurance policies are compared. The cash values, dividends and yearly premiums

are weighted by the chances they will be paid. Consider also comparison methods.

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Management

Comparable Worth

This is a doctrine that states that jobs have an inherent value. As such, men and women who perform jobs of the same

inherent value should be similarly compensated. Before disparate treatment of protected classes became an issue, this term

was used for both external competitive comparisons and for internal equity decisions. Today comparable worth focuses

special attention on pay practices that may match the market or perpetuate past internal practices, but still create or perpetuate

discrimination in the treatment of those holding female-dominated jobs whose content is similar but not equal to that of male-

dominated jobs. Comparable worth means that women should be paid the same as men, excepting allowable differences (i.e.

seniority plans, merit plans, production-based pay plans, or different establishments or locations).

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Management

Compa-RatioThe ratio of an employee's actual salary (the numerator) to the midpoint of the applicable (the denominator) salary range. To

calculate an individual's compa-ratio, divide the actual salary by the midpoint of the assigned salary range.

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Compensable Factor

Degree

In quantitative job evaluation plans, this is a term used to describe yardsticks used to measure and identify particular levels of

compensable factor. Typically, there are about seven degrees for each factor.

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Management

Compensable Factor

WeightIn a job evaluation plan, this is the percentage, weight or influence, each compensable factor in a job is assigned.

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Management

Compensable factors

Elements of a job for which the organization is willing to pay. These are used to provide a basis for judging job value to create

a job worth hierarchy (job evaluation). Factors are usually measured in degrees and are weighted, based on their pre-

determined value to the organization. Typical factors include skills, effort, responsibility, scope of authority, and working

conditions.

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Management

CompensationA methodical approach to assigning a monetary value to employees in return for work performed. Compensation may include

any or all of the following: base pay, overtime pay, commissions, stock option plans, merit pay, profit sharing, bonuses, housing

allowance, vacations and all benefits. This is referred to as remuneration in some foreign countries.

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Management

Compensation

Committee

A high level committee (board of directors level) that approves pay and incentive award programs where senior management

of the company are concerned.

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Resource

Management

Compensation

Committee Report

A requirement of the Securities and Exchange Commission (SEC), this is an annual report to made by the Compensation and

Benefits Committee. The Compensation and Benefits Committee has the responsibility for establishing compensation for a

company's executives as well as for other compensation programs. Members may not be employees of the company, nor may

they be involved with the executive compensation programs. The Committee takes into account information provided by

independent compensation consultants.

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Management

Compensation CostsThis describes the overall cost to a company, including unforeseen and unrealized cost effects of current compensation

decisions concerning the total compensation program (base pay, incentive programs and benefit plans).

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Compensation Limits

For Officers Of

Corporations

Executive pay in corporations is limited in small measure. The amount of compensation paid to executives that is deductible or

reimbursable to the company is no more than $1 million in compensation paid to an individual chief executive officer or the four

other highest compensated officers of a corporation.

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Management

Compensation

Reimbursement

Agreement

This agreement requires employees who receive compensation that‘s disallowed as a deduction to the corporation to return

the funds to the corporation.

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Resource

Management

Compensation

Strategy / Philosophy

/ Policy

This describes the intrinsic guiding factor for the application and administration of a compensation program. Such a policy

would, of course ensure that a compensation program (which would include benefits and pay) would align with the company

philosophy.

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Management

Compensatory And

Punitive Damages

The intent of an award of compensatory damages is to compensate the plaintiff for loss suffered. To re-instate the plaintiff to

the position in which they were before they suffered the loss. The intent of an award of punitive damages is to both punish the

defendant and to act as a deterrent to others from similar behavior. Employees wrongfully dismissed may seek compensatory

and punitive damages.

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Resource

Management

Competencies ‗an underlying characteristic of a person‘ ‗motive, trait, skill, aspect of one‘s self-image or social role, or a body of knowledge‘.

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Resource

Management

Competency-based

pay

Competency based pay is a compensation system that recognizes employees for the depth, breadth, and types of skills they

obtain and apply in their work. Also known as skill based and knowledge based pay.

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Management

Competitive

advantage

‗People are the source of competitive advantage‘. Other systems in an organization can be copied but not the people in the

organization.

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Competitive Compa-

Ratio

The term compa-ratio indicates how employees of a company are paid in comparison with the value of their jobs in the market.

In other words, how the market pay ratio compares to the company's midpoint range in salaries of the same category.

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Resource

Management

Competitive Pay DataInformation from salary surveys of competing organizations' pay practices. This data allows compensation managers to set pay

that is at, above, or below market level, depending on their organizations' pay strategies.

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Resource

Management

Competitive Pay

Policy

Usually, this is a game plan that a company has, whereby they use the results of labor market surveys as means of evaluating

and determining how to set pay levels.

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Resource

Management

Completion BonusUsually only applicable to an employee with an expatriate status, this is a bonus / lump sum given after the successful

completion of an assignment. The objective is to provide incentive for the expatriate to continue with the assignment until its

completion.

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Resource

Management

Compound InterestAlso known as the value of money over time, this is interest that is earned not only on the initial capital, but also on interest that

has accrued over time.

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Resource

Management

Compound Salary

Growth Rate (CSGR)This term is employed to describe the growth rate, expressed as a percentage of a salary over a period of time.

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Management

Comprehensive

Health Plan

This is a term used to describe a medical insurance program providing coverage of most medical expenses within the one

policy. There is usually an annual deductible, which must be met before benefits become payable.

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Comprehensive

Major Medical

Insurance

Health insurance coverage with a combination of both a major medical policy and a hospital expense policy.

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Management

Compressed Work-

Weeks

A term used to describe any alternative workweek schedules (10 hour days or more complex rotation resulting in extended

weekends).

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Management

CompressionPay differentials too small to be considered equitable. The term may apply to differences between (1) the pay of supervisors

and subordinates, (2) the pay of experienced and newly hired incumbents of the same job, and (3) pay-range midpoints in

successive job grades.

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Resource

Management

Compulsory

Retirement Age /

Date

This describes the age and or date at which employees must retire. Since the amendment to the Age Discrimination in

Employment Act of 1967 (ADEA), mandatory retirement, which is based only on age, has mostly been prohibited.

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Resource

Management

Computer-Aided Job

EvaluationIn job evaluation, a computer may be used to manipulate statistical data in order to rank jobs.

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Resource

Management

Computers Employer

Provided

When it is to their benefit, employers provide computers for employees to use when working at home. Depending on the

amount of personal use by the employee and the family, the benefit may not be considered taxable compensation to the

employee.

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Resource

Management

Conditionally

Renewable Policy

This is a health insurance policy that gives the insurer the right to refuse to renew the policy for reasons outlined in the policy at

the end of a premium payment period. Compare with CANDELABLE POLICY, GUARANTEED RENEWABLE POLICY, and

OPTIONALLY RENEWABLE POLICY.

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Confidence IntervalThis is a range that‘s computed for the observed value that should include the ―real‖ value 90% or 95% of the time. To

determine this range or confidence interval, you must first compute the standard error of the value.

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Management

Confidentiality

agreementAn agreement restricting an employee from disclosing confidential or proprietary information.

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Resource

Management

Confirmation

Certificate

Issued to a beneficiary of a life insurance policy, this certificate outlines the amount of life insurance proceeds in a retained

asset account and other pertinent information.

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Resource

Management

conflict of interest Any business activity, personal or company related, that interferes with the company's goals or that entails unethical or illegal

actions.

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Conservation An attempt by insurer's or their agent to prevent a policy from lapsing.

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Consolidated

Omnibus Budget

Reconciliation Act Of

1985 (COBRA)

In the United States, this is a statute that mandates that employers sponsoring organization health plans continue to offer

coverage under the organization plan to employees, their spouses, and dependent children who lost coverage due to the

occurrence of a qualifying event (e.g. reduction in work hours, many types of termination of employment, death, and divorce).

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Consolidated

Subsidiary

Accounting

An accounting method used for subsidiaries where the ownership is more than 50%. See COST METHOD.

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Constant Population

With Constant

Midpoints Model

The first approach used in determining salary increase budgets. In this approach, there is no information on any planned

promotions, new hires, terminations, reclassifications, etc. It is assumed, that the status quo is maintained.

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constraint Any element or factor that prevents a person from reaching a higher lever of performance with respect to her goal.

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Management

constraint

management The practice of managing resources and organizations in accordance with the Theory Of Constraints (TOC) principles.

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Management

Construct ValidityThe extent to which a measurement reflects the specific underlying construct it purports to assess. Construct validity requires

gradual accumulation of evidence from a variety of sources.

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Management

ConstructiveA tax principle for the determination of timing of tax liability, where there is a deferred payment. The law states that tax is to be

imposed at the time when an individual reaches out to take the benefit.

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Management

Constructive DeliveryLegally equivalent to physical delivery of a policy. Constructive delivery occurs: (a) when an insurer parts with control of the

policy with the intention that the insurer will be unconditionally bound by the policy as a completed instrument, or (b) when the

policy is physically delivered to an agent of the applicant.

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Constructive

dismissalCoercion by threats to act or promises to refrain and includes a resignation given as an alternative to be dismissed.

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Constructive

Distributions

If a corporation pays a shareholder-employee a salary that‘s unreasonably high considering the services actually performed,

the IRS may treat the excessive part of the salary as a constructive distribution of earnings to the employee-shareholder. The

employee-stockholder‘s wages are reduced, and the difference is treated as a dividend. This creates increased corporate

taxable income and tax liability for the corporation since the reduced wages increase the corporation‘s earnings but the cash to

pay the additional tax is gone. There are also penalties and interest to be paid on the underpayment. To avoid this compound

effect, the corporation and shareholder-employee can enter into a Compensation Reimbursement Agreement.

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ConsultantsThe use of non-employee professionals by companies provides flexibility in the workforce. Consultants can undertake and

complete projects without increasing the workforce of the organization.

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Management

Consumer Price

Index (CPI)

CPI measures the change in consumer prices, as determined by the Bureau of Labor Statistics' monthly survey. Many pension

and employment contract changes are tied to changes in consumer prices. This protects employees against inflation and

reduced purchasing power.

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Management

Consumer ReportThe communication of any information relating to a person's credit-worthiness, capacity and or general reputation by a

consumer reporting agency.

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Management

Consumer Reporting

Agency

Any person or body that provides consumer reports on a regular basis and makes them available for profit or non-profit basis,

to another. Known also as credit reporting agency. See also FAIR CREDIT REPORTING ACT (FCRA).

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Content ValidityThe extent to which a measurement reflects the specific intended domain of content. Stated as a question: Do the ...

thoroughly cover all relevant aspects of the conceptual domain they are intended to measure?

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Contestable PeriodA pre-established period (usual two years) within which the insurer may contest the validity of a life insurance policy. Contrast

with incontestable clause.

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Management

ContingenciesEvents that are likely but not certain to happen. Insurance premium rates and insurance companies' willingness to accept risks

are based partly on the degree of likelihood or the probability that certain contingencies will or will not happen.

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Management

Contingency ReserveA fund or reserve set up by an insurance company of its own volition to cover or help to cover any unusual or unexpectedly

large claim amounts.

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Management

Contingent Annuity

Option

An option under which an employee may elect to receive, under certain conditions, a reduced amount of annuity with the same

income, or a specified fraction, to be paid after his death to another person designated as his contingent annuitant, for that

person's lifetime. The contingent annuitant is usually the husband or the wife. (See JOINT AND SURVIVOR ANNUITIES.)

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Management

Contingent

Beneficiary

Should the person designated to receive the proceeds of life insurance policy, predecease the person whose life is insured,

then the contingent beneficiary becomes the beneficiary. May also be known as the secondary beneficiary.

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Management

Contingent

CompensationSimilar to a BONUS, this is a payment or benefit that depends on the behavior and or performance of an employee.

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Contingent PayeeThis is the person or party who will receive the proceeds of a life insurance policy remaining to be paid under an option of

settlement at the time of the original payee's death. May be contrasted with the CONTINGENT BENEFICIARY, whose rights

end when the insured dies. Also known as the successor payee.

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Contingent PaymentA payment that will be made upon the occurrence of a predetermined event. For instance, this is a payment that will only be

made at a certain date, if and only if, the recipient is alive.

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Management

Contingent workers Employees who may be: casual labor, part-timers, freelancers, subcontractors, independent professionals and consultants.

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Management

Continuance TablesTables containing morbidity statistics that indicate the distribution of claims according to the duration of the illness or amount of

expense involved in the claims.

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Management

Continuation

Coverage

COBRA and other regulations provide for health care continuation of coverage for employees who have terminated or been

terminated from their employer.

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Management

Continuing Education

(CE)

An annual education requirement for many professionals to continue to receive certification in their respective field of work. CE

credits are usually governed by various State Boards.

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Management

Continuing Legal

Education (CLE)

Continuing education credit that attorneys are required to earn each year. CLE accreditation is governed by state boards. The

ERI Distance Learning Center provides CLE credit for selected courses. See our Course Credit Map for more information.

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Continuing

Professional

Development (CPD)

In the United Kingdom, this is activity beyond initial training, aimed at improving skills, knowledge and understanding, whether

by online courses, day seminars, spare-time study, etc. ERI provides CPD credit for UK counselors (attorneys). See our

Course Credit Map.

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Continuing

Professional

Education (CPE)

This term is used generally for CPAs. CPE credits are governed by the National Accounting Standards Board (NASBA) located

in Nashville, except for Illinois and Nebraska, which are governed by their respective State Board.

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Continuous-Premium

Whole Life Insurance

Also known as straight life insurance, this is a species of whole life insurance in which premiums are payable right up until the

death of the insured / throughout the whole life of the policy.

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Contract for services An agreement with an independent contractor.

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Contract Of

Indemnity

Under this kind of contract, the amount of benefit to be paid is strictly based upon the amount of loss suffered financially

(determined at the time of loss). Insurance contracts are typically contracts of indemnity. Their object is to reinstate the

beneficiary to their position before their loss. See VALUED CONTRACT.

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Contract of service An employment agreement.

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ContractsIn common law, employment is viewed and treated as a contract, and as such is subject to all the usual laws of contracts.

Consideration must, therefore pass from one party to another for a contract to be considered to be binding and for the statute

of frauds to apply.

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Contributed SurplusPeculiar to Canada, this is the amount in excess of the par value paid by the owners of the stock, minus the number of

dividends paid to the owners of the stock.

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Contribution LimitIn a defined contribution pension plan, this is the maximum allowed by law to be added to the participant's account. The annual

contribution is inclusive of employer's contributions.

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Contribution To

Surplus

In mutual insurance companies, this is the income that results when an insurance company makes more money than is

required to pay for the cost of actually providing insurance.

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Contributory Benefit

PlanA benefits program requiring that employees contribute part (or all) of the cost, and the employer covers any remainder.

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Management

Contributory

Organization

Insurance

Any organization insurance plan that calls for the insured to contribute a portion of the cost of the organization insurance

coverage. To be contrasted with NONCONTRIBUTORY ORGANIZATION INSURANCE.

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Contributory PlanAny pension or employee benefit plan in which plan participants can or must make contributions to the plan out of their own

pockets.

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Control pointThe point within a salary range representing the desired pay for a fully qualified, satisfactory (average) performer in a job or

group of jobs at a given time (usually the midpoint of a salary range).

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Management

Controlled Foreign

Corporation

Treated by the IRS as a U.S. tax reporting entity because of voting control or ownership of U.S. citizens, this is really an

offshore company. Technically it is defined as a foreign corporation in which U.S. person(s) has 10% or more ownership or

voting control.

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Controlled Groups

Usually refers to a group of corporations. One is known as the 'parent' company and owns a stock interest in at least one (if not

more) other corporations, known as 'subsidiaries'. May also be a 'brother- sister' type association, whereby two or more

corporations are owned by the same person or groups of persons. A controlled group may also consist of a combination of the

two types of groups (in which case it is known as a 'combined controlled group').

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Convention Blank Filed annually to their respective state insurance regulators, this is a financial statement required of all United States insurers.

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Conversion Fund A fund where all the employer's unallocated contributions to a combination plan accrue.

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Conversion Privilege

May be defined in two ways: (1) The right, which an individual has, under certain circumstances to change coverage (e.g.

change from an individual term policy to an individual whole life policy). (2) The right of an individual covered by an organization

policy to change his or her coverage under an individual insurance policy. Typically, this kind of conversion may be made when

a person leaves the group or the benefits are downgraded or ended for a certain group of people.

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Management

Convertible

Debenture

A bond that may be converted, at the option of the owner, into common shares of the issuing company at certain times and at

specific prices.

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Management

Convertible Preferred

StockMay, at the owner's option, be converted at specific times into a certain amount of common stock of the issuing company.

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Management

Convertible Securities

(Such As Debentures

Or Preferred Stock)

Convertible securities combine aspects of both stocks and bonds, thus creating a truly 'best of both worlds' investment.

Convertible securities are a bonds, debenture or preferred stock exchangeable which, at the holder's option, may be

exchanged for the common stock of the issuing company.

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Convertible Term

Insurance

Term life insurance which may: 1) be converted into cash value insurance (USA) or may be the conversion of term assurance

into an endowment assurance (UK); 2) converted into a permanent insurance policy at the option of the owner without further

evidence of insurability.

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Coordination Of

Benefits (COB)

Clause

This is a clause included in health insurance policies that states that benefits will not be paid for amounts that are already

covered by other organizational health insurers. The object of a coordination of benefits clause is to ensure that benefits from

all eligible sources do not exceed 100% of permissible medical expenses. This also prevents an individual from profiting from

duplicative organization health care coverage. Consider also OVER INSURANCE PROVISION.

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Core Benefits These are the basic standard benefits that are offered to every employee (e.g. life insurance and health care).

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Core competenciesThe skills, knowledge and abilities which employees must possess in order to successfully perform job functions which are

essential to business operations.

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Core Labor Force A small group of permanent workers, for example, strategists, planners.

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Corporate CultureThe shared beliefs, norms and assumptions of an organization, which enable it to adapt to its external environment and to

integrate its employees and units internally.

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Corporate mission The aims and objectives of an organization.

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Corporate-Owned

Life Insurance (COLI)

The purpose of COLI is to enable a corporation to insure the lives of their highly compensated / executive level employees

(beyond what may be available through qualified plans). The company and the executive typically share ownership and the

beneficiary interests.

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corrective action The implementation of solutions resulting in the reduction or elimination of an identified problem.

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Management

CorrelationSeveral definitions: 1) In statistical terms, this is the simultaneous increase or decrease of two numerically valued random

variables. 2) In lay man terms, this is a word used to describe some kind of association.

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CorridorIn order to qualify as life insurance for income tax purposes, a specific level of pure insurance protection, which is in excess of

the accumulated value, must be maintained. It is this pure insurance coverage that is known as corridor.

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Corridor DeductiblePeculiar to the health insurance industry, this is when a major policy has paid up to the entire amount of the benefits to the

insured party and there still exists some remaining expenses. This additional expense must be shouldered by the insured party

before any further coverage becomes available.

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Cost Comparison

Methods

A means by which cost of various life insurance policies are compared by calculating the cash values, dividends and premiums

yearly and weighting them by the chances that it will be paid.

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Management

Cost ContainmentA plan whereby a company / organization attempts to minimize rising costs of health and welfare benefits by putting into effect

programs that focus on cost effectiveness.

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Cost leadership A strategy of becoming the lowest-cost producer in its industry.

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Cost MethodAn accounting method used by affiliated companies, where the percentage of ownership is not more than 20%. Compare with

EQUITY METHOD.

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Cost Of Capital

An economic concept that may be defined in various ways. 1) A discounted rate equating the market value of securities with

the current value of cash flows to the security owners. 2) A discount rate equating market value of securities to the current

value of the net operating income of a company, after tax. 3) May also refer to minimum rate of return, which must be assumed

of a possible investment for the market value of the company not to be affected.

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Cost Of Goods Sold Determined by subtracting ending inventory from goods remaining and available for sale (purchases vs. beginning inventory).

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Cost Of Increase In

Current YearThe eligible payroll multiplied by the average increase, adjusted to reflect the percent of the year the increase is in effect.

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Management

Cost Of Increase In

Future YearEligible payroll multiplied by the average increase.

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Management

Cost Of LaborThe process of establishing external pay practices, where information on labor market costs (total compensation amounts) are

obtained from labor market competitors and relied upon when determining target total compensation opportunity.

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Cost Of LivingThe cost of purchasing goods and services, as determined by the demand and supply of goods, services, and property.

Typically, these costs are determined by a standard packages of goods.

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Cost Of SalesIn terms of sales compensation, the cost of sales is a subjective measure of internal costs. It reflects an 'ability to pay' line of

thinking for setting target pay levels.

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Management

Cost ShiftingA strategy whereby an organization minimizes the cost of making health coverage available, by transferring a portion of the

costs or cost increases to someone other than the organization itself (usually to the employee).

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Cost-of-living

adjustment (COLA)

An across-the-board wage and salary increase or supplemental payment designed to bring pay in line with increases in the

cost of living to maintain real purchasing power.

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Management

Cost-Of-Living IndexCPI measures the change in consumer prices, as determined by the Bureau of Labor Statistics' monthly survey. Many pension

and employment contract changes are tied to changes in consumer prices to protect against inflation and reduced purchasing

power.

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Cost-of-Living LevelsThe cost of purchasing goods and services, as determined by the demand for and supply of goods, services, and property.

Typically, these costs are determined by a standard packages of goods, such as is used by the Consumer Price Index (CPI).

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CounselingCounseling (work coaching) is providing day-to-day feedback to employees about areas in which their performance at work

can improve.

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Coupon

AdvertisementIn Canada, the Superintendent's Guidelines defined in a retirement or welfare plan.

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courage The virtue that enables us to conquer fear, danger, or adversity, no matter what the context happens to be (physical or moral).

Courage includes the notion of taking responsibility for decisions and actions. Additionally, the idea involves the ability to

perform critical self-assessment, to confront new ideas, and to change.

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Coverage Rules

Coverage rules govern the admission of employees to participation in a retirement or welfare plan. The term "coverage" also

refers to the IRS and rules that are designed to insure that qualified retirement plans benefit a broad cross-section of the

employer's lower compensated employees. The rules for determining whether coverage is adequate in this latter sense are: 1.

The Average Benefit Percentage Test: A plan will pass this test if: (a) it benefits employees under a classification that the does

not discriminate in favor of highly compensated employees (the classification test); and (b) the "average benefit percentage" for

lower compensated employees (their plan benefits expressed as a percentage of their compensation) is at least 70 percent of

the average benefits percentage for highly compensated employees. 2. Minimum Participation Rule: A requirement for

qualified retirement plans that a plan benefit at least the lesser of: (a) 50 employees; or (b) 40 percent or more of all employees

of the employer. 3. Ratio Test: This test requires that the plan benefit a classification of employees that does not allow more

than a specified difference between the percentage of an employer's highly compensated employees who are covered and a

similarly computed percentage for lower compensated employees. For this purpose, the maximum allowable difference is a 70

percent ratio. 4. 70 Percent Test: This test requires a plan to benefit 70 percent or more of all of the employer's lower

compensated employees. For this purpose, all eligible employees are considered to benefit under a plan. In a Section 401(k)

plan, or a plan to which employees may voluntarily contribute or may receive employer matching contributions, all employees

eligible to contribute will be considered to benefit in that portion of the plan.

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Covered

Compensation

The foundation for integrating pension plan with Social Security benefits. The IRS defines it in its regulation as, the average of

the 35 years of Social Security wage bases up to and including the year an employee reaches the age of eligibility (retirement).

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Covered WagesIn benefits plans, this represents the amount of employee wages or salaries used to calculate corresponding benefit amounts.

For instance, pension calculations are typically based on salary and generally do not include other kinds of variable

compensation (e.g., bonuses).

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Credibility

Percentage

This is the amount of credit or weight given to a group's actual claims experience, when calculating a projection of future

claims or a dividend. May also be referred to as the credibility factor. Consider also EXPERIENCE RATING and EXPERIENCE

REFUND.

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Credit Life InsuranceA term insurance that decreases by nature. The purpose is to pay the balance due on a loan in a situation where the borrower

dies before the loan is repaid.

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Management

Credit Unions A credit union is a non-profit cooperative owned and operated by the members to provide financial services to its members.

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Management

Credited Service

(ERISA Standard)

This is the amount of service hours recognized in a benefit formula for the purpose of determining a pension. Typically, plans

will credit one year of service for every year during which a beneficiary works a minimum of 1,000 hours.

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Credits

Several definitions: 1) A term used in accounting to describe a payment made towards an amount owed. 2) May also be a

transaction between two parties whereby one (creditor/lender) provides money, goods or securities in return for a promised

future payment by the other party (debtor/borrower). Transactions such as this normally include the payment of interest to the

lender. Contrast with DEBIT.

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Credits And The

Numerical Rating

System

The process of underwriting, that have a positive effect on an individual's mortality rating. Credits are assigned negative values.

Contrast with DEBIT and NUMERICAL RATING SYSTEM.

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Management

Critical IncidentA method of performance documentation in which the rater keeps a written record of on-the-job incidents and or behaviors,

which may be examples of effective or ineffective behavior. The record is subsequently used as a source document to rate the

employee. The purpose being to avoid subjective judgments, which feature in most ranking and rating methods.

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Cross-SellingSeveral definitions: 1) The process of using an existing customer base for one product as prospective buyers for other

products.

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CultureThe shared beliefs, norms, and assumptions of an organization that enable it to adapt to its external environment and to

integrate its employees and units internally.

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Management

CumulativeSeveral definitions: 1) An arrangement whereby payment not made when it is due is carried over to the next period. 2) May

also refer to a type of cycle of performance where the performance of the employee currently holding a certain position is

accumulated and expressed over next performance periods.

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Management

Cumulative

Withholding

Cumulative withholding refers to a method of determining income taxes to be withheld. Wages are added for a particular

payroll period to total wages already paid during the year. The aggregate is then divided by the number of payroll periods, and

any excess tax is deducted from current payment of wages.

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Management

Currency Exchange

Rates

The rate at which a certain country's currency exchanges with another. Distinctive changes in currency rates, relative to the

base country currency, cause the fluctuation of relative payroll costs of expatriates.

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Management

Current AssetsAn item on a company's balance sheet that represents the sum of cash (including cash equivalents, accounts receivable,

inventory, prepaid expenses and other assets), which could potentially be converted to cash within a year. Contrast with NON-

CURRENT ASSET. Compare with CURRENT LIABILITIES and CURRENT RATIO.

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Management

Current Assumption


A type of whole life insurance where the cash values are based on the insurer's current mortality, investment, and expense

experience. An amassment account is credited with a current interest rate, which changes over time. May also be known as

interest-sensitive whole life insurance.

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Current LiabilitiesA balance sheet item that represents the sum of all monies owed by a company and due within a year. Also known as payables

or current debt.

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Management

Current RatioCurrent assets divided by current liabilities. This is an indication of a company's ability to meet short-term debt obligations. The

higher the ratio, the more liquid the company is. See also RATION and QUICK RATIO.

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Management

Current ReviewA part of a utilization re-assessment program that monitors an insured's care while the insured is hospitalized and encourages

the discharge of an insured from the hospital as soon as their medical condition no longer warrants continued in-patient care.

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Management

Current Settlement

Option RatesSettlement option rates mirroring the interest rates presently earned by the insurer.

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Management

Curriculum vitæ

(Résumé)

A curriculum vitae is a written description of your work experience, educational background, and skills. Also called a CV, or

simply a vitae, it is more detailed than a resume and is commonly used by those looking for work outside the U.S. and

Australia. A curriculum vitae is also used by someone looking for an academic job, i.e. in a college or university.

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Management

CurtailmentAn amendment to a pension plan significantly reducing plan benefits or employer contributions. Types of curtailments include a

reduction of the expected years of service of present employees, and the elimination or reduction of the accrual of certain

benefits for some or all of the future services of a significant count of employees.

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Management

Custodial CareSpecialized care that is provided for those who cannot care for themselves. Custodial care is usually for the old, the seriously

ill, or severely injured.

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Customarily and

Regularly

Under FLSA, this means greater than occasional but less than constant. It includes work normally done every workweek, but

does not include isolated or one-time tasks. (Section 541.701)

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Management

Customer Service

Department

The department in a life and health insurance company tasked with the provision of assistance to the company's policy owners,

agents, and beneficiaries. Customer service specialists are tasked with answering policy owners' questions, assisting them

with the interpretation of policy, and responding to questions on the policy coverage itself. They are also tasked with making

changes requested by the policy owners, such as change of address, beneficiary designation, and mode of premium payment.

The customer service department may also be the department that sends premium notices to customers; collects premium

payments; and calculates and processes policy loans, dividends, nonforfeiture options and surrenders. Also known as the

client service department, the policy administration department, the policy owner service department or the service and claim

department.

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Management

Cyclical

unemployment

A form of unemployment – rises in times of economic recession and falls in times of prosperity. Now shows signs of being able

to withstand increased prosperity.

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Management

Danger Pay

Usually paid in addition to a hardship premium, danger pay is often given to expatriates who are required to live and work in a

foreign country where a civil war, revolution, or some kind of terrorism could threaten the physical well-being of the expatriate.

The State Department sets the rate and establishes where and when it is needed. The rate never surpasses 25% of the base

salary. However, companies are free to exceed this rate if they so wish.

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Management

Daubert HearingA pretrial hearing where a judge determines whether or not ―scientific evidence‖ to be presented by an expert witness will be

allowed at trial. Under this test, judges evaluate whether the evidence is both ―relevant‖ and ―reliable‖ in determining if it will be

admissible at trial.

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Management

Day Care CentersChild care facilities that take care of children for multiple hours of a day while their parents are at work. One way to assist

working parents is for employers to provide onsite day care for employees' children.

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Death Benefit

Payments

"This is the money to be paid when the person insured under a life insurance policy dies. (It does not include adjustments for

monies owed.) The first $5,000 of this amount is not taxed. This money may also represent the amount payable to the

beneficiary of a retirement plan upon the death of the insured employee.

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Management

Death Claim A request for payment due to death under the terms of a life insurance policy or annuity contract.

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Management

DebitSeveral definitions: 1) An accounting entry resulting either in an increased amount of assets or a decreased number of

liabilities. (2) In terms of insurance and underwriting, debits represent factors that have a negative effect on an individual's

mortality rating.

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Management

Debits Use Of Funds On a Cash Flow Statement, a debits use of funds is a cash expenditure of receipts.

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Management

Debt Amounts OwedAlso known as liabilities, these are often divided into current liabilities (which are due within a year of the date entered on the

balance sheet) and non-current liabilities (which are due more than a year after the date on the balance sheet).

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Management

Debtor-Creditor

Groups

A group composed of lending institutions--banks, credit unions, savings and loan associations, finance companies, retail

merchants, and credit card companies--and their debtors.

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Management

Debts Paid By

Employer

Amounts for payment against a debt due from the employee. An employer who pays an employee's debt must include the

amount as income to the employee for tax purposes.

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DecilesIn statistics this represents any of nine points that divide a distribution of ranked scores into equal intervals where each interval

contains one-tenth of the scores.

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Management

decision making The process of reaching logical conclusions, solving problems, analyzing factual information, and taking appropriate actions

based on the conclusions.

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Management

decision matrix

A matrix used by teams to evaluate possible solutions to problems. Each solution is listed. Criteria are selected and listed on

the top row to rate the possible solutions. Each possible solution is rated on a scale from 1 to 5 for each criterion and the rating

recorded in the corresponding grid. The ratings of all the criteria for each possible solution are added to determine each

solution's score. The scores are then used to help decide which solution deserves the most attention.

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Management

Decision Tree Model One of the Contingency theories of leadership – developed by Vroom and Yettor (1973).

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Management

Decreasing Term

InsuranceThis is a type of life insurance where the amount of coverage decreases over the duration of the coverage.

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Management

DecrementThe process of gradually becoming less. In insurance terms, this is the reduction in the number of participants in an employee

benefits plan (usually caused by such factors as retirement, disability, death or termination).

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Deductible

A deductible is the amount of expenses that the insured party must pay before receiving any benefits from the insurance

company. It can also refer to an item or expense that is taken away from an individual's gross income in order to reduce the

amount of taxable income (e.g. mortgage interest, state taxes, charitable contributions, and business expenses that are not

reimbursed). See also Corridor Deductible, Integrated Deductible, and Per Cause Deductible.

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Deductible LimitUsually, the maximum amount of money the insured must pay before the insurance company starts to pay. Insurance

companies usually have a family deductible limit, which may be equal to two times the individual deductible.

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Deferral DateA date occurring a period of time (typically a year) after the first anniversary of a group insurance policy. Deferring payment to

this date helps insurance companies in better calculating the new premium based on the first full year‘s experience.

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Deferral OptionsOptions where an employee may defer an amount of compensation and thereby delay owing taxes on the deferred amount

until the option is exercised.

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Management

Deferred AnnuityAn annuity (an investment through an insurance company) that delays income payments until the holder chooses to receive

them.

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Management

Deferred BenefitsNon-monetary future compensation that an employee may be entitled to, providing that he/she has accumulated enough

credited years of service (for vesting purposes). These usually include pension plans, 401(k) plans and stock option plans.

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Deferred

Compensation Plan

An arrangement where a portion of an employee‘s income is paid out at a later date than when the income was actually

earned. Examples include stock options, retirement plans, and pensions. For most deferred compensation, the primary benefit

is the deferral of tax.

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Deferred IncentivesTypically a part of an executive compensation package where the reward for consistent performance is a financial incentive

payable in the future.

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Deferred Life AnnuityA life annuity (providing the purchaser with regular periodic payments, usually for the rest of their life) where payments are

started no earlier than one year after its purchase.

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Deferred Premium

Arrangement

Also called a premium-delay arrangement, an agreement between an insurer and a group policy holder that lengthens the

grace period of premiums on a permanent basis, usually by 30, 60, or 90 days. This agreement is usually only granted to

companies with excellent credit ratings.

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Deferred Profit

Sharing Plan (DPSP)

An employer-sponsored Canadian profit sharing plan that is a type of pension. Periodically, the employer shares the business

profits with all employees or a designated group of employees. The employer's contribution up to a specific limit is tax

deductible, and the employees receiving a share of the profits paid out by the employer can avoid paying federal taxes on the

money received from the DPSP until it is withdrawn.

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deficiency Failure to meet a set performance standard.

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Management

Deficit Reduction Act

Of 1984 (DEFRA)

This statute affects benefits in many ways. It prevents most taxable benefits from being offered as part of a flexible benefits

plan. In terms of health benefits, it makes it mandatory for employers to treat an employee spouse who is over the age of 65,

the same as an employee spouse under 65.

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Defined Benefit

Formula

This is a formula used to determine the benefits due each participant, upon retirement, in a defined benefit plan. The benefit

amount is often related to the years of participation in the plan.

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Defined Benefit Plans

There are basically two kinds of retirement plans: the defined benefit plan and the defined contribution plan. The defined

benefit plan is one in which an employer comes up with a system that outlines how much an employee who is retiring will

receive on a monthly basis for the rest of his/her life. The following are all taken into consideration when calculating the

retirees' monthly stipend: years of employment with the employer, age and salary.

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Defined Contribution

Formula

This is a formula used to establish the amount of contributions made toward a group benefit plan on a yearly basis. This

contribution is typically a designated percentage of the participant's salary.

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Defined Contribution

Plans

There are basically two kinds of retirement plans: the defined benefit plan and the defined contribution plan. The defined

contribution plan is one in which an employer deposits a specific amount into an individual account for each employee.

Accounts such as these are not required to specify how much is to be deposited into the account on a yearly basis, but they

must specify how it is to be done. These kinds of plans are also known as INDIVIDUAL ACCOUNT PLANS.

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delegative leadership A style of leadership in which the leader entrusts decision making to an employee of a group of employees. The leader is still

responsible for their decisions.

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Deming's 14 points Management philosophy to help organizations increase their quality and productivity

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DemotionWhen an employee is assigned to a position lower (in the company's hierarchy) than the employee‘s current position. This may

be as a result of poor performance, company re-organization, or even at an employee's request. Compare with PROMOTION

or a lateral move.

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Demutualization The process of converting a stock insurance company to a mutual insurance company, or vice versa.

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Management

Dental Care BenefitsDental Care Benefits are considered an aspect of health care benefits, although insurance plans ordinarily separate the two.

Dental insurance usually covers preventative care and treatment of teeth, gums, and the mouth. Plans might also cover

orthodontia, X-rays, and cosmetic work.

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Dental Maintenance

OrganizationAn organization like an HMO, but that provides only dental care.

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Dental Plan

Organization (DPO)Similar to the HMO, this is an organization that provides dental care only.

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Management

Dentist-ConsultantA licensed dentist who works for the insurance company, advising them as to the suitability of dental treatment. A licensed

dentist must understand the underwriting objective of the dental plan he/she is advising.

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Management

Department Compa-

Ratio

The compa-ratio identifies exactly where an employee falls in their salary range. It is calculated by dividing the employee's

annual pay by the midpoint of the salary range.

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Dependent Care /

Dependent Care

Assistance

Employers may help to meet employees' child and other dependent care needs through a qualified dependent care assistance

program, whereby employees are reimbursed for dependent care expenses (either directly or indirectly).

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Dependent Care

Referral Programs

For these programs, employers collect sources from within the community of available day care options and presenting these

to employees who need help finding day care.

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Management

Dependent Care

Reimbursement

Account

Many flexible benefit programs include flexible spending accounts, which give employees the opportunity to set aside pretax

funds for the reimbursement of eligible tax-favored welfare benefits. FSAs can be funded through salary reduction, employer

contributions, or a combination of both. Employees can purchase additional benefits, pay health insurance deductibles and

copayments, or pay for child care benefits with the money in their FSAs.

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Dependent Care

Spending Account



contributions, or a combination of both. Employees can purchase additional benefits, pay health insurance deductibles and


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Management

Dependent Life

Insurance

This is a group life insurance policy that is made available, on an elective basis, to cover dependents of group members. It is

usually sold in small amounts intended to cover final expenses.

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Dependent VariableThis is a term used to describe something that must be numerically measured during a test or investigation, in order to answer

a problem.

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DependentsA word used to describe a person who is reliant upon another (usually, the head of a household) for financial support. A

dependent is usually a child, spouse, parent, or sibling of the employee. In some companies, the definition of a dependent has

been extended to include a significant other and, on occasions, son or daughter-in-law.

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Deposit

Administration

Contract

A method of funding a pension plan in which the sponsor of the plan places the insurance company's assets in a general

account. Upon the resignation of a participant, the insurer retrieves enough funds from the general account to pay the plan

participant an annuity. This contract typically protects the sponsor of the plan against loss and guarantees minimum returns.

May be compared with IMMEDIATE PARTICIPATION GUARANTEE (IPG) CONTRACT.

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Deposit Term

Insurance

Not really involving a deposit, this is a kind of term insurance where the premium for the first year is greater than that payable

in subsequent years.

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Deposition /

Depositions

In a deposition, opposing lawyers have the opportunity to review material to be presented and to ask preliminary questions

regarding a case. These sessions are transcribed, so you should worry less about presentation and more about the words that

are to be transcribed in depositions.

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Depreciation Used to describe a decline in value in any given property through wear and tear. Contrast with APPRECIATION.

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Deregulation The removal of entities such as financial markets, road and transport from governmental control.

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Derivative Security Any security (stock options, warrants, convertible securities or other) that may become a share of common stock.

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Determination LetterProvided by the IRS (Internet Revenue Service), this is a letter documenting the full compliance (with its rules) of a pension

plan.

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developing The art of developing the competence and confidence of subordinate leaders through role modeling and training and

development activities related to their current or future duties.

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Deviated RateGroup insurance that adheres to rates put in force by a state insurance commissioner and sometimes offers lower rates than

those recommended in certain areas. The company is said to have 'deviated' from the bureau rate for that area. Typically this

is based on the group's claim experience.

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DHMOsGive employers access to providers offering discounted services. DHMOs are becoming more popular amongst employers as

a way to increase dental benefits while containing costs.

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Diagnostic Related

Groups (DRGS)

A system of health benefit payment, where the payments are based on the individual's diagnosis as opposed to the actual

number of medical services received.

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Diary / LogA method for gathering detailed information about a job by requiring the job incumbent to keep track of his or her specific

activities during a determined period of time.

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Dictionary Of

Occupational Titles

(DOT)

Based on over 75,000 job analyses, this dictionary was developed and produced by the Department of Labor. It defines over

20,000 jobs. Supposedly, the DOT has been replaced by O*Net, a new method of defining jobs, adopted by the Federal

Government. The O*Net, however, is held in some contempt by practitioners, due to its complexity.

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DifferentialIn expatriate compensation, this is used to describe an amount of money used to compensate for the discrepancies in costs

between the home and the assignment locations.

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Management

Diluted Earnings Per

Share

If all the convertible shares were to be traded in for stock, this would be the value/earnings per share. It is a more accurate

reflection of a company's earnings.

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Dilution (Percent) A decrease in the equity of a share of stock due to additional shares being issued.

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Dining Facilities In order to keep employees on-site for lunch, many employers provide a dining facility to employees.

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Direct ObservationIn order to thoroughly understand a job content, this method of job analysis involves the direct observation of employee(s)

while they perform their duties. This method is usually used when analyzing production type jobs, which are very repetitive in

nature.

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Direct Pay / Cash

Compensation

Payments made to employees in direct exchange for their contributions to an organization (does not include bonuses, stock

options, life insurance, 401K or other benefits).

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Direct Response

Distribution System

Also known as 'Direct response marketing', this is a way in which insurance companies sell policies directly to customers. It

relies on media advertisements, telephone solicitations, and direct mail. By adopting this type of marketing, insurance

companies bypass insurance agents.

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Direct Response

Marketing

This is a way in which insurance companies sell policies directly to customers. It relies on media advertisements, telephone

solicitations, and direct mail. By adopting this type of marketing, insurance companies bypass insurance agents.

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Direct Seller In terms of sales compensation, this is one whose sole purpose or objective is to obtain an order from the end user.

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Directly and Closely

Related Work

Under FLSA, this work may include physical tasks and menial tasks that arise out of exempt duties, and the routine work

without which the exempt employee‘s exempt work cannot be performed properly. Work ‗‗directly and closely related‘‘ to the

performance of exempt duties may also include recordkeeping; monitoring and adjusting machinery; taking notes; using the

computer to create documents or presentations; opening the mail for the purpose of reading it and making decisions; and

using a photocopier or fax machine. Work is not ‗‗directly and closely related‘‘ if the work is remotely related or completely

unrelated to exempt duties. (Section 541.703)

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Director And Officer

(D&O) Liability

Insurance

Additional insurance employed by companies in order to protect members of the board of directors and other key officers from

law suits for various kinds of malpractice and or oversight.

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Directors FeesDirectors fees are fees received by Directors from a Corporation for services rendered. In a situation where a Director is not an

actual employees of a company, the fees are considered to be self employment income for tax purposes and must be reported

to the IRS.

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Directors Of

Corporations

May be internal or external persons elected by shareholders. It is the Board's responsibility to determine company policies,

elect the president, vice president, and all other operation officers.

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Management

Disability A condition rendering an insured party incapable of performing his or her duties.

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Management

Disability BenefitsThese are usually paid monthly to an insured who is rendered unable to work prior to his or her normal retirement date.

Includes both long and short-term disability benefits.

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Disability Buy-Out

Insurance

The purpose of this insurance is to provide funds to a business or to a partnership so that it may purchase the interests of a

partner or a stock holder who is long-term disabled.‖

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Disability Income

Insurance

A kind of health insurance designed to provide periodic payments (usually monthly) in order to compensate insured people for

a percentage of their income lost as a result of the disability. Also known as loss of time insurance. Compare with LONG-

TERM and SHORT-TERM DISABILITY INCOME INSURANCE.

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Disability TableSeveral definitions: (1) A calculation of the probability of becoming disabled at each age. (2) A calculation of the number of

people who remain disabled at each age and the length of the disability.

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Disability Under Ada

Under the Americans with Disabilities Act of 1990 a disability is defined as a physical or other impairment, which substantially

affects a person's ability to carry out one or more major life activities. In order for it to be said that a disability exists, it has to in

fact substantially limit a major life activity. It is not enough that it could or might limit such an activity if corrective measures are

not taken. A person whose impairment is not corrected by medication (or by other measures), therefore does not have an

impairment as defined by the ADA.

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Disabled / DisabilityUnder the Americans with Disabilities Act (ADA), employees are considered to be disabled if their "earning or productive

capacity" in the occupation in which they engage is impaired by a physical or mental disability, including alcoholism, or drug

addiction.

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Disabled Life AnnuityThis is a term used to describe a series of payments made to an insured party, which is contingent upon that person being

both alive and disabled.

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Discharge ProvisionThis is a part of the small estates statute, which frees an insurance company from liability that may arise under an insurance

policy if it were to pay the proceeds to an insured's estate.‖

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Disciplinary

procedure

A procedure carried out in the workplace in the event of an employee committing some act contrary to terms of the

employment agreement. If the act is regarded as Gross Misconduct this may lead to Summary Dismissal.

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Disclaimer Statement

In general legal terms, a disclaimer is a term used to describe a denial or repudiation of responsibility for an act or thing. May

also be an attempt to limit liabilities. Most contracts contain a disclaimer clauses of sorts. In an employment contract, a

disclaimer may take the form of a clause stating that the job description provided is not conclusive (For example, it may say:

'...to perform other duties as needed.').

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Disclosure

Requirements

Employers are required, under the Employee Retirement Income Security Act (ERISA), to disclose to employees information

about benefit plan provisions and legal protections provided under ERISA.

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Discontinuity IndexA test that is required by the NAIC Model Life Insurance Disclosure Regulation. Its objective is to pinpoint instances in which

policy illustrations have been tampered with, so that they show an unrealistic/untrue progression of premiums, dividends and

benefits.

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Discount RateMay also be known as rediscount rate or bank rate. This is the interest rate charged by a central bank for reserve fund loans to

other financial institutions. Initially this was an actual discount (an interest charge withheld out from the amount loaned); but

now it is an interest charge in its own right, despite the fact that it is still known as discount rate.

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Discount Stock

OptionRights to a stock option at a price less than 100 percent of fair market value on date of grant.

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Management

Discounted Cash

Flow

Calculation of cash flow anticipated in the future using an assumed interest rate in order to determine the current cash value of

the future flows.

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Management

Discounted

Restricted Stock

Purchase

The purchase, by an employee, of restricted stock at a price that is below market rate.

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Discounts On

Merchandise And

Services

Ordinarily, any benefit provided to an employee is taxable unless specifically excluded by Statute. When specifically excluded,

it is known as a discount.

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Management

DiscreteThis is a term used to describe a kind of performance cycle, whereby the performance of an employee is limited to a particular

performance time period without any relation or reference to past or future performance time periods. As an example: 'Each

month is discrete, because performance is measured on its own'.

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Discrete DataIn terms of statistics, this describes variables that assume only particular, distinct values and that are not continuous. For

example, salary levels and performance classifications are discrete variables, whereas height and weight are continuous

variables.

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Management

Discretionary

(Informal) Bonus Plan

A bonus plan that is completely at the discretion of management. Management decides on the total amount of bonus to be

dispersed, and the percentage each employee is to receive after a performance period. These types of bonuses have no pre-

established formulas nor are there any guarantees attached.

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Discrimination The favoring of one group of people to the detriment of others.

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Management

Discrimination LawsSince the 1960's a series of anti-discrimination laws have been enacted. The major one has been the Civil Rights Act of 1964,

as amended in 1972 and 1991. Title VII of that Act covers employment.

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Management

Discrimination

Testing

This is a method used to determine whether benefits within a plan are being provided fairly and equally to a wide range of

employees.

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Management

DisintermediationThis is the process whereby money is removed from an agent for the purpose of earning a higher yield elsewhere, typically with

another financial agent / intermediary. Historically, disintermediation, has been a problem source for life and health insurers

especially during periods of economic depression and or high inflation.

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Disparate TreatmentThe treatment of members of a protected class of people (under Title VII of the Civil Rights Act or the Equal Pay Act), which is

inconsistent with the provisions of the Civil Rights Act or the Equal Pay Act. This would include any company policy or practice

that is deemed to be inconsistent with either of the Acts.

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Disqualified PersonA disqualified person is one who in the past five years was in a position to exercise substantial influence over the affairs of a

tax-exempt organization. This person may be subject to IRS fines under INTERMEDIATE SANCTIONS regulations.

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Disqualifying

Disposition (of an

Incentive Stock

Option ISO)

This is a term used to describe the premature sale or disposition of shares (in other words when the required holding period is

not met). When this occurs, the ISO is taxed at the regular rate.

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Distance LearningThe process of delivering educational or instructional programs to locations away from a classroom or site to another location

by varying technology such as video or audio-conferencing, computers, web-based applications or other multimedia

communications.

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Management

Distance Learning

Center (DLC)

The ERI Distance Learning Center (DLC) provides compensation and benefit courses. Online education lets you attend class

in your home, your office, or while traveling, 24 hours a day, 7 days a week. All you need is a computer with an Internet

connection. Each course examines a topic used daily by HR professionals. The DLC offers downloadable course materials,

interactive self-study exercises, instantly graded exams, and the ability to track credits and print completion certificates. DLC

courses are approved for PHR/GPHR/SPHR, CBP/CCP/GRP, CPE, JCA, CLE, and CE credit. To enroll, go to www.eridlc.com

and click on Enroll Now! at the top of the page.

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Distress TerminationA pension plan that is under funded and discontinued by a company. Contrast with STANDARD PLAN TERMINATION.

Compare with VOLUNTARY and INVOLUNTARY PLAN TERMINATION.

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Management

Distribution ExpensesThis is a term used to describe the expenses incurred while making insurance products available to the public (typically, these

include the cost of printing, postage, telecommunication expenses, sales representative wages etc.).

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Distribution SystemIn terms of insurance, this is a term employed to describe all the companies and people involved with getting the product from

insurance companies to customers (e.g., those involved with all the necessary marketing activities).

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DistributionsWhere benefits are concerned, this is a word employed to describe any payments made to a beneficiary / participant (e.g., the

disbursements of profits to shareholders, interests earned, or dividends.) May also be used to describe payments from a

pension plan).

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Distributive

bargaining

Related to the process of Negotiation. Known also as Competitive bargaining – The parties are concerned with their respective

shares of the benefits available and compete and conflict with each other until one side wins an increased share at the

expense of the other.

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Distributive JusticeThe theory that people involved in an exchange are most happy if the relationship between the outcomes and inputs is the

same all parties. This theory is attributable to G.C.Homans and forms the basis for the equity theory.

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Distributor /

WholesalerThese are the 'middle men' in an indirect channel who buy products in bulk for the sole purpose of re-selling them.

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Divergent DataMeasurements that move apart from the norm. They move ahead of the common point or fail to approach the limit of a

distribution.

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diversity Committing to establish an environment where the full potential of all employees can be tapped by paying attention to, and

taking into account their differences in work background, experience, age, gender, race, ethic origin, physical abilities, religious

belief, sexual orientation, and other perceived differences.

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DivestitureA transaction by a company, which disposes of, or sells an asset owned by a company or a part of the business. Depending on

the circumstances, may also be known as spin-off.

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Dividend / Dividend

Payment

Several definitions: 1) In terms of investments and shares, this is a distribution to shareholders of earnings. Typically this

distribution is made on a quarterly basis in the form of cash or stocks. The amount to be distributed is decided upon by the B

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Management

Dividend

Accumulations

An option made available to the policyholder of a life insurance policy, whereby he or she may leave their dividends with the

insurer. Doing so often results in an increased amount of interests earned from the insurer's investments.

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Dividend ExpensesThis represents the cost of maintenance of each policy during the course of the current year. The insurance company

calculates this by using the dividends owed to policy owners.

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Dividend For

Organization

Insurance

This is the amount to be reimbursed to the insured of all or a part of the excess of premiums paid (e.g., premium not needed

by the insurer to pay claims, establish reserves, and cover expenses).

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Dividend Interest

Rate

Used to calculate dividends owed to policyowners, the dividend interest rate is the actual rate of earnings on an insurer's

investments.

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Management

Dividend OptionsThis is a term used to describe the several possibilities that a policyowner has to choose from when receiving a share of the

company's surplus. See and compare with AUTOMATIC DIVIDEND OPTION, CASH PAYMENT OPTION, DIVIDEND

ACCUMULATIONS, and PREMIUM REDUCTION OPTION.

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Dividend Rate Of

Mortality

This is the term used to describe the mortality rate being experienced by the insurance company on the policies that it has

sold. May also be described as the MORTALITY RATE for a particular age that the insurance company decides to use to

calculate the dividends owed to the policyowners.

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Divisible SurplusThe part of an insurance company's earnings that is to be disbursed among the owners of the company's policies. See

SURPLUS.

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DivorceA divorce of an employee can affect that person's benefits. The ex-spouse has rights to retirement benefits accrued during the

time of the marriage. The ex-spouse also may apply for health benefits under COBRA. If there are children, then there are

payments for child support, which may be enforced through garnishment.

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Doctrine Of

Reasonable

Expectations

This is a doctrine applied by the courts, where (even though the policy does not expressly lay it out) the reasonable

expectations of policyowners and beneficiaries will be upheld.

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DOL U.S. Department of Labor.

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Dollar Value of

Taxable Benefits

In general, the value of a benefit to an employee for tax purposes is the cost incurred by the employer in providing that benefit.

This cost must include all taxes the employer pays in providing the benefit, but it is the net cost (as when the employee pays a

portion of the cost).

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Domestic CorporationA company located in and doing business in the state in which it was incorporated. Compare with FOREIGN CORPORATION

and ALIEN CORPORATION.

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Domestic PartnersSome organizations recognize, as a family unit for benefit purposes, committed relationships between two unrelated people

(whether of the same or opposite sex). These relationships are similar to, but which does not involve, an official marriage.

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DOT

U.S. Department of Labor's Dictionary of Occupational Titles provided the basis for many job descriptions still in use today. The

latest version of the DOT has 12,761 occupations, but many are considered outdated and incomplete. That‘s because the last

full-scale review and rewrite of the DOT was in 1977, so it does not take into account today‘s economy, especially in high-tech

fields. To view DOT descriptions, see http://www.oalj.dol.gov/libdot.htm, or use ERI's Platform Library and select Resources I

Immigration Data I DOT Data. To find out about ERI's update to the DOT, the enhanced Dictionary of Occupational Titles, see

www.eri-edot.com.

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Double Declining

Balance Depreciation

A depreciation method, whereby an accelerated depreciation is noted as expense during the first year and then the depreciable

balance is reduced by an exact percentage that reflects the acceleration.

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Management

Double IndemnityA type of death benefit policy that, if an insured's death is accidental / unnatural, pays an additional benefit that is equal to the

basic benefit. Also known as accidental death benefit (ADB).

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Double TaxationThe profits of any business are subject to corporate income tax. When any portion of these profits is distributed to

stockholders, the distribution is also taxed as income to the stockholder. In most people‘s eyes, this is a case of double

taxation.

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Dow Jones Industrial

Average (DJIA)

The most established and most widely watched stock index in the world. The Dow, as it is most commonly known, includes 30

stocks (which typically are stocks of only the highest quality of common stocks listed on the New York Stock Exchange). The

Dow is very often considered to be a good indicator as to how the entire market is fairing. However, because the Dow only

includes 30 stocks, there are some who don't necessarily consider it to be a reliable barometer with which to measure the

entire stock market. In recent times wider, more all-encompassing indexes are also commonly watched.

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DowngradingThe movement of a job to a lower level in a job-evaluation system (i.e., to a lower job grade and/or pay range within a pay

structure).

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DownsizingDownsizing means to reduce the number of employees in an organization. Downsizing or lay-offs reduce the size of a work

force. Used sparingly, and with planning, downsizing can be an organizational lifesaver, but when layoffs are used repeatedly

without a thoughtful strategy, downsizing can destroy an organization's effectiveness. Also known as: reduction in force.

DHuman

Resource

Management

Draw A cash advance against future performance. May be recoverable or non-recoverable.

DHuman

Resource

Management

Dread Disease PolicyA type of health insurance policy that covers only expenses incurred by treatment for specific diseases named in the policy

(e.g. cancer). See LIMITED COVERAGE POLICY.

DHuman

Resource

Management

Drinking Criticism In terms of underwriting, used to describe evidence that the abuse of alcohol or that alcoholism exists.

DHuman

Resource

Management

Drug AbuseEmployees, who have been convicted of a felony drug offence, must be disciplined by their employers, per the Drug-Free

Workplace Act (e.g. of discipline would be the completion of a drug abuse rehabilitation program).

DHuman

Resource

Management

Drug-Free Workplace

Act of 1988

The Drug-Free Workplace Act of 1988 requires most federal government contractors and federal grantees to take specific

steps to ensure a drug-free workplace. The law requires contractors to: 1. Develop and publish a policy statement notifying

employees that the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited

in the workplace. 2. Establish a drug awareness program that tells employees about available drug counseling, rehabilitation,

and the Employee Assistance Program (EAP), if the employer offers one. 3. Impose sanctions on employees who are

convicted of a criminal drug offense, or require them to participate satisfactorily in a drug abuse assistance or rehabilitation

program.

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DSOSOperate much like medical management service organizations, where a management company buys dentists' practices and

provides them with administrative support.

DHuman

Resource

Management

Dual Labor Markets organizations will operate with a small Core Labor Force and a Peripheral Labor Force

DHuman

Resource

Management

Dual Registration When a registered representative is licensed with more than one broker, he or she is said to have a dual registration.

DHuman

Resource

Management

Dual-Choice

Provision

The Health Maintenance Organization Act of 1973 states that employers with more than 25 employees and who meet a certain

criteria, must offer a federally qualified HMO as an alternative to other more common health plan.

DHuman

Resource

Management

Due diligenceA critical component of mergers and acquisitions, it is the process by investigation and evaluation is conducted to examine the

details of a particular investment or purchase by obtaining sufficient and accurate information or documents which may

influence the outcome of the transaction.

DHuman

Resource

Management

Due Diligence

Process

Due diligence is an indispensable part of the acquisition process, and therefore, investment. The objective of due diligence is

to establish the financial and operating stability of the company being acquired. The due diligence process involves a diverse

group of experts (lawyers, accountants, engineers, real estate professionals, etc.) who must examine / evaluate data and

assess the property being acquired for price affecting conditions.

DHuman

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Management

Dues And

Membership Fees

Organizations may choose to pay membership dues to chambers of commerce or other business or professional groups that

employees join as a consequence of their employment. Conversely, organizations may be required under a collective

bargaining agreement to collect union dues or assessments from employees' pay, and turn the proceeds over to the union.

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Duplicate Coverage

Inquiry (DCI) Form

I n the United States, when a health insurance company receives a claim, this is the form it fills out and sends to another

insurance company. The goal is to determine whether the second company also covers the claim received.

EHuman

Resource

Management

Early Retirement Age

(Pension Plans)

This is the minimum age at which an employee may retire. An employee who chooses to retire early may also chose to start

receiving his or her retirement income at once or may chose to have it deferred. If immediate receipt of income is elected,

typically, it would be paid at a reduced rate.

EHuman

Resource

Management

Early Retirement

Agreements

There are two ways in which early retirement agreements can occur. In some retirement plans early retirement is built in. This

is especially true of defined benefit plans. Many such plans define an early age when the employee may retire at a reduced

monthly payment, based upon age, tenure, and salary. In a defined contribution plan, the employee would be able to draw out

his/her account at an early age. Organizations may choose to initiate an early retirement program in lieu of lay offs. These must

be voluntary early retirement agreements. This is done by adding years to workers' ages and lengths of service. Some firms

make the offer more attractive by offering outplacement assistance. Employees may be more likely to elect early retirement if

the employer makes it easier to find new jobs through outplacement counseling.

EHuman

Resource

Management

Earned Time OffETO is earned each pay cycle, but is available the cycle after it first accrued. As an employee's years of service increase so

does the rate of ETO accrual.

EHuman

Resource

Management

EarningsEarnings include base pay, premium, overtime and bonuses. They are the total wages and or cash earned within a specific

period of time.

EHuman

Resource

Management

Earnings And Profits This represents EARNINGS and PROFITS as computed for tax purposes.

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Earnings Per Share

(EPS)

Term used to describe the total earnings of an organization divided by the number of outstanding shares. EPS is sometimes

used as a basis for executive incentives. Also see DILUTED EARNINGS PER SHARE.

EHuman

Resource

Management

Earnings StatementA detailed summary of the income and expenses of a business over a period of time (usually quarterly, semiannually or

annually) showing the net income or loss incurred.

EHuman

Resource

Management

Economic Benefit Measurable benefit not necessarily in the form of cash.

EHuman

Resource

Management

Economic Value

Added (EVA)

This is a species of Residual Income. EVA is determined by subtracting from the income, the sum of cost of capital multiplied

by the invested capital. EVA is often the measure employed in the determination of an organization‘s economic profit. It is not

uncommon for EVA to be used as a basis for incentive programs.

EHuman

Resource

Management

Edgar ExtractsEDGAR is a database maintained by the Securities Exchange Commission (SEC). All publicly traded companies in the U.S.

must register data into this database. EDGAR can be reached through the Internet. Financial data is available on all publicly

traded companies.

EHuman

Resource

Management

Education Individual

Retirement Account

(IRA)

A taxpayer can establish an education IRA to pay the qualified higher education expenses of a named child or grandchild,

under the age of 18.

EHuman

Resource

Management

Educational BenefitsCompanies may include educational benefits in their benefit package in a number of forms. The most common is an

educational reimbursement plan, in which employees are reimbursed for the costs of schooling or training that can be shown to

be related to their job or to their career in the company.

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Effective DateSeveral definitions: (1) The date on which a health insurance policy and/or retirement plan kicks into effect and the insured

party's coverage actually begins. (2) The date on which an increase in salary or pay rate goes into effect.

EHuman

Resource

Management

Effective Tax Rate The ratio of income tax actually paid divided by gross income, showing the percentage of income actually paid in taxes.

EHuman

Resource

Management

efficiency A measure (as a percentage) of the actual output to the standard output expected. Efficiency measures how well someone is

performing relative to expectations.

EHuman

Resource

Management

Effort BargainThe effort bargain is what an employee receives (level of compensation, benefits, etc.) from an employer in exchange for what

the employee: brings to the table (knowledge and experience) AND does (the tasks of the job or the ―effort‖ made) for that

employer. The terms of the bargain are typically outlined in an employment contract.

EHuman

Resource

Management

Elder Care ProgramsPrograms designed to assist the elderly in day-to-day activities. Usually this refers to the care of an elderly relative (financially,

emotionally or even mentally).

EHuman

Resource

Management

Election PeriodThis represents the 60 days, after having been notified of one's COBRA eligibility, during which an ex-employee may opt to

accept the continuation of health coverage or decline.

EHuman

Resource

Management

Elective Contributions

Or Elective Deferrals

Contributions made to an employee's 401(k) plan, made by an employer on the behalf of the employee. Contributions are

made with before tax monies from a reduction in the employee's pay check.

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Elective SurgeryUnder a health insurance program, elective surgery is a covered procedure, but one that requires adequate time to schedule

any necessary diagnostic tests and/or initiation of treatment. This type of surgery usually requires the employee to obtain a

second opinion as to the necessity of the surgery and/or review by the insurance company.

EHuman

Resource

Management

Electronic signatureAn electronic sound, symbol, or process attached to or logically associated with a contract or record. This is executed by a

person whose intent is to sign a record or contract. An electronic signature may be a number or code inputted on a telephone

key pad, or the clicking of an I Accept box on a webpage. It indicates acceptance of terms.

EHuman

Resource

Management

Eligibility Date This is the date on which an employee and/or his or her dependents are eligible for benefits.

EHuman

Resource

Management

Eligibility For A PlanThe foundation for establishing the employees or class of individuals who are qualified to participate in a specific plan (e.g.,

supplemental benefit or incentive plan).

EHuman

Resource

Management

Eligibility PeriodTypically 31 days (sometimes 3 months) within which a recently employed individual has to elect to participate in an employer‘s

insurance plan (which is contributory in nature).

EHuman

Resource

Management

Eligibility

Requirements

Requirements that an individual must meet before being able to participate in a company's life insurance plan, health coverage

plan or retirement, benefit.

EHuman

Resource

Management

Eligible PayrollEstablished by calculating the total amount of salaries / wages of employees who, though eligible, do not receive a salary

increase.

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Elimination Period(1) Duration between the start of employment and date upon which the employee is actually eligible to receive benefits. (2) The

time frame between an individual's disability and the beginning of benefits from the policy. Also known as qualification period

(Canada) or WAITING PERIOD.

EHuman

Resource

Management

Emergency Room

Coverages

Emergency room services are typically covered in most health plans. In managed care plans, the participant may be required

to use a specified emergency room, unless out of area. Emergency room services are covered in Part B of Medicare.

EHuman

Resource

Management

Emerging Issues

Task Force

This task force was created by FASB to deal with matters not expressly falling under GAAP. Jurisdiction includes but not

limited to matters concerning stocks granted to employees.

EHuman

Resource

Management

Emotional

Intelligence

Describes the mental ability an individual possess enabling him/her to be sensitive and understanding to the emotions of others

as well as being able to manage their own emotions and impulses.

EHuman

Resource

Management

Employee

Achievement Awards

Any employer can establish an employee achievement award program, using whatever criteria wished to determine

achievement. However, under IRS rules, the employer may establish a qualified plan based upon length of service and /or

safety.

EHuman

Resource

Management

Employee Assistance

Programs

An Employee Assistance Program (EAP) is an employer-initiated program to assist employees in dealing with problems such

as substance abuse, marital discord, and employment problems.

EHuman

Resource

Management

Employee BenefitsForms of compensation (excluding cash) available to employees. Benefits include but are in no way limited to the following:

health coverage, vacation, income protection, retirement savings.

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Employee

ContributionsPayments made by an employee to fund a specific benefit, thereby contributing to or covering the employer's entire cost.

EHuman

Resource

Management

Employee Counseling

Services

Counseling for the mental and physical health of the employee is not taxable. Neither is retirement counseling. Other kinds of

counseling are taxable. In Quebec, counseling for physical and mental health is defined narrowly as stress management,

tobacco, drug and alcohol abuse.

EHuman

Resource

Management

Employee DiscountsEmployers may grant discounts to employees for their products or services. These discounts can be qualified as exclusions

from gross income, provided that certain requirements are met.

EHuman

Resource

Management

Employee

Empowerment

Empowerment is the process of enabling or authorizing an individual to think, behave, take action, and control work and

decisionmaking in autonomous ways. It is the state of feeling self-empowered to take control of one's own destiny.

Empowerment rules as a development strategy. Learn more about what empowerment is – and is not.

EHuman

Resource

Management

Employee

Involvement

Employee involvement is creating an environment in which people have an impact on decisions and actions that affect their

jobs. Employee involvement is not the goal nor is it a tool, as practiced in many organizations. Rather, employee involvement is

a management and leadership philosophy about how people are most enabled to contribute. Find out more about employee

involvement.

EHuman

Resource

Management

Employee

Participation

Several definitions: (1)The extent to which employees are involved with the implementation and or the administration of

benefits and pay. This may also include the extent to which employees are involved with other company programs. (2) The

level of voluntary participation of an employee in company benefits plan.

EHuman

Resource

Management

Employee RelationsA broad term used to refer to the general management and planning of activities related to developing, maintaining, and

improving employee relationships by communicating with employees, processing grievances/disputes, etc.

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Employee retentionorganizational policies and practices designed to meet the diverse needs of employees, and create an environment that

encourages employees to remain employed.

EHuman

Resource

Management

Employee Retirement

Income Security Act

Of 1974 (ERISA)

A Federal statute that establishes the following: (1) Rights of beneficiaries to pension benefits. (2) Standards that must be

followed when investing pension plan assets. (3) Requirements that must be met before the disclosure of pension provisions

and or funding. The Pension Benefit Guaranty is also established by ERISA.

EHuman

Resource

Management

Employee Services

And AllowancesA category of benefits inclusive of relocation packages, subsidies on company-provided food service, discounts, and more.

EHuman

Resource

Management

Employee Stock

Option Plan (ESOP)

A contract between a company and an employee giving the employee the right to purchase a specific number of shares in the

company for a fixed price, during a certain period of time. Employee Stock Option Plans should not be confused with the term

EMPLOYEE STOCK OWNERSHIP PLANS (also ESOPs), which are retirement plans.

EHuman

Resource

Management

Employee Stock

Ownership Plan

(ESOP)

Typically, this is benefit plan that requires that an employee meet certain requirements in order to participate and that has a

portion of its investments (if not all) on company stock. An Employee Stock Ownership Plan (ESOP) is a type of defined

contribution retirement plan in which the account of the employee consists of company stock.

EHuman

Resource

Management

Employees Employees are persons who are compensated for services performed and whose duties are under the control of an employer.

EHuman

Resource

Management

Employee's Cost

Basis

This is the amount taken away from the total amount paid to a pension beneficiary, so as to determine the part of the

distribution that is taxable.

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Employees Profit

Sharing Plan (EPSP)

In Canada, this is a profit sharing species, whereby the employer makes a deposit of funds in a trust account, but is able to

withdraw the amount deposited for tax purposes. Employees typically are taxed on contributions made on their behalf during

the year in which the contribution is made and also taxed on interests earned, if any.

EHuman

Resource

Management

Employment Contract

In a way, all employment is an employment contract, but at times it is in the interests of the company to establish a written

agreement. This is usually for a key employee. Such a contract usually includes a written guarantee of receiving certain

rewards, regardless of the results produced on the job beyond a stipulated period. The employment contract may also have

other stipulations, such as a no competition clause (where the new employee agrees not to compete with the business of the

present employer for a certain amount of time).

EHuman

Resource

Management

Employment TaxesIn the United States, employers are required to pay a number of taxes on their payroll. These include Social Security,

Medicare, and Unemployment taxes. Employees must also pay toward Social Security and Medicare. In addition, employees

have deductions for income taxes.

EHuman

Resource

Management

EmpowermentThe process of enabling or authorizing an individual to think, behave, take action, and control work and decision-making in

autonomous ways.

EHuman

Resource

Management

EndorsementAlso known as a RIDER, this is an amendment made to an insurance contract, which then becomes part of the agreement by

expanding or by limiting the existing terms.

EHuman

Resource

Management

Endorsement Method

The way the beneficiary to a life insurance policy is changed. Change may be effected in the following ways: (1) The owner of

the policy may return the contract to the insurer. The insurance company then ‗ endorses‘ it with the name(s) of any new

beneficiary or (2) the policy is not actually returned to the insurer. Instead, the policy owner requests (over the telephone) that a

change be made reflecting, the fact that there are new beneficiaries. Then the insurer mails an endorsement, reflecting the

change, to the policy owner. Compare with recording method.

EHuman

Resource

Management

Endowment

Insurance

A kind of life insurance policy providing benefits (1) if death occurs within a pre-determined number of years, or (2) if after a pre-

determined number of years, the insured is still living.

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Enhancement Type

Policy

A life insurance policy whereby part of the dividend is used to provide paid-up-additions and the other is used to produce a pre-

established death benefit.

EHuman

Resource

Management

Enrolled ActuaryAn actuary of a pension who has met the requirements and who has been enrolled by the Joint Board for the Enrollment of

Actuaries (a federal agency).

EHuman

Resource

Management

Entertainment

Expenses

Employees are entitled to reimbursement for business-related entertainment expenses; these payment are not considered

wages if maintained separately. Business must be the purpose of the entertainment or meal such that there is at least

discussion of business during the time. While meals are the most common entertainment items, sporting events, concerts, or

other entertainment is allowable.

EHuman

Resource

Management

Entire Contract

ProvisionThis is an insurance clause that states that only the actual policy and the application for it are binding on the parties.

EHuman

Resource

Management

environment 1. The political, strategic, or operational context within the organization. 2. The external environment is the environment outside

the organization.

EHuman

Resource

Management

Equal Employment

Opportunity

Commission (EEOC)

The purpose of the Equal Employment Opportunity Commission (EEOC) is to administer the various discrimination laws of the

federal government. EEOC has the authority to investigate and conciliate charges of discrimination because of race, color,

religion, sex, or national origin by employers, unions, employment agencies, and joint apprenticeship or training committees.

EHuman

Resource

Management

Equal Pay Act Of

1963

Makes gender based differentials in pay (wage discrimination) illegal, for jobs that are similar in terms of qualification

requirements and that are performed under similar working conditions

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Equal Pay For

Comparable Work

This doctrine goes beyond the Equal Pay Act of 1963. It states that women must be paid the same in a female dominated job

type as a man for a job that is substantially of the same value in a male dominated job type. This doctrine is in effect saying

that job value / worth can be measured.

EHuman

Resource

Management

Equal Pay For Equal

Work

The intention of this doctrine is to protect women from gender based discrimination in pay and the U.S. Equal Pay Act of 1963

embodies it.

EHuman

Resource

Management

Equitable AssignmentA transfer which though it does not meet the requirements needed for a legal assignment, will be enforced because it is the

right thing (the equitable or the fair thing to do).

EHuman

Resource

Management

EquityWhen used in reference to direct pay this concept refers to a criterion of pay based on similar responsibilities and contribution

to the organization. It may focus on the ―fairness‖ of pay between employees within or outside the organization.

EHuman

Resource

Management

Equity Allocation A term used to describe when a part of a retirement plan is funded by common stock investments (investments in equity).

EHuman

Resource

Management

Equity Investment An investment which grants the investor an ownership title and or voting rights.

EHuman

Resource

Management

Equity MethodAn accounting technique used by an investor who owns 20% to 50% of the voting shares / voting common shares. See cost

method and consolidated subsidiary accounting.

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Management

Equity PensionA pension plan providing benefits, partially at least, which varies according to the success of the investment in common stocks

(or other investments). The equity part of the pension benefit is intended to provide benefits that grow as the rate of inflation

rises.

EHuman

Resource

Management

Equity theoryBased on the notion that people are motivated by a desire for fairness, that is, to be treated fairly and will compare their own

efforts and the rewards of others in the organization with a view to judging the fairness of their treatment.

EHuman

Resource

Management

Equity-Based

Insurance Product

A life policy or an annuity whereby the value and benefit fluctuate depending on the performance of the equity investments.

Owners of this kind of insurance policy, in effect are accepting and or risking to sharing in the insurer's gains and losses.

EHuman

Resource

Management

Equivalent Annual

Percent Increase

(EAPI)

Same as annualized increase percent.

EHuman

Resource

Management

Equivalent Level

Annual Dividend

(ELAD)

An amount presented as part of interest-adjusted method of comparing cost of life policies, to consumers. The equivalent level

annual dividend is meant to represent the part of the interest-adjusted payment and the cost that is, in effect, not guaranteed

by the insurer, because dividends will change in the future as the insurer's experience changes. This amount gives the buyer

an idea of the extent that nonguaranteed amounts affect the interest-adjusted payment and the cost of a policy.

EHuman

Resource

Management

Equivalent Single

Payment

A payment which is equal in amount to a series of other lesser payments and which may be made in place of several other

payments.

EHuman

Resource

Management

Equivocal Suicide A suicide which leaves no doubt as to the deceased's intention to die as a result of a self-inflicted destructive act.

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Management

e-Recruiting

Recruiting services provided over the Internet are called eRecruiting and offer the ability for job seekers to log in and post their

resumes. Similarly, organizations may post job openings with these online services, using email and chatboards to further

communication. Typically, the Internet service provider chargers the organization a fee for posting the open position

information.

EHuman

Resource

Management

ErgonomicsA methodical application of known information about every aspect (physical, psychological and social attributes) of human

beings to the establishment and use of everything that may affect a person's working condition. This includes working

environment, layout, training, the organization of the work-load and the job itself.

EHuman

Resource

Management

ERI Data

Observations /

Counts

ERI's software data is based upon a plethora of original sources, including hundreds of surveys. Some of these surveys do not

specify the number of enterprises surveyed or the number of incumbent observations reported. Other surveys do enumerate

the number of observations, but their totalities may involve redundant counts. In keeping with our constant insistence on

accuracy and statistical precision, ERI declines to estimate how many total job incumbents are represented by the current

consensus updated figures we report by industry, location, relevant experience, or size dimension from every possible source.

Instead, we provide only the reliability statistics for one single identifiable survey out of the hundreds that we analyze. This

source's counts can be proven accurate and precise (even if somewhat conservative, given all the many additional sources we

also reference). For the Salary Assessor software, this source is the Bureau of Labor Statistic's OES; for the Executive

Compensation Assessor software this is the SEC Edgar list of all ~14,000 registered US corporations. For Canada, we receive

no similar reliability statistics from Statistics Canada.

EHuman

Resource

Management

ERI Distance

Learning Center

(DLC)

The ERI Distance Learning Center (DLC) provides compensation and benefit courses. Online education lets you attend class

in your home, your office, or while traveling - 24 hours a day, 7 days a week. All you need is a computer with an Internet

connection. Each course examines a topic used daily by HR professionals. The DLC offers downloadable course materials,

interactive self-study exercises, instantly graded exams, and the ability to track credits and print completion certificates.

Courses are free, and continuing education credit costs just $19 per certificate. DLC courses are approved for PHR/SPHR,

CBP/CCP/GRP, CPE, JCA, CLE, and CE credit. To enroll, go to www.eridlc.com and click on Enroll Now! at the top of the

page.

EHuman

Resource

Management

ERISA

The Employee Retirement Income Security Act of 1974 (ERISA) was passed to ensure that pensions offered by private-

industry employers met certain standards and were received by employees. ERISA does not require employers to offer

pension programs. But ERISA does require that those who offer pension programs follow certain rules if they want favorable

tax treatment for their contributions and employee‘s deferral of income. ERISA‘s four basic requirements cover participation,

vesting, funding and fiduciary duties. For more information on ERISA, see DLC Courses 15, 42 and 74.

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Management

ERPERPs are the most common form of EDUCATIONAL BENEFIT. Under an ERP an employer could fully or partially reimburse

an employee for education or training expenses on a pay-as-you-go basis.

EHuman

Resource

Management

Error And Omissions

(E&O) Insurance

A type of insurance which is designed to cover claims resulting from negligent acts and or mistakes of an insurance agent,

including but not limited to (1) his or negligent acts or omissions or (2) mistakes made by individuals for whom the agent is

vicariously liable.

EHuman

Resource

Management

ESOPA contract between a company and an employee, giving the employee the right to purchase a specific number of shares in the

company for a fixed price, during a certain period of time. Employee Stock Option Plans should not be confused with the term

EMPLOYEE STOCK OWNERSHIP PLANS (also ESOPs), which are retirement plans.

EHuman

Resource

Management

esprit The spirit, soul, and state of mind of an organization. It is the overall consciousness of the organization that a person identifies

with and feels a part of.

EHuman

Resource

Management

EstatesBoth assets and liabilities left by an individual upon his or her death. This includes any monies owed to the employee by the

employer (wages are the most obvious but these could, theoretically include interest stemming from a retirement program and

or life insurance policy which the company provides.

EHuman

Resource

Management

EstoppelEstoppel is a legal term that creates a bar to alleging or denying a fact because of one's own previous actions or words to the

contrary.

EHuman

Resource

Management

ethical climate The "feel of the organization" about the activities that have ethical content or those aspects of the work environment that

constitute ethical behavior. The ethical climate is the feel about whether we do things right; or the feel of whether we behave

the way we ought to behave.

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Management

European-Style

Option

A stock option contract that may be exercised only during a specified period of time just prior to its expiration. This is in

contrast to American-style options, which may be exercised at any time between the purchase date and expiration date.

EHuman

Resource

Management

evaluation Judging the worth, quality, or significance of people, ideas, or things.

EHuman

Resource

Management

Evergreen

Authorization

A term employed to describe a situation where shares are set aside to be granted in the future under an option which

represents a portion of shares that are outstanding for every year the plan exists. Shares that remain unused from a previous

year get carried forward to be used in a later evergreen plan. Typically, such plans remain in full effect until cancelled by the

board of directors.

EHuman

Resource

Management

Evergreen PlanA plan that has no specific date, upon which grants will no longer be permitted. Typically, a grant such as this remains in effect

until specifically canceled by the board of directors.

EHuman

Resource

Management

Evidence Of

InsurabilityThis is proof that an individual is an insurable risk.

EHuman

Resource

Management

Excess Benefit PlansExcess Benefit Plans are one form of non-qualified deferred compensation arrangements to supplement other retirement

benefits for highly compensated executives. These plans are initiated in order to attract retain and attract motivated executives.

They may also be used for early retirement, takeovers, and firing of top executives.

EHuman

Resource

Management

Excess Benefit

Transaction

A transaction in which a DISQUALIFIED PERSON receives an economic benefit from a tax-exempt organization that exceeds

the value of the benefit the disqualified person provided to the organization. In terms of compensation, this means it was

unreasonable compensation under Section 162.

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Management

Excess ContributionsExcess Contributions are those contributions that exceed the deductible limits. A contribution to a profit-sharing or stock bonus

plan is limited to 15 percent. The excessive amounts are subject to an excise tax of 10 percent.

EHuman

Resource

Management

Excess InterestAn interest amount, which is above the guaranteed amount, which an insurance company must pay, when interest rates

increase, on a settlement option.

EHuman

Resource

Management

Excess PlanSeveral definitions: 1) A plan providing benefits, only in excess of limits imposed on plans that are tax-qualified. (2) Also a plan

providing benefits to company executives who have limited 401(k) plans.

EHuman

Resource

Management

Exchange Program A program which permits the insured to exchange a policy with another without the requirement of proving insurability.

EHuman

Resource

Management

Exchange rateEconomically defined as the intersect of the labor demand and the labor supply functions in an external market. It constitutes

the wage rate that employers are willing to pay and labor is willing to accept. From a compensation viewpoint, the exchange

rate defines the criterion of external equity.

EHuman

Resource

Management

Excise Taxes

Excise taxes are a wide variety of taxes levied on employers for two main reasons. The first is as a penalty for failing to

perform a required action or purposely or accidentally doing something wrong. The second type of excise tax is like a license to

perform something. You pay for the privilege of having the right to do something. Most of these excise taxes have to do with

the administration of benefit programs or taxes.

EHuman

Resource

Management

Exclusion RatioA term used to refer to the taxable part of an annuity plan. May also be used to describe the ratio of an employee's cost basis

in relation to the employee's anticipated return.

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Management

Exclusion RiderAlso known as impairment rider, this is a supplement to a health policy excluding or limiting insurance for a particular health

defect.

EHuman

Resource

Management

ExclusionsThese are losses not covered by an insurance policy. In terms of Accidental death policies, exclusions would be causes of

death not deemed to be accidental. In terms of health insurance, this would be losses not insured (those that were pre-existing,

surgeries that are cosmetic in nature or injuries that are self inflicted.

EHuman

Resource

Management

Exclusive AgentsKnown also as captive agents, exclusive agents are those who work exclusively for one insurance company and who may not

represent another company.

EHuman

Resource

Management

Exclusive of Board,

Lodging, or Other

Facilities

Under FLSA, the phrase ‗‗exclusive of board, lodging, or other facilities‘‘ means ‗‗free and clear‘‘ or independent of any claimed

credit for non-cash items of value that an employer may provide to an employee. (Section 541.606)

EHuman

Resource

Management

Exclusive TerritoryThis is a territory no other agent may operate and offer insurance products. May be contrasted with nonexclusive territory and

overlapping territory.

EHuman

Resource

Management

Exculpatory StatuteIn community-property states, this is a law that permits an insurance company to pay proceeds of a life policy according to the

terms of the agreement without the risk of incurring double liability.

EHuman

Resource

Management

executing The ability to complete individual and organizational assigned tasks according to specified standards and within certain time

criteria or event criteria.

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EHuman

Resource

Management

ExecutiveIn relation to businesses, an executive is taken to be anyone who a sizeable amount of responsibility where the management

of a company is concerned.

EHuman

Resource

Management

Executive BenefitsProvided to a limited number of executives, this is a form of non-cash compensation that is over and above the benefit

packages given to the other employees. These may include but are not limited to company car and supplemental insurance.

EHuman

Resource

Management

Executive Officer Responsible for a significant business/company function. Usually an executive officer is involved in policy-making.

EHuman

Resource

Management

Exempt EmployeesEmployees who are not subject to (i.e., they are exempt from) FLSA minimum wage and overtime provisions. These

employees are typically paid on salary.

EHuman

Resource

Management

Exercise (Of A Share

Option Or Other

Executive-Plan

Feature)

When a share option holder (owner) actually takes possession of the proceeds of the shares or of the shares themselves, he

or she is said to have exercised their share option. In other words, the actual buying of shares under the terms of stock option

grant.

EHuman

Resource

Management

Exercise Period Time frame / the specific days during which stock option may be purchased by the holder of the option.

EHuman

Resource

Management

Exit InterviewAn interview between a member of staff of the organization that an employee is leaving to ascertain the reasons for the

employee leaving the organization. Should not be carried out by employee‘s immediate superior. Used for possible changes.

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EHuman

Resource

Management

Exoneration StatutesA statute the effect of which is to pardon an insurer if a claim of policy proceeds is made when the insurer has already made

payment to another party without knowing of other conflicting claims (e.g., the payment was made in good faith).

EHuman

Resource

Management

ExpatriateAlso known as an international assignee or international staff, this is an individual who has been assigned to a country other

than his or her home base for a period of time.

EHuman

Resource

Management

Expatriate PremiumThis term is used to describe any number of supplemental payments which is made to an international assignee / expatriate

employee in order to compensate for any hardship, education of dependent children in their mother tongue or other conditions

that may be specific to the location.

EHuman

Resource

Management

Expectancy TheoryThis is a theory that states that individuals make choices according to what they anticipate will give them the most payoffs.

When applied to salaries, it follows that employees must hold the belief that the greater the effort that they make, the better

their performance will be (the greater their results) and therefore the higher the salary they will command.

EHuman

Resource

Management

Expense Accounts

And Allowances

Expense Accounts are ordinarily a feature of perquisites for executives. Since executives create expenses as a part of their

jobs, they are allowed to keep an account, which allows them to be reimbursed periodically for these expenses.

EHuman

Resource

Management

Experience RatingThis rating system makes use of a group's premium and their claim experience to establish premium rates. Depending on the

previous year's claim experience the insured party's premium will go up or down. See blended rates and manual rates.

EHuman

Resource

Management

Experience Refund

Several definitions: 1) The part of an insurance premium, which is given back to, the policyowner who experiences better than

predicted claim experience. May also be known as an experience rating refund and or retroactive rate reduction. See dividend.

(2) The part of a reinsurance premium which is returned to the ceding company in a situation whereby the actual claim

experience is better than that which was predicted.

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EHuman

Resource

Management

Experience-Rated

ArrangementThis is an insurance policy whereby the premiums are set according to the insured's previous claim experience.

EHuman

Resource

Management

Experimental

Underwriting

As the name suggests, this is when an insurance company accepts to cover a risk on an experimental basis (risks which,

under normal circumstances, they would not insure against).

EHuman

Resource

Management

Expiration Date The date on which an option is nullified, if it is not exercised. The day that the option to exercise ceases.

EHuman

Resource

Management

Express Authority This is an authority specifically granted upon an agent. Compare with implied authority and or apparent authority.

EHuman

Resource

Management

Extended Spouse's

Allowance

Peculiar to Canada, this is an Old Age Security (OAS) benefit which is payable had been dependent on and was receiving a

'spouse's allowance', when their spouse dies. Such a person is entitled to receive this benefit until they either remarry or until

they attain the age of 65. See and compare with spouse's allowance.

EHuman

Resource

Management

Extended Term

Insurance Option

A non-forfeiture option providing for cash value of a policy to be applied as a net one time payment to purchase a term

insurance at the same price as the death policy which is being surrendered minus and loans outstanding. The insured party still

will have the same coverage but typically for a shorter time. See non-forfeiture options.

EHuman

Resource

Management

External EquityThe measure of a company's pay scales (pay levels or the going market rate) compared to the rate of other similar companies.

External equity indicates that a company's pay levels are comparable to the market rate.

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EHuman

Resource

Management

External Wage

StructureDefines the wide variety that exists in pay rates that a company faces in the different labor and occupation markets.

EHuman

Resource

Management

Extraordinary ItemsEither a gain or a loss stemming from an unusual event, which is non-recurring. An extraordinary item would typically be

recorded separately on a company's financial statement.

EHuman

Resource

Management

Extra-Percentage

Tables Method

A plan commonly used to rate substandard risks. Using this system, each substandard risk is charged a premium a specific

percentage above the standard rate. To be contrasted with the standard premium method.

EHuman

Resource

Management

Extrinsic rewards Work-related rewards that have value measurable in monetary terms, as opposed to intrinsic rewards, such as satisfaction in

a job well done.

FHuman

Resource

Management

Face Page

This is the first page of an insurance agreement. This page typically includes the name of the insured party, their age and the

name of the policyowner if it is different from the insured's name. This page also states the amount of the premiums, the

agreement number, date on which the parties entered into an agreement. Lastly, this page normally has the signatures of both

the president and the secretary of the company.

FHuman

Resource

Management

Face Validity When a technique clearly appears to do what it‘s intended to do.

FHuman

Resource

Management

Facility-Of-Payment

Clause

A provision of life insurance which allows the insurer to pay part of or all of the proceeds of the policy either to a blood relation

or the insured party or to anyone who has a valid claim. This clause permits the insurer to pay benefits on time when it is not

possible to pay benefits to the beneficiary who is identified in the insurance agreement.

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FHuman

Resource

Management

Factor comparison

method

A job evaluation method in which a series of rankings are performed to assess which jobs contain more of each specific

compensable factor than other jobs being evaluated The factor rankings of each job are assigned numerical values, weighted

and then added together to determine the total job score.

FHuman

Resource

Management

Factor TableUsed by underwriters to establish the net worth of an applicant by specifying what that the applicant's income should be

multiplied by in order to arrive at the maximum permissible insurance coverage.

FHuman

Resource

Management

Factor Weight The weight assigned, in job evaluation, to compensable factors indicating their relative importance.

FHuman

Resource

Management

Fair Credit Reporting

Act (FCRA)

A federal law meant to ensure that consumer-reporting agencies are fair in their reporting (especially where the consumer's

right to privacy is concerned. See consumer-reporting agency.

FHuman

Resource

Management

Fair Labor Standards

Act Of 1938 (FLSA)This is a federal law that governs, amongst other things, child labor law, minimum wage and record-keeping requirements.

FHuman

Resource

Management

Fair Market Value

(FMV)

The price of stock is typically measured as an average of the low and high market prices of a company's share of stock, on a

specific day and on a recognized stock exchange.

FHuman

Resource

Management

Family Benefit This is a life policy providing term coverage for spouses and children of the insured's.

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FHuman

Resource

Management

Family DeductibleRelieves a family from having to satisfy a deductible for each member of the family. The family deductible sets a single

deductible for the entire family unit.

FHuman

Resource

Management

Family Income

Insurance

Typically, this type of specialized individual insurance policy combines decreasing term with the whole life insurance. The

former provides income for a pre-established period for the insured's family and the latter portion is normally paid in a lump

sum when the insured party dies.

FHuman

Resource

Management

Family Insurance

PolicyThis type of insurance policy covers the entire family unit under the one policy.

FHuman

Resource

Management

Family LeavePaid or unpaid time off granted an employee for the purpose of caring for a family member who is seriously ill or who has a

serious medical condition. Also granted when a new baby is born or a child is adopted.

FHuman

Resource

Management

Fasb Statement No.

35

Issued by the Financial Accounting Standards Board (FASB) in 1985, the statement 35 deals with rules with which to measure

and report a defined pension plan's value in accounting reports issued by the benefit pension plan.

FHuman

Resource

Management

Fasb Statement No.

87

Statement 87 governs the ways in which an employer accounts for and reports the costs of pension benefits offered to its

employees. It requires that, for accounting purposes, employers use a cost method known as the projected unit credit method

in order to establish the net periodic cost of pension benefits offered to employees. Statement 87 further requires employers to

recognize a liability if the net periodic cost is higher than employer contributions to the plan and an asset if the net periodic cost

is lower.

FHuman

Resource

Management

Fasb Statement No.

88

Statement 88 determines accounting requirements for employers whose defined benefit pension plans have been limited and

or terminated, or who have experience other unusual events, (e.g., settlement of a pension obligation through a lump-sum

payment of benefits to a plan beneficiary.

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FHuman

Resource

Management

Fasb, Financial

Accounting

Standards Board

This Board published rules by which U.S. CPAs conducted their accounting. It replaced the Accounting Principals Board (APB)

in 1974.

FHuman

Resource

Management

Federal Insurance

Contributions Act

(FICA)

Established the payroll deduction of OASDI and Medicare taxes from employers and employees. Under Chapter 9 of the

Internal Revenue Code of 1939 and Subchapters A and B of Chapter 21 of the Internal Revenue Code of 1954, as such codes

have been and may from time to time be amended.

FHuman

Resource

Management

Federal Rule of

Evidence 702

Federal Rule of Evidence 702 was enacted by Congress to simplify and widen the admission of expert-witness testimony. It

was hoped that Rule 702 would clear up the inconsistencies by the Frye decision. This rule was intended to support and extend

Frye, not replace it. See DLC Course 11: Daubert Criteria in Expert Witness Testimony.

FHuman

Resource

Management

Federal

Unemployment Tax

Act

FUTA, as it is commonly known, imposes tax on employers in order to pay for the unemployment benefits system. The tax

represents the wages paid to employees.

FHuman

Resource

Management

Federally Qualified

HMO

This is a HMO, which fulfills Health Maintenance Organization Act of 1973 requirements. Federally qualified HMOs may

receive some grants and loans from the government and they may be used by employers to meet the provision to provide dual

choice.

FHuman

Resource

Management

Fee Basis

Under FLSA, administrative and professional employees may be paid on a fee basis. An employee will be considered to be

paid on a ‗‗fee basis‘‘ within the meaning of these regulations if the employee is paid an agreed upon sum for a single job

regardless of the time required for its completion. These payments resemble piecework payments with the important distinction

that generally a ‗‗fee‘‘ is paid for the kind of job that is unique rather than for a series of jobs repeated an indefinite number of

times and for which payment on an identical basis is made over and over again. Payments based on the number of hours or

days worked and not on the accomplishment of a given single task are not considered payments on a fee basis. (Section

541.605)

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FHuman

Resource

Management

Fee ScheduleA list, which represents the maximum benefits payable under a company medical contract for specified procedures. See also

relative value schedule. May also be known as schedule.

FHuman

Resource

Management

Fee Schedule BasisCompensation plan found in HMOs and PPOs whereby physicians are paid a pre-established amount for specific services that

they provide. See Capitation basis.

FHuman

Resource

Management

FeedbackThe outcome or state of a system, which may be utilized in the modification of system's operation. This term is usually used in

terms of compensation and as such, relates to the system whereby information is obtained regarding performance versus

compensation.

FHuman

Resource

Management

FICAThe Federal Insurance Contributions Act established the payroll deduction of OASDI and Medicare taxes from employers and

employees. Under Chapter 9 of the Internal Revenue Code of 1939 and Subchapters A and B of Chapter 21 of the Internal

Revenue Code of 1954, as such codes have been and may from time to time be amended.

FHuman

Resource

Management

FiduciariesA fiduciary is a person who has a position of trust with respect to any other person. In employee benefit plans, covered by

ERISA, there is a standard of conduct imposed upon such a person.

FHuman

Resource

Management

Field Allowance Compensation in form of a payment to an expatriate for additional costs and difficulties and working in different locations.

FHuman

Resource

Management

Field Force Insurer's field offices that house insurance agents.

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FHuman

Resource

Management

Field Office Local sales office.

FHuman

Resource

Management

Field Underwriter An underwriter who works out of a sales office.

FHuman

Resource

Management

Field Underwriting Underwriting of a prospective client that takes place out in the sales field or sales office.

FHuman

Resource

Management

Financial Accounting

Standards Board

A private entity created by the accounting profession to develop and promulgate financial accounting standards and practices.

Its membership is composed of top-level accounting professionals from business, government and education professions. It

derives its authority from official recognition by the Securities and Exchange Commission (SEC) and the American Institute of

Certified Public Accountants (AICPA) and from the general support of corporate and investment communities. While the

Securities and Exchange Commission (SEC) has the authority to regulate accounting standards, it nearly always defers to the

FASB.

FHuman

Resource

Management

Financial Accounting

Standards Board

Statement 87 (FAS

87)

Issued in the United States by the Financial Accounting Standards Board (FASB) in 1985, Statement 87 governs the ways in

which an employer accounts for and reports the costs of pension benefits offered to its employees. The Statement, titled

'Employers' A

FHuman

Resource

Management

Financial InstitutionAn institution that uses its funds chiefly to purchase financial assets (deposits, loans, securities) as opposed to tangible

property.

FHuman

Resource

Management

Financial

IntermediaryOften referred to as financial institutions, they act as the middleman between investors and firms raising funds.

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FHuman

Resource

Management

Financial PlanningEvaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions,

projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future

performance against that plan.

FHuman

Resource

Management

Financial Settlement A payment made under a contract.

FHuman

Resource

Management

Financial StatementsA financial statement (sometimes called an income and expense declaration) is a court paper, which requires a party to specify

her monthly income and expenses.

FHuman

Resource

Management

First Dollar Coverage Insurance that provides payment for the full loss up to the insured amount with no deductibles.

FHuman

Resource

Management

First In, First Out A method of valuing the cost of goods sold that uses the cost of the oldest items in inventory first.

FHuman

Resource

Management

First Year

CommissionCommission amounts paid for a policy's first year of premium, based on an annual amount.

FHuman

Resource

Management

Fiscal YearA 12-month period used by an organization as the accounting period. Can begin on any date. Is used as the time frame for

financial reporting, preparation of profit and loss statements, etc.

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FHuman

Resource

Management

Fiscal Year Budget

(FYB)

A 12-month operating budget for an organization that can begin on any date. This time frame is used for financial reporting,

preparation of profit and loss statements, etc.

FHuman

Resource

Management

five why's The practice of (Japanese) asking "why" five times when confronted with a problem. By the time the fifth why is answered, they

believe they have found the ultimate cause of the problem.

FHuman

Resource

Management

Fixed Benefit

Retirement Plan

A type of retirement plan providing benefits only on a fixed amount or at a fixed percentage # such as 1 percent of monthly

salary times the number of years of credited employment or 25 percent of the employee's average pay over the last few years

prior to retirement.

FHuman

Resource

Management

Fixed LiabilitiesAlso known as liabilities. These are often divided into current liabilities, which are due within a year of the date entered on the

balance sheet and non-current liabilities, which are due more than a year after the date on the balance sheet.

FHuman

Resource

Management

Fixed Period Option Life insurance settlement option in which the policy proceeds are paid out in fixed amounts.

FHuman

Resource

Management

Fixed Term

Employment

An employee and an employer may agree that the employment of the employee will end at the close of a specified date or

period or on the occurrence of a specified event or at the conclusion of a specified project.

FHuman

Resource

Management

Flat Extra Premium

MethodA method of rating a sub-standard life insurance risk when the extra risk is considered to be constant or temporary.

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FHuman

Resource

Management

flexibility The ability of a system to respond quickly, in terms of range and time, to external or internal changes.

FHuman

Resource

Management

Flexible Benefit Plan

A benefit program under Section 125 of the Internal Revenue Code that offers employees a choice between permissible

taxable benefits, including cash, and nontaxable health and welfare benefits such as life and health insurance, vacation pay,

retirement plans and child care. Although a common core of benefits may be required, the employee can determine how his or

her remaining benefit dollars are to be allocated for each type of benefit from the total amount promised by the employer.

Sometimes employee contributions may be made for additional coverage.

FHuman

Resource

Management

Flexible Benefits



contributions or a combination of both. Employees can purchase additional benefits, pay health insurance deductibles and


FHuman

Resource

Management

Flexible

Compensation

An approach to expatriate compensation. Allowances can be changed depending upon the needs and desires of the

expatriate.

FHuman

Resource

Management

Flexible Premium

AnnuityAn annuity under which the policyholder or contract holder may vary the amounts or timing of premium payments.

FHuman

Resource

Management

Flexible Spending

Accounts



contributions or a combination of both. Employees can purchase additional benefits, pay health insurance deductibles and


FHuman

Resource

Management

FlextimeA system of working according to which people work a set number of hours within a fixed period of time, but can vary the time

they start or finish work.

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FHuman

Resource

Management

FLSAThe Fair Labor Standards Act is a U.S. federal law that governs, amongst other things, child labor law, minimum wage and

record-keeping requirements.

FHuman

Resource

Management

follow-up Monitoring of job, task, or project progress to see that operations are performed on schedule.

FHuman

Resource

Management

Forced Ranking

Forced ranking systems direct managers to evaluate their employees' performance against other employees, rather than the

more common (and often grade inflated) measure of evaluating performance against pre-determined standards. The result of

such a process is often brutally blunt: The top 20 percent of performers are amply rewarded, and the bottom 10 percent are

shown the door.

FHuman

Resource

Management

Foreign CorporationA corporation, which was incorporated under the laws of a foreign country, here also called alien corporation. Also, a

corporation doing business in a state other than the one in which it is incorporated here also called out-of-state corporation.

FHuman

Resource

Management

Foreign Employees Employees that are employed in another country.

FHuman

Resource

Management

Foreign Insurer An insurer is a foreign company in any state other than the one in which it is incorporated.

FHuman

Resource

Management

ForeseeabilityA key issue in determining a person's liability. If a defendant could not reasonably have foreseen that someone might be hurt

by his or her actions, then there may be no liability.

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FHuman

Resource

Management

Forfeiture The loss or surrender of money, property, a right or privilege due to failure to perform.

FHuman

Resource

Management

Forfeiture Loss Loss of money or anything of value due to failure to perform, such as a deposit given to insure performance.

FHuman

Resource

Management

Form 10-KA company's annual audited report filed with the Securities and Exchange Commission, due within 90 days of the end of the

company's fiscal year.

FHuman

Resource

Management

Form Of PaymentAll payments must be by cash, certified check, cashiers or treasurer's check or by a United States postal, bank, express, or

telegraph money order.

FHuman

Resource

Management

Former Employee An individual who was once an employee of a particular company or organization. Termination may be voluntary or not.

FHuman

Resource

Management

Fractional PremiumIn insurance, a proportionate amount of the annual premium, that is, one-twelfth of the annual premium per month for each

month involved. A premium less than the mode premium, usually used when a change in premium date is desired and the

premium must be set to cover the tie period between the original payment date and the new one.

FHuman

Resource

Management

Fraternal Benefit

Society

Fraternal benefit societies are open to men, women and children to provide social, educational and community service

opportunities. In addition, fraternal benefit societies offer members life, accident and health insurance and/or annuities.

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FHuman

Resource

Management

Fraternal Insurance Insurance offered to a social organization for their members.

FHuman

Resource

Management

Fraudulent ClaimThe submission of a claim, which contains false information, is a crime. You may not claim any item, which you did not own or

did not ship. It is also illegal to deliberately falsify purchase prices, dates of purchase, quantities, or similar information.

FHuman

Resource

Management

Fraudulent

Misrepresentation

A false statement of fact, made by a person who does not believe the truth of the statement or is recklessly indifferent to

whether it is true or not, to another with the intention that the other person will rely on it.

FHuman

Resource

Management

Free Examination

PeriodA period of time where a policy or product can be reviewed and return it if satisfaction has not been met, with a full refund.

FHuman

Resource

Management

Freedom of

associationThe right to belong to a union. As protected by the Human Rights Act 1993.

FHuman

Resource

Management

FrequencySeveral definitions: 1) Number of times an average person or home is exposed to a media vehicle (or group of vehicles), within

a given time period. (2) The position of a television or radio station's broadcast signal within the electromagnetic spectrum.

FHuman

Resource

Management

Frequency

DistributionTable of statistical data arranged to indicate the number of occurrences of each value.

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FHuman

Resource

Management

Fringe Benefits Non-salary employee compensation.

FHuman

Resource

Management

Front Loaded PolicyWith this type of life insurance certificate, most of the expense charges take the form of deductions from each premium

payment and continue throughout the premium-payment period.

FHuman

Resource

Management

Front Pay

The amount of lost earnings accruing between the time a plaintiff wins a legal judgment and is reinstated to his/her job or takes

another job. Like back pay, front pay essentially is the equivalence of lost earnings. Neither Back Pay or Front Pay is subject to

the Civil Rights Act of 1991 $300,000 liability cap. Each can be awarded over and above any compensatory or punitive

damages.

FHuman

Resource

Management

Frozen Plans Plans that have not been terminated but have ceased accruing benefits and are no longer accepting new participants.

FHuman

Resource

Management

Fully Contributory A general term used with group health insurance plans in which the employee pays a portion of the premium.

FHuman

Resource

Management

Functional job

analysisThe preparation required for the construction of a job description. It is necessary to collect data on the job to be advertised.

FHuman

Resource

Management

Fund To finance or underwrite.

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FHuman

Resource

Management

Funding AgencyA financial institution or individual that provides for the accumulation or administration of the pension contributions that will be

used to pay pension benefits.

FHuman

Resource

Management

Funding Standard

Account

A pension plan funding approach under which a separate account is charged with certain liabilities and credited with certain

amounts. The funding standard is satisfied when there is no accumulated funding deficiency, that is, when the balance in the

account is zero.

FHuman

Resource

Management

FUTAThe federal government and the various states impose a tax on employers with respect to certain categories of employee

service. A few states also require employees to contribute to the cost of providing unemployment benefits.

FHuman

Resource

Management

FUTA TaxThe Federal Unemployment Tax Act (FUTA) levies an excise tax on employers to pay for the unemployment benefits system.

The tax is a percentage of the wages paid to employees. Contributions to state unemployment funds are generally a credit

against the FUTA tax.

FHuman

Resource

Management

Future ServiceFor pension benefit purposes, the period of time beginning with the current date and ending with the anticipated date of an

employee's retirement.

FHuman

Resource

Management

Future Value The value at some point in the future of a present amount of money.

GHuman

Resource

Management

Gainsharing / Gain-

Sharing

This type of variable pay ties bonuses or salary increases to increased productivity (vs. profit increases). This is performance-

based incentive pay.

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GHuman

Resource

Management

GatekeeperThe primary care provider responsible for managing medical treatment rendered to an enrollee of a health plan. Alternatively,

this term has been used to describe third party monitoring of care to avoid excessive costs by allowing only appropriate and

necessary care to be rendered.

GHuman

Resource

Management

GED General educational development, and/or general equivalency diploma.

GHuman

Resource

Management

Gender

Discrimination

Gender is one of the protected groups under the Civil Rights Act. Thus gender, in and of itself, may not be used in a whole

range of human resource decisions regarding employees. In addition, the Equal Pay Act prohibits paying men and women

differently for the same or substantially similar jobs, and Title IX prohibits discrimination by gender in educational institutions.

GHuman

Resource

Management

General AccountA margin account provided to a customer by a brokerage, in Federal Reserve Board terminology. Regulation T requires that all

transactions involving credit given to the customer must be made in a general account.

GHuman

Resource

Management

General Agency

Distribution SystemA means of distribution that uses general insurance agents rather than branch offices to sell life and health insurance.

GHuman

Resource

Management

General Agent One who is authorized by a principal to represent the principal in a specific range of matters.

GHuman

Resource

Management

General Asset PlanA type of self-funding arrangement in which benefit claims from nonqualified plans are paid from current operating revenues.

Supporting assets are commingled with the employer's other assets. Fiduciary standards and reporting and disclosure

requirements apply.

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GHuman

Resource

Management

Generally Accepted

Accounting Principles

(GAAP)

Accounting practices mandated by recognized rule-making authorities.

GHuman

Resource

Management

Geographic

differentials

Pay differences established for the same job based on variations in costs of living or costs of labor among two or more

geographical areas.

GHuman

Resource

Management

Geographic Salary

Differentials

The percent difference between pay levels for an occupation in two or more geographic areas. Due to the demand for and

supply of labor, an employee may be paid more or less depending on where she works. This makes setting branch-office

salaries complicated, as they must be adjusted for the local labor market pricing (and in some cases the local cost of living).

ERI's Geographic Assessor and Salary Assessor software aid in planning salaries for positions in multiple locations. See

www.erieri.com.

GHuman

Resource

Management

GI RiderGuaranteed Insurability Rider is an insurance policy in which the insurer is required to renew the policy for a specified amount

of time regardless of changes to the health of the insured. The agreement requires that premiums are paid on time and that

the insurer makes no changes except if a premium change is made for an entire class of policyholders.

GHuman

Resource

Management

Glass Ceiling

Analysis

Refers to the analysis of how well (or poorly) women and minorities are doing at moving upwards in organizations. A Glass

Ceiling Commission was authorized by law to study artificial barriers to the advancement of women and minorities in the

workforce and to recommend means of overcoming such barriers.

GHuman

Resource

Management

Goal Setting The process of setting and assigning a set of specific and attainable goals to be met by an individual, group or organization.

GHuman

Resource

Management

Golden Handcuffs Rewards and penalties designed to discourage key employees from leaving a company.

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GHuman

Resource

Management

Golden ParachutesA clause in an executive's employment contract specifying that he/she will receive large benefits in the event that the company

is acquired and the executive's employment is terminated. These benefits can take the form of severance pay, a bonus, stock

options, or a combination thereof.

GHuman

Resource

Management

Good faith bargainingA duty under Section 4 of the Employment Relations Act 2000 to conduct negotiations where two parties meet and confer at

reasonable times with open minds and the intention of reaching an agreement.

GHuman

Resource

Management

Good PracticesA document that is prepared during the formation of a corporation. It states the corporation's goals and objectives as well as

what the corporation can do and cannot do to fulfill its goals.

GHuman

Resource

Management

GoodwillReputation for a product or service standard. A company's value over and above the physical property and accounts

receivables.

GHuman

Resource

Management

Grace PeriodA specified period after a premium payment is due, in which the policyholder may make such payment, and during which the

protection of the policy continues.

GHuman

Resource

Management

Graded Premium


A form of modified life insurance that provides for annual increases in premiums for a constant face amount of insurance

during a defined preliminary period, with the purpose of making initial payments more affordable.

GHuman

Resource

Management

Graded VestingA vesting schedule under which an employee is partially vested, typically 25%, after a certain number of years of service, with

the vesting schedule increasing until full vesting is achieved.

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Grant Date The date that a stock option term begins and the option become effective.

GHuman

Resource

Management

Green Circle Rate An individual rate that is below the minimum of the established pay range for a specific job or pay grade.

GHuman

Resource

Management

Grievance A complaint brought by one party to an employment contract against another party.

GHuman

Resource

Management

Gross Income Total income produced by a property before any expenses are deducted.

GHuman

Resource

Management

Gross MarginWith regard to an adjustable rate mortgage, an amount expressed as percentage points, stated in the note which is added to

the current index value on the rate adjustment date to establish a new note rate.

GHuman

Resource

Management

Gross misconduct An act committed by any personnel likely to lead to Summary Dismissal. Examples may be:

GHuman

Resource

Management

Gross Premium The premium paid by the policyholder.

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Management

Group AnnuityA pension program underwritten and administered by an insurance company. Normally uses the unit benefit method of funding.

Plan participants are covered under one contract the employer pays premiums on their behalf.

GHuman

Resource

Management

Group Creditor Life

Insurance

Life insurance issued to the creditor on the lives of debtors to pay the amount of the indebtedness in the event of death. Used

frequently by lending and other financial institutions to eliminate problems of collection from a deceased's estate.

GHuman

Resource

Management

Group Deferred

Annuity

A funding instrument wherein the insurance company, for a stipulated fee for each participant's benefit, will guarantee the

purchase rates of the future annuity and will administer the plan.

GHuman

Resource

Management

Group dynamics The social manner in which people interact with each other within a group.

GHuman

Resource

Management

Group Incentive A material incentive provided to all members of a work group to reward the group's collective performance.

GHuman

Resource

Management

Group InsuranceAny insurance plan under which a number of employees and their dependents are insured under a single master policy, issued

to their employer or to an association, with individual certificates given to each insured individual. The most commonly written

lines are health life and accident.

GHuman

Resource

Management

Group Legal ServicesIt is a plan, which establishes a fund providing legal services for an employee or union, association or organization member as

a fringe benefit.

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Group Life Insurance

Group life insurance is part of an increasing number of workplace benefit packages. Most group life insurance policies offer

term life coverage, but individual states in the U.S. usually insist that companies allow employees to change their life insurance

policies from term to permanent when employees leave their jobs. The individuals then pay premiums to the insurer. Federal

requirements for group life insurance include: (1) The policy must provide a general death benefit. (2) The policy must cover a

"group of employees." (3) The policy must be carried directly or indirectly by the employer. (4) The amount of insurance must

be computed under a formula precluding individual selection.

GHuman

Resource

Management

Group Life Insureds In Canada, the persons who are insured by a group life insurance contract. Usually called 'insureds' in the United States.

GHuman

Resource

Management

Group Paid Up

Insurance

A combination life insurance plan under which each employee's annual contribution is used as a single premium to buy a unit

of paid-up insurance, while the employer's contribution is used to buy group term coverage. On termination of employment, the

employee may take paid-up insurance or receive a refund of contributions or the cash surrender value of the paid-up

insurance.

GHuman

Resource

Management

Group Permanent

Insurance

A group insurance plan in which the whole life policy purchased provides death benefits to the employee's survivors in the

event of premature death. Upon retirement, the cash value can be used to provide income to the employee.

GHuman

Resource

Management

Group Practice ModelAn HMO that contracts with a single multispecialty medical group to provide care to the HMO's membership. The group

practice may work exclusively with the HMO, or it may provide services to non-HMO patients as well. The HMO pays the

medical group a negotiated, per capita rate, which the group distributes among its physicians, usually on a salaried basis.

GHuman

Resource

Management

Group

RepresentativeAn individual that represents an insurance company in the capacity of sales.

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Group RRSP

(Registered

Retirement Savings

Plan)

A contractual arrangement registered under Section 146 of the Income Tax Act between an individual and an insurer, trust

company or corporation authorized to accept payments from an individual or his her spouse for the purpose of providing a

retirement income for that individual or his or her spouse by, upon maturation of the plan, purchase of a prescribed form of

annuity or transfer of the plan assets to a registered retirement income fund (RRIF). Subject to prescribed maximums, such

contributions made by a resident of Canada having earned income are deductible for income tax purposes.

GHuman

Resource

Management

Group Term Life

Insurance

A plan qualifying under Code Section 79 to provide employees with employer-paid life insurance coverage at little or no tax

cost.

GHuman

Resource

Management

Group Universal Life

Plan

A form of group life insurance that combines term protection for designated beneficiaries with an investment element for the

policyholder, which can be used to create nontaxable permanent insurance or to accumulate tax-deferred capital. Participation

is entirely voluntary and the employee pays all premiums.

GHuman

Resource

Management

GuaranteeThe assumption of responsibility for payment of a debt or performance of some obligation if the liable party fails to perform to

expectations.

GHuman

Resource

Management

Guaranteed Annual

Wage (GAW)A provision in a contract with an employer guaranteeing the employee a minimum income or work over a period of one year.

GHuman

Resource

Management

Guaranteed Income

Supplement(GIS)A nontaxable monthly benefit paid to lower-income OAS recipients on the basis of family income.

GHuman

Resource

Management

Guaranteed

Insurability Rider (GI)

A rider now offered on most life insurance policies whereby additional insurance may be purchased at specified future times

without a medical examination or other evidence of insurability. Rates are based on attained age at time of purchase.

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Guaranteed

Investment Contract

A deposit arrangement entered into with an insurance company, which guarantees both the principal and interest repayments.

It is a type of annuity contract, not a marketable security. The amount deposited can be a single sum or a stream of monies

deposited over a specified and limited period of time. Similarly, the deposit plus the guaranteed interest paid thereon can be

repaid in a single sum or installments. Expenses related to the contract arrangement can be charged against the guaranteed

interest payments or paid separately by the contract holder.

GHuman

Resource

Management

Guaranteed Issue

Insurance

The insurer will issue up to some stipulated amount of insurance for each individual employee without evidence of insurability.

The requirements are usually based on size of group and distribution by ages, and individual insurers decide on amounts.

GHuman

Resource

Management

Guaranteed

Renewable Policy

An insurance policy, which is guaranteed renewable provided premiums are paid. The policy conditions remain unchanged

although the insurers may review premium rates.

GHuman

Resource

Management

Guaranty Association

All 50 states, the District of Columbia, and Puerto Rico require licensed insurers to assume some of an insolvent insurance

company's policyholder liabilities. Guaranty associations are the mechanism by which solvent insurers bail out the

policyholders of companies that fails. The lines of insurance covered by guaranty associations and the maximum amount paid

on any claim vary considerably from one state to another. In most states, two different guaranty associations cover life and

health insurance lines and property/casualty lines.

GHuman

Resource

Management

Guide To Buying Life

Insurance

In Canada, a written statement developed by the Canadian Life and Health Insurance Association (CLHIA). The guide

describes the types of life insurance available, so that prospects for life insurance can compare the advantages and

disadvantages of each type of policy.

GHuman

Resource

Management

Guidelines Governing

Group Accident And

Sickness Insurance

In Canada, Superintendents' Guidelines that regulate several aspects of group health insurance contracts, including the types

of groups to which a group health insurance contract may be issued and the particulars that must be included in the certificate

issued to each person insured by the contract.

GHuman

Resource

Management

Guidelines Governing

Group Life Insurance

In Canada, a set of guidelines issued by the Canadian Council of Insurance Regulators. The guidelines specify, among other

things, the types of groups eligible for group life insurance.

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Hardship AllowanceA payment made in recognition of 'different' conditions prevailing at the host location. Locations are assessed for their degree

of hardship and the criteria may include isolation, special health risks, extremes of climate and political instability, for example.

The allowance is usually expressed as percentage of base pay.

HHuman

Resource

Management

Hardship

Distributions

A withdrawal of an employee's contributions to a 401(k) plan prior to retirement at age 55 or attainment of age 591/2. A

hardship withdrawal may be made only in cases of financial emergency provided there are no other sources available to meet

the need the withdrawal is taxable as an early distribution and subject to a 10% excise tax.

HHuman

Resource

Management

Hawthorne EffectA term produced as a result of an experiment conducted by Elton Mayo whereby he concluded that expressing concern for

employees and treating them in a manner which fulfills their basic human needs and wants will ultimately result in better

performance.

HHuman

Resource

Management

Hazard Danger or obstacle, the existence of which is sometimes tied to the reward system.

HHuman

Resource

Management

Hazardous Duty PayWork, which exposes the employee to a considerably greater risk than normal, working conditions. Pay is above normal rate

tables due to the risk associated with each position and risks.

HHuman

Resource

Management

Head HunterA colloquial term for recruiters, employment agencies or executive search firms that broker human resources. Like real estate,

stock brokers and sports agents, headhunters are in the middle of an employment sales transaction: they solicit customers

(companies with job openings willing to pay a fee) and they seek talent (people with specific skills).

HHuman

Resource

Management

Headquarters

CountryThe country where the center of operations or administration of a particular employer.

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Health Care BenefitsIn health insurance, policy benefits payable as a result of disability from covered sickness or accident. Sickness coverage is

rarely written separately, unless the insured also carries an amount of accident insurance with the same company.

HHuman

Resource

Management

Health Care

Financing

Administration

(HCFA)

The agency of the Department of Health and Human Services that, among other things, administers the Medicare program and

works with the states to administer their Medicaid programs.

HHuman

Resource

Management

Health Care

Reimbursement

Account

Allows employees to set aside pretax funds for eligible health care benefits such as physical exams, vision care and dental

care, including deductibles and co-payments. See also Flexible Spending Accounts (FSAs).

HHuman

Resource

Management

Health InsuranceProtection that provides payment of benefits for covered sickness or injury. Included under this heading are various types of

insurance, such as accident insurance, disability income insurance, medical expense insurance, and accidental death and

dismemberment insurance.

HHuman

Resource

Management

Health Insurance

Portability And

Accountability Act Of

1996 (HIPAA)

Federal legislation that improves access to health insurance when changing jobs by restricting certain preexisting condition

limitations, and guarantees availability and renew ability of health insurance coverage for all employers regardless of claims

experience or business size. The law also increases the health insurance deduction for the self-employed provides tax

incentives for purchase of long-term care insurance, and establishes medical saving accounts (MSAs), which provide for tax-

deductible contributions to accounts to cover medical expenses.

HHuman

Resource

Management

Health Maintenance

Act (HMA)

The Health Maintenance Act was established to encourage the development of HMOs. It requires employers subject to

minimum wage standards who employ 25 or more employees, as well as states and their political subdivisions, to include in a

health benefit plan offered to employees the option of membership in a qualified health maintenance organization (HMO) if an

HMO had made a request for such inclusion.

HHuman

Resource

Management

Health Maintenance

Organization (HMO)

A prepaid medical group practice plan that provides a comprehensive predetermined medical care benefit package. The

government, medical schools, hospitals, employers, labor unions, consumer groups, insurance companies, can sponsor the

HMO and hospital-medical plans. HMOs are both insurers and providers of health care.

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Management

Heirs Of ERISA PlansThe term is broadly applied to anyone who receives property from a deceased person's estate. The heir of the ERISA plan is

deemed to be the beneficiary of the employee's retirement plan.

HHuman

Resource

Management

Hierarchy of needsA psychology theory ascribed to Abraham H. Maslow in which he proposed that people will constantly seek to have their basic

needs (sleep, food, water, shelter, etc.) fulfilled and that such needs ultimately determine behavior

HHuman

Resource

Management

Highly Compensated

Employees

Either a 5% owner or a person who earned more than $80,000 during the current or preceding year. Repeals rule treating

highest paid officer as an HCE, the top-100 rule, and family aggregation rules in both the HCE definition and the $150,000

compensation cap. Discrimination in favor of this group is prohibited.

HHuman

Resource

Management

Highly Structured

Questionnaires

An insurance policy in which the condition of the policy and the application constitute the agreement, in its entirety, between the

policy owner and the insurer. Contrast with open contract.

HHuman

Resource

Management

Hiring BonusAn extra sum of money provided at time of hire to entice an applicant to accept a job offer or to make up for compensation

forfeited at the previous company.

HHuman

Resource

Management

Hiring rate As a matter of wage policy, the beginning rate at which people typically are hired into a job.

HHuman

Resource

Management

History Statement A physician's report on a particular health condition.

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Management

Hold Harmless

Release

A statement indicating that the individual will reimburse the insurance company if the claim is ever challenged and deemed to

be fraudulent.

HHuman

Resource

Management

HolidaysDays established by law or custom for which workers receive pay while absent from work. Law establishes statutory holidays.

When the customary day tolls on a weekend a moveable holiday may be substituted for it on another day.

HHuman

Resource

Management

Home Country The expatriate's normal country of employment.

HHuman

Resource

Management

Home Health CareSkilled and semi-skilled part-time care received at home. May include nursing care, physical therapy, speech therapy and/or

such custodial services as cooking, cleaning and washing.

HHuman

Resource

Management

Home Leave Company funded return airfares, which allow an expatriate to return to his home country for holiday/vacation purposes.

HHuman

Resource

Management

Home Sale ProtectionThis is a feature provided for expatriates that are selling their home for a foreign assignment. It will pay all the costs associated

for selling a home and relocation, except for capital gains.

HHuman

Resource

Management

honor A state of being or state of character, that people possess by living up to the complex set of all the values that make up the

public moral code. Honor includes: integrity, courage, loyalty, respect, selfless-service, and duty. Honor demands adherence to

a public moral code, not protection of a reputation.

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Management

hoshin planning A Japanese strategic panning process in which a company develops up to four vision statements that indicate where the

company should be in the next five years. Goals and plans are developed based on the vision statements. Audits are

conducted periodically to monitor progress.

HHuman

Resource

Management

Hospital Confinement

Insurance

A form of health insurance that provides a stipulated daily, weekly or monthly indemnity during hospital confinement. The

indemnity is payable on an unallocated basis without regard to the actual expense of hospital confinement.

HHuman

Resource

Management

Hospital Expense

InsuranceA health insurance policy that covers daily hospital room and board charges and some miscellaneous hospital expenses.

HHuman

Resource

Management

Hospital Indemnity

Insurance

A form of health insurance that provides a stipulated daily, weekly or monthly indemnity during hospital confinement. The

indemnity is payable on an unallocated basis without regard to the actual expense of hospital confinement.

HHuman

Resource

Management

Hospital Surgical

Expense InsuranceMedical expense health insurance that combines basic hospital coverage and basic surgical coverage into one policy.

HHuman

Resource

Management

Hospitals

A legally constituted institution having organized facilities for the care and treatment of sick and injured persons on a resident

or inpatient basis, including facilities for diagnosis and surgery under the supervision of a staff of one or more licensed

physicians and which provides 24-hour nursing services by a registered nurse on duty or call. It does not mean convalescent,

nursing, rest or extended care facilities or a facility operated exclusively for the treatment of the aged, drug addict or alcoholic,

whether or not such facilities are operated as a separate institution by a hospital.

HHuman

Resource

Management

Host CountryA nation in which representatives or organizations of another state are present because of government invitation and/or

international agreement.

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Management

Hour Of ServiceFor purposes of retirement plans, an hour for which an employee is directly or indirectly paid by the employer for the

performance of duties. An hour of overtime is still counted as only an hour of service, even though the pay for overtime may be

higher. Hours during a leave of absence or a vacation with pay are counted.

HHuman

Resource

Management

Hourly rateThe rate of pay per hour for a job being performed. An ―hourly‖ worker may be assigned to various rated jobs during any pay

period and is paid the ―rate‖ applicable to each job while working on it.

HHuman

Resource

Management

Hours Of Work Standard hours worked in a year is 2,080 (52 weeks x 40 hours per week).

HHuman

Resource

Management

Housing AllowanceAn amount paid by the company, either to the expatriate or direct to the property landlord, to enable the expatriate to rent or

lease housing in the host country.

HHuman

Resource

Management

Housing NormThe portion of the base salary typically spent in the home country on housing. The norm may vary depending on family status

and salary level.

HHuman

Resource

Management

HR AuditA method by which human resources effectiveness can be assessed. Can be carried out internally or HR audit systems are

available.

HHuman

Resource

Management

HRM

Human Resource Management (HRM) is both an academic theory and a business practice. It is based on the notion that

employees are firstly human, and secondly should NOT be treated as a basic business resource. HRM is also seen as an

understanding of the human aspect of a company and its strategic importance. HRM is seen as moving on from a simple

"personnel" approach (or was supposed to) because it is preventative of potential problems, and secondly it should be a major

aspect of the company philosophy, in which all managers and employees are champions of HRM-based policies and

philosophy.

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Resource

Management

HTMLAn acronym for Hypertext Markup Language, HTML is the computer language used to create hypertext documents. HTML

uses a finite list of tags that describe the general structure of various kinds of documents linked together on the World Wide

Web.

HHuman

Resource

Management

Human Capital The collective knowledge, skills and abilities of an organization‘s employees.

HHuman

Resource

Management

human nature The common qualities of all human beings.

HHuman

Resource

Management

Human ResourcesWilliam R. Tracey, in The Human Resources Glossary defines Human Resources as: ―The people that staff and operate an

organization … as contrasted with the financial and material resources of an organization. The organizational function that

deals with the people ...‖

HHuman

Resource

Management

Hurdle RateThe required return in capital budgeting. For example, if a project has an expected rate of return higher than the hurdle rate,

the project may be accepted.

HHuman

Resource

Management

Hypothetical TaxThe approximate amount of tax, calculated on home country base salary and bonus, where applicable, that the expatriate

would have paid if he/she had remained in the home country.

IHuman

Resource

Management

IBNR (Incurred But

Not Reported)

Claims that have been incurred but have not been reported to the insurer as of some specific date. Often a disputed figure

since carriers must estimate this liability for accounting purposes based on their experience with claims lags.

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Management

Identifying The

CustomerUnderstanding who the prospect is and the cycle of the sales process.

IHuman

Resource

Management

Illness PerilsA systematic classification method to classify the type and degree of a peril, for a specific industry, to a specific occupation. An

insurance company does the system of classification.

IHuman

Resource

Management

Immediate AnnuityAn annuity under which income payments begin one annuity period (e.g., one month or one year) after the annuity is

purchased.

IHuman

Resource

Management

Immediate

Participation

Guarantee Contract

(IPG)

A group insurance contract under which the employer's unallocated account is credited with its share of actual investment

income for the year. There is generally no guarantee of principal or a minimum rate of interest. Annuity payments are charged

directly against the account as they are paid.

IHuman

Resource

Management

Immigration

Prevailing Wage

Rates

A special set of definitions exist for determining the competitive rate of pay that should be paid to immigrants who hold

temporary work permits in the United States. These rules are spelled out in General Administrative Letter 2-98.

IHuman

Resource

Management

Impairment The amount by which stated capital is reduced by distributions and losses.

IHuman

Resource

Management

Impairment RiderA rider attached to a health insurance contract that waives the insurance company's liability for all future claims on a pre-

existing condition.

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Management

Implied AuthorityAuthority that, while not specifically granted to the agent in the agency agreement, the agent can assume he or she has

through common sense. Authority that is apparently necessary for an agent's ability to carry out day-to-day or routine

responsibilities.

IHuman

Resource

Management

ImproshareCost-saving group incentive plan in which a standard cost of production is established and the employees share in the cash

savings of production costs under that amount. Improshare stands for improved productivity through sharing.

IHuman

Resource

Management

improving A focus on sustaining and renewing the development of individuals and the organization (with a time horizon from months to

decades) that requires a need for experimentation and innovation with results that are difficult to quantify. Usually it entails long-

term, complex outcomes.

IHuman

Resource

Management

Incentive (pay plans)Pay plans designed to reward the accomplishment of specific results. Awards are usually tied to expected results identified at

the beginning of the performance cycle. The plans can be individual, group, companywide, or a combination of any. Incentive

plans are ―forward‖ looking; bonus plans look ―backward.‖

IHuman

Resource

Management

Incentive

Compensation

Rewarding the performance of an individual in an institution with added compensation, typically in the form of bonuses or

percentage increments above the base salary.

IHuman

Resource

Management

Incentive pay Additional compensation used to motivate and to reward employees for exceeding performance or productivity goals.

IHuman

Resource

Management

Incentive Stock

Option (ISO)Gives an employee a right to purchase company stock usually at a bargain price.

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Management

Incident Of

Ownership

Rights that will result in the inclusion of life insurance policy proceeds in the policyholder's estate for federal estate tax

purposes.

IHuman

Resource

Management

Income Protection

Insurance Policy

A disability income policy, which specifies that an insured be disabled if he or she suffers an income loss caused by a disability,

therefore qualifying him or her for benefits under the policy.

IHuman

Resource

Management

Income Replacement

Benefit

A residual or partial disability benefit that is to be paid upon satisfaction of the company's elimination period, and the employee

experiences another loss of earnings due to a previous partial or total disability.

IHuman

Resource

Management

Income Replacement

RatioThe amount of gross income that is replaced by the retirement plan.

IHuman

Resource

Management

Income StatementA detailed summary of the income and expenses of a business over a period of time (usually quarterly, semiannually or


IHuman

Resource

Management

Incontestable Clause A clause that provides that the insurer may not contest the validity of the contract after it has been in force for a period of years.

IHuman

Resource

Management

Increasing Term

Insurance

Term life insurance coverage that increases in face value each year (or certain period) from the date of policy issue to the date

of expiration.

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Management

Incumbent Holding an indicated position, role, office, etc., currently.

IHuman

Resource

Management

Indemnification The compensation to the victim of a loss, in whole or in part, by payment, repair, or replacement.

IHuman

Resource

Management

Indemnity A benefit paid by an insurer for a loss insured under a policy.

IHuman

Resource

Management

Independent

contractorA person who works for him/herself but has a contract for services with another person/organization.

IHuman

Resource

Management

Independent Investor

Test

This test considers the return on investment indicated by the increase in the value of a corporation‘s stock along with dividends

paid during the time period in question. It looks at the company‘s performance throughout the year to determine if the

compensation to key employees is reasonable. Basically, an ―independent‖ investor should be happy with the return on his/her

investment and not object to the compensation paid to key employees. The rate of return must be high enough to warrant their

pay.

IHuman

Resource

Management

Independent Life

Brokers

An insurance solicitor, licensed by the state, who places business with a variety of insurance companies and who represents

the buyers of insurance rather than the companies even though he or she is paid commissions by the companies.

IHuman

Resource

Management

Independent

Physicians

Association (IPA)

A type of managed care organization composed of a group of independent physicians who have formed an association as a

separate legal entity for contracting purposes. IPA physician providers retain their individual practices, work in separate offices,

continue to see their non-managed care patients and have the option to contract directly with managed care plans.

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Management

Independent Property

/ Casualty Broker

A Broker is any person who, on behalf of the insured, for compensation as an independent contractor, for commission, or fee,

and not being an agent of the insurer, solicits, negotiates, or procures insurance or reinsurance or the renewal or continuance

thereof, or in any manner aids therein, for insureds or prospective insureds other than him.

IHuman

Resource

Management

Independent Variable A variable in a functional relation whose value determines the value or values of other variables, as x in the relation y = 3x2.

IHuman

Resource

Management

Indeterminate

Premium Life

Insurance

A type of nonparticipating whole life insurance that allows premium rate modifications throughout the life of the policy and

guarantees that the premium rate will never exceed a stated maximum rate.

IHuman

Resource

Management

IndexationModifying contracts so that their dollar terms adjust to the inflation rate as measured in an index, such as the consumer price

index.

IHuman

Resource

Management

Indexed OptionsAn option based on the market value of a particular group of stocks. Unlike stock options, index options--when exercised--are

settled in cash.

IHuman

Resource

Management

Indexing

A statistical model expressed in terms of percentages of a base year or years that serves as a reference in judging investment

performance. The index most often used for stock market performance is the Standard & Poor's 500 Index, which measures

the average performance of 500 widely held common stocks. Other frequently used indexes are the Dow Jones Industrial

Average, the NASDAQ and the Russell 2000, used for smaller company stocks, the Toronto Stock Exchange 300 Composite

Index (TSE 300), used in Canada, and the Morgan Stanley Capital International Europe, Australia, Far East Index (EAFE),

which is used as a benchmark for foreign company stocks.

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Management

Indirect Labor Workforce not directly engaged in the manufacture of a product line.

IHuman

Resource

Management

Indirect pay: All forms of nondirect (i.e., noncash) compensation made to employees in exchange for their contribution to an organization.

IHuman

Resource

Management

Individual Account

Plan

A defined contribution plan or profit-sharing plan that provides an individual account for each participant, allows participants to

choose, from a broad range of investment options, how their accounts will be invested, and whose benefits are based solely on

the amount contributed to the participant's account, including income, expenses, gains and losses. Defined contribution

retirement plans such, as 401(k) plans are examples of individual account plans.

IHuman

Resource

Management

Individual Contract

Pension Plan

A type of pension plan, frequently used for small groups, administered by trustees who are authorized to purchase individual

level premium policies or annuity contracts for each member of the plan. The polices usually provide both life insurance and

retirement benefits.

IHuman

Resource

Management

Individual

employment

agreement

The legal relationship between an employee and employer. See Part 6 of the Employment Relations Act 2000

IHuman

Resource

Management

Individual InsuranceAn individual life or health insurance policy purchased on an individual basis (as distinct from group and blanket insurance.)

Sometimes called personal insurance.

IHuman

Resource

Management

Individual Pay Rate A pay level assigned to an individual or to a particular position.

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Resource

Management

Individual Practice

Association

A type of managed care organization composed of a group of independent physicians who have formed an association as a

separate legal entity for contracting purposes. IPA physician providers retain their individual practices, work in separate offices,

continue to see their nonmanaged care patients and have the option to contract directly with managed care plans.

IHuman

Resource

Management

Individual Retirement

Account

Individuals, whether they are covered by a pension or not, are now permitted to save money on a tax-deferred basis in a

qualified IRA plan. Although money can be withdrawn, a 10% penalty has been placed on those assets withdrawn prior to the

individual turning 59 1/2, in addition to the normal taxes, which must be paid upon withdrawal. An individual can set up his own

plan with a bank, insurance company, brokerage house or mutual fund. A company can also deduct an agreed-upon amount

from employees' paychecks and send it along to a designated agent, or set up its own plan where managers are selected to

manage the assets.

IHuman

Resource

Management

Individual Retirement

Account (IRA)

Individuals, whether they are covered by a pension or not, are now permitted to save money on a tax-deferred basis in a

qualified IRA plan. Although money can be withdrawn, a 10% penalty has been placed on those assets withdrawn prior to the

individual turning 59 1/2, in addition to the normal taxes, which must be paid upon withdrawal. An individual can set up his own

plan with a bank, insurance company, brokerage house or mutual fund. A company can also deduct an agreed-upon amount

from employees' paychecks and send it along to a designated agent, or set up its own plan where managers are selected to

manage the assets.

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Management

Induction The process of introducing a new employee into the organization.

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Management

Industrial Insurance Life insurance issued in small amounts, usually less than $1,000, with premiums payable on a weekly or monthly basis.

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Industrial relations The study of theories and practices in the workplace relationship.

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Industry Wage

SurveysSurveys conducted and collected by a variety of sources to provide wage information for a wide variety of industries.

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Management

Inferential StatisticsThat branch of statistics dealing with procedures used to make inferences about a population from information contained in a

sample.

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Management

Inflation

A phase of the business cycle characterized by abnormally high prices, a decrease in the purchasing power of money, and

spiraling costs and wage rates. Inflation may occur when purchasing power is in excess of goods and services for sale, and/or

buyers stampede to convert money into commodities or when production costs and prices advance to consecutively higher

levels.

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Management

influencing The key feature of leadership, performed through communicating, decision making, and motivating.

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Management

Initial Deductible

Several definitions: 1) Amount of expenses which the insured party must pay before receiving any benefits from the insurance

company. (2) An item or expense which is taken away from an individual's gross income in order to reduce the amount of

taxable income (e.g. mortgage interest, state taxes, business expenses which are not reimbursed and charitable

contributions). See also calendar year deductible, corridor deductible, family deductible, integrated deductible and per cause

deductible.

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Management

Initial PremiumIn life and health insurance, the first premium, generally payable with the application or upon delivery of the policy. In group

insurance, especially health, an amount paid at the inception of an insurance contract that permits adjustments to be made

based upon future experience.

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Initial Public Offering The original sale of a company's securities to the public.

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Initial ReserveIn life insurance, the reserve amount determined at the beginning of the policy year. It equals the preceding year's terminal

reserve, plus the annual net premium.

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Management

Inside Build Up

In terms of life insurance policy, this is the amount of money, before adjustments are made for factors such as policy loans or

late premiums, that the policy owner will receive if the policy owner allows the policy to lapse or cancels it and surrenders the

policy to the insurance company. Cash values are a feature of most types of permanent life insurance. Compare to cash

surrender value. Also known as inside build-up and policy owner's equity.

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Management

Inside Director A member of a company's board of directors who is also an employee of the company.

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Management

Inside Payroll Costs Payroll costs that are not separated out.

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Management

InsiderA stockholder who owns 10% or more of a company, a member of the board of directors or an elected officer of a corporation,

or anyone else who possesses information that is not publicly known about the company, but which is important in valuing its

stock. Securities and Exchange Commission (SEC) regulations place restrictions on stock purchases and sales by insiders.

IHuman

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Management

InsidersSection 16 of the SEC regulations identifies 'insiders' as those precluded from profiting, unfairly from the sale and or purchase

of company stock.

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Management

Insolvency ClauseIn reinsurance, a clause that holds the reinsurer liable for its share of loss assumed under the treaty, even though the primary

insurer is insolvent.

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Inspection ReceiptIn life and health insurance, a receipt obtained from an applicant when a policy (upon which the first premium has not been

paid) is left with him or her for further inspection. It states that the insurance is not in effect and that the policy has been

delivered for inspection only.

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Management

Installation The act of installing or condition of being installed.

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Management

Installment Certificate A certificate given to the beneficiary of an insurance policy stating the benefit payment information.

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Management

Installment Refund

Option

An insurance option that states if any proceeds from a policy remain after the beneficiary's death, they will be paid to the

contingent payee in a series of installments.

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Management

Insurability

Conditional Premium

Receipt

An insurance company offer that provides for insuring an applicant if he/she were to die before their application and premium

reached the Home office.

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Management

Insurability ProvisionAn insurance provision stating that the policy will not become effective unless the insured is still considered insurable at the

time of delivery.

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Management

Insurability Statement A statement ascertaining if there have been changes in insurability between the time of application and policy issue.

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Insurability Type

Temporary Insurance

Agreement

An agreement that provides temporary insurance for a short period of time, such as during the period in which regular

insurance is being written.

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Management

Insurable InterestA person's or party's interest--financial or emotional--in the continuing life of an individual, a person or party must have an

insurable interest in the life of a proposed insured in order to purchase an insurance policy on the proposed insured's life.

IHuman

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Management

InsuranceA means of providing or purchasing protection against some of the economic consequences of loss. Risk of loss is transferred

to a third party in exchange for a 'consideration' or premium. This exchange creates an insurance contract.

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Management

Insurance ActThis Act, except as provided, applies to every insurer that carries on any business of insurance in British Columbia and to

every contract of insurance made or deemed made in British Columbia.

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Management

Insurance Agent A sales representative of an insurance company.

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Management

Insurance CoverageGenerally refers to the amount of protection available and the kind of loss which would be paid for under an insurance contract

with an insurer.

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Management

Insurance NetworkAn HMO model that contracts with multiple physician groups to provide services to HMO members, may involve large single

and multispecialty groups.

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Insurance Regulatory

Information System

(IRIS)

Formerly known as Early Warning System or Early Warning Tests, financial ratio and performance criteria designed by the

National Association of Insurance Commissioners to identify insurance companies, which may need close surveillance by state

insurance departments.

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Management

Insured PlanA pension plan in which the benefits are at least partially insured by an insurance company. Such plans provide a death benefit

to beneficiaries if the employee dies before retirement.

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Management

Insurer The insurance company or party that provides the insurance policy.

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Management

Insurer Administered

Organization

Insurance Plan

A group insurance plan in which the insurer handles all administrative work.

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Management

Intangible rewards Non-monetary re-enforcers such as praise given to an employee in recognition of a job well done, or a particular achievement.

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Management

Integrated Deductible A deductible that can be satisfied by payments in another portion of the plan.

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Management

Integrated Dental

PlanA major medical plan that has a dental plan as part of their features.

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Integrated Pension

PlanA pension plan that is integrated with Social Security retirement benefits.

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integrity

A moral virtue that encompasses the sum total of a person's set of values and moral code. A breach of any of these values will

damage the integrity of the individual. Integrity, comes from the same Latin root (integritas) as the word "integer," refers to a

notion of completeness, wholeness, and uniqueness. Integrity also entails the consistent adherence of action to one's personal

moral beliefs.

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Management

Intensive Care Units The specialized center in a hospital where intensive care is provided.

IHuman

Resource

Management

InterceptThe x-intercept, or y-intercept, or z-intercept, etc., a point where a curve crosses the x-axis, or crosses the y-axis, or crosses

the z-axis, etc. EX. A linear equation when graphed has at most one x-intercept.

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Management

Interest Adjusted

Cost

In life insurance, a method of comparing costs of similar policies by using an index that takes into account the time value of

money due at different times through interest adjustments to the annual premiums, dividends and cash value increases at an

assumed interest rate.

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Management

Interest Option

In life insurance, a settlement option under which all or part of the proceeds of a policy are left with the insurance company for

a definite period at a guaranteed minimum rate of interest. The principal remains with the company for a specified period of

time. Interest may be paid (usually subject to certain minimums) annually, semiannually, quarterly or monthly # or, in some

cases, may be added to the proceeds.

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Management

Interest Rate That percentage of a principal sum earned from investment or charged upon a loan.

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Internal Equity Refers to the pay relationships among jobs.

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Management

Internal Revenue

Code (IRC)

The federal agency responsible for administering and enforcing the Treasury Department's revenue laws, through the

assessment and collection of taxes, determination of pension plan qualification, and related activities. See also 1099, 401(k)

plan, amended return, audit, backup withholding, deficiency, determination letter, imputed interest, itemized deduction, over-55

home sale exemption, revenue ruling, standard mileage rate, wash sale rule.

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Management

InternetShort for Internet work. A network of networks, a group of networks interconnected via routers. Contrast with The Internet (with

a capital I), the world's largest Internet.

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Management

InterpleaderThe procedure when two parties are involved in a lawsuit over the right to collect a debt from a third party, who admits the

money is owed but does not know which person to pay. The debtor deposits the funds with the court ('interpleads'), asks the

court to dismiss him/her/it from the lawsuit and lets the claimants fight over it in court.

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Management

Interquartile Range Statistics. The range including the central 50% of the observations in a data set.

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Management

Interview

There are screening interviews and hiring or selection interviews. Screening interviews qualify a candidate before he meets

with a hiring authority for possible selection. Hiring interviews allow the employer to assess the fit of the candidate. The

candidate also interviews the employer for job suitability. Most of these interviews take place in an office setting one-on-one or

in a small group.

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Management

Intrinsic MotivationAn incentive that originates from the behavior itself rather than from an external reward or reinforcement. Thus, intrinsically

motivated behavior.

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Intrinsic rewardsRewards that are associated with the job itself, such as the opportunity to perform meaningful work, complete cycles of work,

see finished products, experience variety, and receive feedback on work results.

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Management

Invention,

imagination,

originality, or talent

Distinguishes from work that primarily depends on intelligence, diligence, and accuracy.

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Management

Investigative

Consumer Report

A special type of credit report, which contains more detail than a routine credit report. For example, it includes information

regarding a consumer's character, general reputation, and personal characteristics.

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Management

Investment

Companies

A company or trust managed by investment professionals that invests its capital in other companies for purposes of

diversification, the two principal types of which are the closed-end and open-end or mutual fund. Closed-end funds have a fixed

capitalization, and are usually listed and traded on the New York Stock Exchange like any other security, and may sell at a

premium or discount to net asset value. Open-end funds whose shares are not listed stand ready to sell new shares

continuously to investors and to redeem them when called upon to do so.

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Management

Investment ManagersLong-term, risk-return targets developed principally from careful consideration of plan sponsor factors, investment factors and

a forecast of the future. Critical in the adoption of investment objectives is the asset allocation decision.

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Management

Investment Sensitive

Insurance

A form of life insurance (also called Universal Life II or flexible life) offering a guaranteed death benefit that combines the

flexible premium features of universal life with the investment component of variable life.

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Management

Investment Year

Method (IYM)

Any dividend calculation method that recognizes differences in earned interest rates depending upon the year in which the

investment is made.

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Involuntary Plan

TerminationThe termination of a pension plan by a party other than the plan sponsor, generally a governmental organization.

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Management

Irrevocable

Beneficiary

An unalterable beneficiary. The owner gives up the right to change the beneficiary designation without the beneficiary's

consent.

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Management

ISO 9000

Developed by the International organization for Standardization (ISO), it is a set of standards for quality management systems

that is accepted around the world. organizations that conform to these standards can receive ISO 9000 certification. The

standard intended for quality management system assessment and registration is ISO 9001. The standards apply uniformly to

organizations of any size or description.

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Management

Issuing BankA bank that opens a straight or a negotiable letter of credit. This bank assumes the obligation to pay the beneficiary or a

correspondent bank if the documents presented are in accordance with the terms of the letters of Edit.

JHuman

Resource

Management

JobThe total collection of tasks, duties, and responsibilities assigned to one or more positions which require work of the same

nature and level.

JHuman

Resource

Management

Job AnalysisThe systematic, formal study of the duties and responsibilities that comprise job content. The process seeks to obtain

important and relevant information about the nature and level of the work performed and the specifications required for an

incumbent to perform the job at a competent level.

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Management

Job and

Compensation

Analyst (JCA)

ERI‘s compensation and benefits accreditaton program. A JCA credential is granted only to those compensation specialists

who have proven their mastery of analytical and quantitative skills by taking 50 ERI courses within a 12-month period and

answering all exam questions with 100% accuracy. This will successfully illustrate mastery of over two dozen different types of

mathematical skills and calculations and a thousand compensation and benefit concepts.

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Job DescriptionA written description of a job which includes information regarding the general nature of the work to be performed, specific

responsibilities and duties, and the employee characteristics required to perform the job.

JHuman

Resource

Management

Job Documentation Physical evidence, such as a written contract, which explains the responsibilities, rights, and duties of each party.

JHuman

Resource

Management

Job Duty Something that you have to do because it is part of your job.

JHuman

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Management

Job Enlargement The act of increasing in size or volume or quantity or scope.

JHuman

Resource

Management

Job Enrichment Act of making fuller or more meaningful or rewarding.

JHuman

Resource

Management

Job Entry

Requirements / Job

Qualifications / Job

Requirements

The education, experience, and performance requirements for entry into a job. ERI software only reports salaries of properly

qualified and duly licensed practitioners in all occupations. This ERI salary data shows ranges for the very least qualified to the

very most qualified job-holders.

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Resource

Management

Job evaluationUsed for compensation planning purposes, it is the process of comparing a job with other jobs in an organization to determine

an appropriate pay rate for the job.

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Job Evaluation

CommitteeThe committee that conducts the job evaluations.

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Management

Job FamilyA group of jobs having the same nature of work (e.g., engineering) but requiring different levels of skill, effort, responsibility, or

working conditions (e.g., entry-level vs. senior engineer).

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Management

Job GradeOne of the classes, levels or groups into which jobs of the same or similar value are grouped for compensation purposes.

Usually, all jobs in a grade have the same pay range. However, sometimes different jobs in the same pay grade have different

pay ranges, due to market conditions for some of the jobs.

JHuman

Resource

Management

Job interviewA job interview is a process in which a potential employee is evaluated by an employer for prospective employment in their

firm.

JHuman

Resource

Management

Job Offer LetterA job offer letter is a document that confirms the details of an offer of employment. The job offer letter includes details such as

job description, reporting relationship, salary, bonus potential, benefits, and more. The job offer letter generally confirms the

terms.

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Management

Job Responsibility Ability or necessity to answer for or be responsible for one's conduct.

JHuman

Resource

Management

Job Satisfaction The contentment you feel when you have done something right.

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Job SharingTwo people, typically in career-oriented professional positions, performing the tasks of one full-time position in order to enjoy

more flexibility in their personal schedules, typically for child or dependent care. Salary and benefits are prorated.

JHuman

Resource

Management

Job SpecificationsA section of the job description that defines what worker characteristics (i.e., the knowledge, skills and abilities) are required to

perform the job for it to be carried out competently. These characteristics must be bona fide occupational qualifications

(BFOQs).

JHuman

Resource

Management

Job Title A summary for all the duties for a particular job or position.

JHuman

Resource

Management

Job Worth HierarchyThe perceived value of jobs in relationship to each other within an organization. The job worth hierarchy forms the basis for

grouping similar jobs together and establishing salary ranges.

JHuman

Resource

Management

Joint And Survivor

Annuities

An annuity that pays an income jointly to two individuals. Upon the death of one, the same income continues to the survivor for

life. When the survivor dies, payments stop.

JHuman

Resource

Management

Joint And Survivor

OptionProvides a continued payment to your spouse in the event you die prior to your spouse's death after you retire.

JHuman

Resource

Management

Joint Credit Life

InsuranceIs offered to cover the cost of repaying loan obligations in the event of your death.

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Joint VentureAn association formed for a specific purpose and duration between two or more parties to own and/or develop real estate. A

joint venture may take a variety of legal forms including partnership, tenancy in common or corporation.

JHuman

Resource

Management

Joint Whole Life

Insurance

A life insurance contract that covers two or more lives and provides for the payment of the proceeds at the death of the first

insured, at which time the policy automatically terminates, with no remaining coverage for the survivors.

JHuman

Resource

Management

Junk Bonds

Bonds that are initially issued as low-quality securities, often in conjunction with takeovers, leveraged buyouts and

restructurings. They offer high interest and high risk. These securities generally lack the characteristics of a desirable

investment. The rights of the bondholder are subordinated to senior debt holders. Assurance of interest and principal payments

in the future is limited. Repayment often depends on asset sales rather than on the ongoing profitability of the business.

JHuman

Resource

Management

Junk Science A scientific opinion or testimony that is irrelevant and unreliable.

JHuman

Resource

Management

Juvenile Insurance

PolicyAn insurance policy that is issued on the life of a child but is owned and paid for by an adult.

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Resource

Management

kaizen The Japanese term for improvement. It involves both workers and managers.

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Resource

Management

Keogh ActThe Self-Employed Individuals Tax Retirement Act of 1962 (also called HR-10 or the Keogh Act), and its subsequent

amendments, made it possible for owner-employees of unincorporated businesses and other self-employed persons to be

covered under qualified retirement plans.

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Keogh Plan A tax deferred pension account available to the self-employed. (4)

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Management

Key Contributor

Insurance

A qualified tax-deductible pension or profit-sharing retirement plan for self-employed individuals and their employees, with

contribution units based on net earnings. Disability, health, and/or life insurance policies designed to protect the company for

the loss of the services of essential employees, with premiums paid and benefits received by the company, key man insurance.

A type of corporate-owned life insurance purchased by a company to protect itself from financial loss.

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Management

Key Employee A salaried employee who is among the highest paid 10 percent of all the employees employed by the employer.

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Management

Kilobits Per Second

(Kbps)Thousand bits per second. A data transfer rate.

KHuman

Resource

Management

Kilobyte(Kb) One thousand bytes (103) or 1024 (210) bytes. A unit of measurement used for computer file sizes.

KHuman

Resource

Management

Knowledge Based

Pay

Pay-for-knowledge rewards employees for increasing the depth and breadth of knowledge and skill and the utilization of those

skills. Pay-for-knowledge is often an extension of work redesign efforts.

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Resource

Management

Knowledge

Management

Knowledge management is the name of a concept in which an enterprise consciously and comprehensively gathers, organizes,

shares, and analyzes its knowledge in terms of resources, documents, and people skills.

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Knowledge

Management System

(KMS)

A distributed system from Knowledge Systems, Inc. for managing knowledge in organizations.

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Resource

Management

Knowledge, Skills

And Abilities (KSAS)

New hires and merit promotions are made on the basis of how applicants measure up to a set of factors, often called

'Knowledge, Skills, and Abilities' (KSAs) or 'Knowledge, Skills, Abilities and Other Characteristics (KSAOs).'

KHuman

Resource

Management

Knowledge-based

pay

A system of salary differentiation based on the formal education, related experience or specialized training a professional

employee has that qualifies the individual to deal with specific subject matter, or work effectively in a specific field. Salary level

may not be dependent on whether the incumbent utilizes the knowledge.

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Management

KPI‘s‗Knowledge, Skills and Abilities‘ - Key Performance Indicators. Tasks that have been agreed between an employee and line

manager/HR with an expectation that they will be completed satisfactorily in the time agreed or as an ongoing task.

KHuman

Resource

Management

KSA (Knowledge,

skills, and abilities)

Common job specifications. Knowledge refers to acquired information necessary to do the job (e.g., principles of nuclear

physics). Skills refer to acquired measurable behaviors (e.g., autoclave operation). Abilities refers to natural talents or

acquired dexterity (e.g., capacity to lift 200 pounds).

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Resource

Management

Labor Demand The highest wage an employer is willing to pay for a given level of employment or number of employees.

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Resource

Management

Labor force

participationA rate at which the number of people in the labor force is divided by the number of people of working age x 100.

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Labor Grade Salary classification to a specific job title.

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Management

Labor MarketA place where labor is exchanged for wages. These places are identified and defined by a combination of the following

factors: (1) geography (i.e., local, regional, national, international), (2) industry, (3) education, licensing or certification and (4)

function or occupation.

LHuman

Resource

Management

Laissez Faire Tax

PolicyA policy to cut taxes.

LHuman

Resource

Management

Last In, First Out

(LIFO)

Used in inventory accounting terminology to reflect the fact that sales are made against the latest inventory purchases, which

tends to minimize inventory profits and losses. Contrast with First In, First Out (FIFO).

LHuman

Resource

Management

Lead Lag Structure

Policy

The practice of setting salary structures at the beginning of the year, to what the competition would reach at the middle of the

year. This is based on competitive information and market research.

LHuman

Resource

Management

Lead Structure PolicyThe practice of setting salary structures at the beginning of the year- for the entire year. This is based on competitive

information and market research.

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Resource

Management

leadership The process of influencing people while operating to meet organizational requirements and improving the organization through

change.

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Leadership

Development

Formal and informal training and professional development programs designed for all management and executive level

employees to assist them in developing the leadership skills and styles required to deal with a variety of situations.

LHuman

Resource

Management

learning An essential shift or progress of the mind where recreation is evident and enjoins activities such as re-engineering, envisioning,

changing, adapting, moving into, and creating the future.

LHuman

Resource

Management

learning curve A curve reflecting the rate of improvement in performing a new task as a learner practices and uses her newly acquired skills.

LHuman

Resource

Management

Learning

Management System

(LMS)

A software system that automates the administration of training events.

LHuman

Resource

Management

Learning Service

Provider (LSP)Training delivery software on a hosted or rental basis through a specialized ASP offering learning management.

LHuman

Resource

Management

Leased EmployeesA three-party relationship whereby the user business purchases services of a worker, on a more or less full-time basis, from a

business that pays the worker's salary. Any interrelationship between these parties can lead to an affiliated service group

relationship, which is treated separately.

LHuman

Resource

Management

Least Squares LineActual y- values. A line fitted to the points that minimize the sum of the squared deviations of the points. This occurs in

regression analysis.

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Legislation Law emanating from Parliament in the form of Acts.

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Resource

Management

Level Annual

Premium Funding

Method

The cost of providing a pension where the contributions for any employee remain constant until normal retirement age.

LHuman

Resource

Management

Level CuttersPhrases or words used to distinguish the variety of levels in a particular employment arena. (i.e. accounting, senior vs. junior

accountant)

LHuman

Resource

Management

Level Of Work Important information about the content of a job. It will include skill effort, responsibility and working conditions. (9)

LHuman

Resource

Management

Leverage In

FinancingA debt to equity ratio is a measure of the entity's leverage.

LHuman

Resource

Management

Leveraged Employee

Stock Ownership

Plan (LESOP)

A qualified stock bonus plan or a qualified stock bonus and money purchase plan. Like a stock bonus plan, the contributions

need not be dependent on profits, and benefits are distributable in the stock of the employer corporation. Typically, the ESOP

is used as a financing vehicle for the employer corporation. The plan borrows money from the employer or uses the employer's

credit, and purchases employer stock. The borrowed money is paid to the employer for its stock. The loan is repaid with annual

employer contributions. See also Stock Bonus Plan.

LHuman

Resource

Management

Leveraged Stock

Option

An option in which the underlying is the common stock of a corporation. The Company matches a multiple of the stock options

at the employee's purchase price.

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LiabilitiesA financial obligation, or the cash outlay that must be made at a specific time to satisfy the contractual terms of such an

obligation.

LHuman

Resource

Management

Liability InsuranceA type of insurance that provides a benefit payable on behalf of a covered party who is held legally responsible (liable) for

harming others or their property.

LHuman

Resource

Management

Licensed BrokerAn insurance solicitor, licensed by the state, who places business with a variety of insurance companies and who represents

the buyers of insurance rather than the companies even though he or she is paid commissions by the companies.

LHuman

Resource

Management

Lien The right to take and hold or to sell a debtor's property as security or payment for a debt..

LHuman

Resource

Management

Life Annuity An annuity payable during one's life.

LHuman

Resource

Management

Life Annuity With

Period Certain

An annuity payable during one's life. If the insured dies before the designated period of time, the payments will continue to a

contingent payee.

LHuman

Resource

Management

Life Cycle Pension

Plan

A defined benefit plan that expresses benefits as a lump-sum benefit rather than as an annuity. There are no account balances

for the plan participants. In addition, this plan recognizes final average salary in the benefit calculation. Under the life cycle

plan, a participant earns credits for each year of service. Age is not directly a factor, except as it pertains to how much service

an individual could accrue. The total of these credits is considered a percentage, which is multiplied by the annual final average

salary of the participant to determine what lump sum will be paid at retirement. Also known as retirement bonus plan and lump-

sum plan.

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Resource

Management

Life Income Option A life insurance settlement option that guarantees the beneficiary a payout of equal payments as long as the beneficiary lives.

LHuman

Resource

Management

Life Income Option

With Period Certain

A life insurance settlement option that guarantees the beneficiary designated equal payments for a specified period of time.

Then the beneficiary will continue to pay out the life insurance as long as the beneficiary lives. If the beneficiary dies during the

specified period of time, payment will be continued during the rest of the specified time to another recipient designated by the

original beneficiary.

LHuman

Resource

Management

Life Income Option

With Refund

A life insurance settlement option that guarantees a total amount due to the beneficiary. If the beneficiary dies prior to the total

pay out amount, the remaining amount will be given to a contingent payee.

LHuman

Resource

Management

Life Income With

Period Certain

Annuity

An annuity payable during one's life. If the insured dies before the designated period of time, the payments will continue to a

contingent payee.

LHuman

Resource

Management

Life InsuranceThe act or system of insuring against death, a contract by which the insurer undertakes, in consideration of the payment of a

premium (usually at stated periods), to pay a stipulated sum in the event of the death of the insured or of a third person in

whose life the insured has an interest.

LHuman

Resource

Management

Life Insured Canadian term for a person whose life is insured by an insurance company.

LHuman

Resource

Management

Life Underwriter A sales representative of an insurance company.

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Management

Life-Only Annuity Payment of an annuity, until the death of the annuitant.

LHuman

Resource

Management

Lifetime MaximumThe maximum amount of eligible medical expenses that the medical policy will pay for. This is during the lifetime of the

insured.

LHuman

Resource

Management

LIFOIn the event of a redundancy situation occurring, the system of ‗last in first out‘ is regarded as the most equitable method of

choosing those who should be made redundant.

LHuman

Resource

Management

Limited Coverage

PolicyA medical policy that covers only a specific illness, or designated disease. Also called a Dread Disease policy.

LHuman

Resource

Management

Limited-Payment

Whole Life InsuranceA life insurance policy that does not require payment during the entire lifetime of the insured.

LHuman

Resource

Management

Linear Regression The relation between variables when the regression equation is linear, e.g., y = ax + b

LHuman

Resource

Management

Linear Relationship A situation in which the relationship between an x-variable and a y-variable can best be described by a straight line.

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LHuman

Resource

Management

Linear Scales Lines on which equal distances between increments represent equal intervals between increments.

LHuman

Resource

Management

LinkA link generally refers to any highlighted words or phrases in a hypertext document that allow you to jump to another section of

the same document or to another document on the World Wide Web.

LHuman

Resource

Management

Liquidity Being in cash or easily convertible to cash.

LHuman

Resource

Management

ListservThe heart of an electronic mailing list, Listserv software automatically subscribes and unsubscribes list members and sends

copies of every e-mail message to every list subscriber.

LHuman

Resource

Management

Living Benefit RiderA provision in a life insurance policy that allows the insured to receive part or all of the benefit prior to death. This is in the case

of terminal illness.

LHuman

Resource

Management

Living Wage A wage sufficient for a worker and family to subsist comfortably.

LHuman

Resource

Management

Local Area Network

(LAN)

An acronym for Local Area Network, LAN refers to a local network that connects computers located on the same floor or in the

same building or nearby buildings.

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LHuman

Resource

Management

Local NationalEmployees hired by a local subsidiary or branch in the country of operation. Usually nationals of that country but may be

citizens of any country.

LHuman

Resource

Management

Localization To become local, especially to become fixed in one area or part.

LHuman

Resource

Management

Location Selling

Distribution System

Also known as Retail Outlet Distribution System. A system of selling insurance products in high traffic consumer locations. I.e.

department stores, grocery stores, and banks.

LHuman

Resource

Management

Lock Box BankingPremium payments are received at a post office box. The insurer allows the bank to have access to the post office box. The

bank opens all the mail, and deposits the premium. The bank sends receipts of all transactions to the insurer.

LHuman

Resource

Management

Log In / Log On To access a network or remote system. Logging on often requires a password.

LHuman

Resource

Management

Log Off To exit a network or remote system.

LHuman

Resource

Management

LogarithmOne of a class of auxiliary numbers, devised by John Napier, of Merchiston, Scotland (1550-1617), to abridge arithmetical

calculations, by the use of addition and subtraction in place of multiplication and division.

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LHuman

Resource

Management

Logarithmic ModelA calculation under which the x-variable is transformed into logarithms. The equation is y = a + blogx. It is used to describe

certain nonlinear relationships, where y increases at an ever-decreasing rate as x increases.

LHuman

Resource

Management

Logarithmic Scales Scale on which actual distances from the origin are proportional to the logarithms of the corresponding scale numbers.

LHuman

Resource

Management

Long Form

Reinstatement

Application

A reinstatement application. This application is used if the policy has lapsed for a specific reason, and the policyholder would

like to reinstate the policy.

LHuman

Resource

Management

Long-Term Bonus An income stream in the form of a bonus. It is a form of deferred compensation.

LHuman

Resource

Management

Long-Term CareA product designed to provide coverage for necessary diagnostic, preventative, therapeutic, rehabilitative, maintenance, or

personal care services provided in a setting other than an acute care unit of a hospital, such as a nursing home or even one's

own home. Also known as LTC insurance.

LHuman

Resource

Management

Long-Term

Compensation

Long-term compensation is generally any cash compensation paid for work/services from prior to last year per a multi-year

contract or other extended pay agreement. Typical examples of long-term compensation include the current year‘s cash

payouts for the third installment of a five-year incentive plan or current cash paid pursuant to a deferred compensation

agreement in which an employee might receive 10% of last year‘s bonus this year (and each of the next nine years).

LHuman

Resource

Management

Long-Term DebtAlso known as liabilities. These are often divided into current liabilities, which are due within a year of the date entered on the

balance sheet and non-current liabilities, which are due more than a year after the date on the balance sheet.

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LHuman

Resource

Management

Long-Term Disability

Income Insurance

Policy pays an income benefit when the insured is unable to work due to illness or injury (even if injured on vacation). Benefits

are paid weekly or monthly and determined at a percentage of the insured's past earnings, normally 60 to 70%.

LHuman

Resource

Management

Long-Term Disability

Plan / Long-Term

Disability Insurance

Long-Term Disability insurance (LTD) is a common offering in an employee benefit program. The purpose of this insurance is

to offer employees protection from the effects of an illness or injury that results in a long term absence from employment. LTD

is ordinarily group insurance which provides compensation to employees because of their loss of income. This coverage is

characterized by benefit periods of either two years, five years, or to age 65. Typically, group LTD insurance policies will pay an

employee 50 to 60 percent of pre-tax salary, subject to a monthly cap. Most LTD policies become effective after a waiting

period that can range from six months to one year. Most often, LTD begins at the time that the employee's sick leave and short-

term disability benefits have been exhausted. Some LTD programs include rehabilitation services and wellness programs as a

means of managing disability insurance costs and aiding the employee in returning to work as soon as possible.

LHuman

Resource

Management

Long-Term Incentive

Plan

An incentive plan typically limited to executives. It requires a level of performance for a predetermined amount of time, for the

maximum benefit to the employee.

LHuman

Resource

Management

Long-Term Income

ProtectionInsurance plans that provide financial protection in the event of retirement, disability, and financial security for family needs.

LHuman

Resource

Management

Loss Of LimbsAn insurance policy that covers the incident of accidental loss of limbs. See also Accidental Death &Dismemberment (AD&D)

insurance.

LHuman

Resource

Management

Loss Ratio The ratio of paid and incurred claims plus expenses to premium.

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LHuman

Resource

Management

Lost Wages

Lost wages is generally an element of damages recoverable from the defendant under state law. Lost wages is not the same

as loss or reduction of future earnings. The plaintiff has the burden of proving to the court or juries the damages, which he or

she has suffered as a direct result of defendant's wrongdoing. Generally, testimony of a medical expert may be needed to

prove the reason and type of disability preventing the plaintiff from earning his or her regular wages. Proof of the wages

actually lost is also part of the evidence needed to substantiate a claim for lost wages. It is important to determine if your case

allows recovery for lost wages and what evidence is needed to prove your damages. For more information on lost wages,

contact a qualified attorney.

LHuman

Resource

Management

loyalty The intangible bond based on a legitimate obligation; it entails the correct ordering of our obligations and commitments. Loyalty

demands commitment to the organization and is a precondition for trust, cooperation, teamwork, and camaraderie..

LHuman

Resource

Management

Lump Sum Bonus An award that is paid in a single cash payment.

LHuman

Resource

Management

Lump Sum

DistributionsA payment of the entire amount to the employee from a qualified retirement plan within one tax year. (4)

LHuman

Resource

Management

Lump Sum Incentive

AwardAn incentive award that is paid in a single cash payment.

LHuman

Resource

Management

Lump Sum Increase An increase in pay made in the form of one large payment.

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LHuman

Resource

Management

Lump Sum Merit Merit pay in the form of one lump sum cash payment. This is separate from the base pay.

LHuman

Resource

Management

Lump sum paymentA fixed negotiated payment which is not typically included in an employee‘s annual salary. Often times given in lieu of pay

increases.

LHuman

Resource

Management

Lump SummingA method of determining expatriate employee compensation. In this approach, a lump sum is provided to an expatriate to

spend as he or she wishes. It can be broken into lump sums for pre-departure, at the post, and repatriation.

LHuman

Resource

Management

Lump-sum Increase Any increase in pay that is made in the form of a single cash payment. The most common form is the lump-sum merit.

LHuman

Resource

Management

LurkingVisiting an online discussion and reading other people's comments without contributing. Lurking is a good way for a beginner to

get familiar with a newsgroup or forum.

LHuman

Resource

Management

Luxury Automobiles A luxury automobile is defined by the IRS as one with a fair market value of more than a certain amount.

MHuman

Resource

Management

Major Medical

InsuranceA type of supplementary insurance, in addition to basic medical insurance, to provide for the costs of a major illness or injury.

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MHuman

Resource

Management

Major Services Relates to dental insurance for services that are the most costly.

MHuman

Resource

Management

Managed Care A method by which insurance carriers attempt to manage healthcare costs by utilizing a pre-selected panel of physicians.

MHuman

Resource

Management

Managed Health

CareA healthcare approach that delivers medical services while controlling cost and quality.

MHuman

Resource

Management

Management by

Coaching and

Development

(MBCD)

Managers see themselves primarily as employee trainers.

MHuman

Resource

Management

Management by

Competitive Edge

(MBCE)

Individuals and groups within the organization compete against one another to see who can achieve the best results.

MHuman

Resource

Management

Management by

Consensus (MBC)Managers construct systems to allow for the individual input of employees.

MHuman

Resource

Management

Management by

Decision Models

(MBDM)

Decisions are based on projections generated by artificially constructed situations.

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MHuman

Resource

Management

Management by

Exception (MBE)

Managers delegate as much responsibility and activity as possible to those below them, stepping in only when absolutely

necessary.

MHuman

Resource

Management

Management by

Information Systems

(MBIS)

Managers depend on data generated within the company to help them increase efficiency and inter-relatedness.

MHuman

Resource

Management

Management by

Interaction (MBI)

Emphasizes communication and balance of male/female energy as well as integration of all human aspects (mental,

emotional, physical and spiritual), creating an empowered, high-energy, high-productive workforce. [Management style

developed by Barbara Taylor and Michael Anthony]

MHuman

Resource

Management

Management by

Matrices (MBM)Managers study charted variables to discern their interrelatedness, probable cause and effect, and available options.

MHuman

Resource

Management

Management by

Objectives (MBO)A process by which management and employees set specific goals with feedback on goal progress.

MHuman

Resource

Management

Management by

Organizational

Development

(MBOD)

Managers constantly seek to improve employee relations and communications.

MHuman

Resource

Management

Management by

Performance (MBP)Managers seek quality levels of performance through motivation and employee relations.

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MHuman

Resource

Management

Management by

Styles (MBS)Managers adjust their approaches to meet situational needs.

MHuman

Resource

Management

Management by

Walking Around

(MBWA)

Managers walk around the company, getting a 'feel' for people and operations; stopping to talk and to listen. Sometimes

known as Management by Walking Around and Listening (MBWAL). This management style is based on the HP Way

developed by entrepreneur Dave Packard, co-founder of Hewlett-Packard.

MHuman

Resource

Management

Management by

Work Simplification

(MBWS)

Managers constantly seek ways to simplify processes and reduce expenses.

MHuman

Resource

Management

Managing General

Agent (MGA)

An independent contractor that appoints personal general agents on behalf of an account, and who might represent numerous

accounts.

MHuman

Resource

Management

Mandatary A person that receives a mandate.

MHuman

Resource

Management

Mandated Benefits Non-cash benefits that are required by state law to be covered by an insurance carrier.

MHuman

Resource

Management

Mandator An individual who hires another to carry out the command or wishes of a mandate.

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MHuman

Resource

Management

Mandatory

Continuing Education

(MCLE)

Mandatory Continuing Legal Education (also known as MCLE) are annual educational requirements for legal professionals.

MCLE credits are governed by various related State Boards. Approximately 1/2 of all U.S. states have these annual

requirements. The www.eridlc.com website refers to legal continuing education credit as CLE.

MHuman

Resource

Management

Mandatory

Continuing Legal

Education (MCLE)

Annual educational requirements for legal professionals. MCLE credits are governed by various related State Boards.

MHuman

Resource

Management

Mandatory Securities

Valuation Reserve

(MSVR)

A liability account that is supposed to incorporate realized and unrealized capitol gains and losses resulting from investments.

MHuman

Resource

Management

Manual Rates A premium rate based on claims experience of an average group.

MHuman

Resource

Management

Margin An error factor, usually a percentage of premium, margin is used by underwriters to set risk.

MHuman

Resource

Management

Marginal Tax Rate The tax rate paid on the last dollar of income.

MHuman

Resource

Management

Market Adjustment The percentage increase to organization, group or individual pay that is necessary to adjust it to the estimated market level.

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MHuman

Resource

Management

Market Based Salary

Increase BudgetAn organizations budget to increase salaries that is estimated by their knowledge of the competition.

MHuman

Resource

Management

Market Basket A combination of goods and services used to calculate a consumer price index.

MHuman

Resource

Management

Market Capitalization The result of multiplying the number of outstanding shares by the price per share.

MHuman

Resource

Management

Market Compa-Ratio The comparison of internal pay to competitive pay of a company or individual.

MHuman

Resource

Management

Market Cycle A description of the various stages of a product or company as it growths or declines.

MHuman

Resource

Management

Market IndexAn index that is used to calculate an individual or groups market pay by dividing the current pay of an individual by the market

pay.

MHuman

Resource

Management

Market PricingThe technique of creating a job-worth hierarchy based on the ―going rate‖ for benchmark jobs in the labor market(s) relevant to

the organization. Non-benchmark jobs are slotted into the structure based on whole job comparison.

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MHuman

Resource

Management

Market Rates An organization's determination of rates for wages that are typical for a specific occupation.

MHuman

Resource

Management

Master Contract A legally binding agreement between and insurance company and the policy holder, usually an organization.

MHuman

Resource

Management

Master PlanA defined benefit or defined contribution plan, such as pension or other employee benefit plan, that has been developed by a

sponsoring organization and that provides a single trust account in which all adopting employers must invest their plan

contributions. The sponsoring organization must have the plan approved by the Internal Revenue Service.

MHuman

Resource

Management

Matching

Contributions

Contributions that are made to an employee's 401K plan by their employer. The intent is to match the employee contribution to

a pre-set dollar or percentage maximum.

MHuman

Resource

Management

Material Fact In the insurance industry a fact that is considered applicable to an underwriter when considering rating or issuing a policy.

MHuman

Resource

Management

Material

Misrepresentation

In the insurance industry any incorrect, misleading or false statement(s) by the applicant that would cause the insurer to accept

this individual as a risk, when under truthful circumstances the insurer may have accepted the risk under other provisions, or

may have declined the policy.

MHuman

Resource

Management

MaterialityIn accounting, this idea represents that that relevant information concerning monetary transactions and/or condition of the

organization it to be reported and explained separately.

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MHuman

Resource

Management

Matrix organization An organizational structure where employees report to more then one manager or supervisor.

MHuman

Resource

Management

Matters of

SignificanceRefers to the level of importance or consequence of the work performed.

MHuman

Resource

Management

Matured Endowment In insurance, a type of life insurance that is payable if the insured is still alive on the date the policy has matured.

MHuman

Resource

Management

Maturity CurveA process of determining employees‘ salaries as a function of years from the time of the first degree earned. Maturity curves

are most commonly used for pricing jobs in lieu of relying on job evaluation techniques. The process assumes that years in the

profession equate with more highly valued competencies.

MHuman

Resource

Management

Maximum BenefitIn the U.S., the highest lifetime or annual benefit amount that can be paid by a qualified defined benefit plan to a plan

participant legally. (Canada) The highest amount an insured may receive under an insurance plan.

MHuman

Resource

Management

Maximum Benefit

PeriodThe longest amount of time that a disability insurance plan will continue to provide disability income payments.

MHuman

Resource

Management

Maximum Benefits

For Related

Confinements

Provision

A limitation that is found within policies that refer to all hospital stays and all surgeries that are completed within a period of

sickness or a surgery.

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MHuman

Resource

Management

Maximum

Reasonable

Compensation

In the IRS determination of reasonable compensation for owner-managers, one of the main considerations is that of

comparable wages. Maximum reasonable compensation would be the highest amount of compensation, both wages and

bonus, which would be allowable to be used as a business expense for services rendered in comparable circumstances.

Based on IRS cases, ERI developed the definition in terms of the standard error of the distribution of compensation for

comparable executives. This measure is approximately plus/minus 3.01 standard error. Very similar to the standard deviation,

the standard error represents the range of pay in which one might find 95% of the population.

MHuman

Resource

Management

Maximum Years of

Experience

In ERI survey software data, maximum years is twice the normal career job incumbency period. This is two times the average

number of years people hold this job (per Census and other survey reports). Beyond this point of maximum years you can

expect to find very few people still performing the same job. This maximum years figure is the top number of years that

accurately and reliably predicts pay differentials. The pay of those few who hold this job beyond the maximum year is not

related to their total years of experience; i.e., if 5 years is the average, pay differentials are not reported beyond 10; the pay of

those at 11, 12, 13 years, etc., remains best predicted by the 10-year level and has a spurious relationship with the years in

excess of 10. Pay thereafter is related to some factor beyond years of total experience over the maximum.

MHuman

Resource

Management

McCarran Ferguson

Act

The McCarran Ferguson Act allows employers to not include certain time and activities of employees, prior to and/or after

work, as "work time." These activities are ones that are not required in order to accomplish the job. The most common of these

is the time taken to commute to work. Examples of types of activities other than commuting that are non-compensable are:

waiting to check in at the beginning of a workday or waiting in line for a paycheck at the conclusion of a shift.

MHuman

Resource

Management

Mean A mean is the result of dividing the sum of two or more quantities by the number of quantities. See AVERAGE.

MHuman

Resource

Management

MedianOne type of norm measure found by arranging the values in order and then selecting the one in the middle. Therefore, half of

the numbers are less than the median, and half are higher than the median.

MHuman

Resource

Management

Median - Grouped

DataA special quantitative analysis technique is useful when analyzing a group of data in a frequency distribution.

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MHuman

Resource

Management

Mediation Services The process of intervention by a specialist in an employment dispute. Provided under the Employment Relations Act 2000.

MHuman

Resource

Management

MedicaidAn insurance plan funded by the government that provides medical coverage to individuals under age 65 who are low wage

earners, and/or meet other criteria.

MHuman

Resource

Management

Medical ApplicationAn application for medical insurance which also include a medical exam for which the results are reported the insurance

company.

MHuman

Resource

Management

Medical Expense

InsuranceA type of insurance plan designed to pay for various medical expenses.

MHuman

Resource

Management

Medical Information

Bureau (MIB)

An organization that provides fraud protection from those that would try to hide or omit information when applying for various

insurance coverage.

MHuman

Resource

Management

Medical Necessity

Provision

A provision in most medical insurance plans that states that a medical service must be prevent harm to the patient or an

adverse effect on the patient's quality of life, and in addition cannot be experimental in nature.

MHuman

Resource

Management

Medical ReportA report on a potential insured's health based on physical examination and questions by a physician for the purpose of a

medical application.

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MHuman

Resource

Management

Medical Savings

(Spending) Account

(MSA)

A savings account that can be used to pay for medical expenses that are not covered by insurance. The employee

contributions to the plan are tax-deductible.

MHuman

Resource

Management

Medicare

A medical plan that is available to those over age 65 and those with specific disabilities via the U.S. government through the

Social Security Administration. There are two plans available through Medicare. Part A, provides for inpatient hospital services

and post-hospital care. Part B, pays for medically necessary doctors' services, outpatient hospital services and a number of

other medical services and supplies not covered under Medicare Part A.

MHuman

Resource

Management

Medicare Risk HMO An option to replace the traditional Medicare plans A and B with an HMO plan that is approved by Medicare.

MHuman

Resource

Management

Medicare Secondary

Payor Rules

These rules determine when an employer, group medical insurance plan, would cover medical claims first. Amounts not

covered by the employer's plan can then be submitted to Medicare.

MHuman

Resource

Management

Medicare Supplement An insurance option available to Medicare eligible individuals to cover expenses that are not covered by Medicare.

MHuman

Resource

Management

Mental Health In medical insurance these benefits are related to emotional problems and sometime substance abuse issues.

MHuman

Resource

Management

Mental Health Parity

Act Of 1996

Insurance plans that provide mental health benefits are not allowed to impose lifetime or annual dollar limits for mental health

benefits that are less than those imposed on medical or surgical benefits. Substance abuse treatment is not included in these

guidelines.

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MHuman

Resource

Management

MentoringA one-to-one process between an outside trainer and an employee, whereby the former will ‗train‘ the latter. See also

Coaching.

MHuman

Resource

Management

Merger The combining of two or more entities into one, therefore all administration is under one corporation.

MHuman

Resource

Management

Merit Bonus An incentive award based upon an individual's performance.

MHuman

Resource

Management

Merit Increase An increase to an individual‘s base pay rate based on performance.

MHuman

Resource

Management

Merit Matrix A process by which an individuals salary increase is determined by using performance and pay within the salary range.

MHuman

Resource

Management

Merit Pool Total amount of dollars available for salary increases.

MHuman

Resource

Management

Merit Progression A process by which an employee progresses through a wage range due to performance or other measurable criteria.

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MHuman

Resource

Management

Merit RatingA method for appraising the performance of an employee with respect to his or her job. It frequently serves as a basis for

making pay adjustments, promotion decisions, or work reassignments.

MHuman

Resource

Management

Metropolitan

Statistical Areas

(MSA)

A geographic area consisting of a large population nucleus together with adjacent communities having a high degree of

economic and social integration with the nucleus. Where metropolitan areas are combined to form Consolidated Metropolitan

Areas (CMSA's), the component metropolitan areas are designated Primary Metropolitan Statistical Areas (PMSA's).

Metropolitan areas that are not combined to form CMSA's are designated Metropolitan Statistical Areas (MSA's). More

information on metropolitan areas is available from the U.S. Census Bureau website:

www.census.gov/population/www/estimates/metroarea.html.

MHuman

Resource

Management

Midpoint The salary that represents the middle of a given salary range or pay grade.

MHuman

Resource

Management

Midpoint ProgressionThe difference in wage rates paid between two adjacent grades, usually defined as the difference in the midpoints of the two

adjacent grades. A midpoint progression is calculated by taking the difference between two adjacent midpoints as a

percentage of the lower of the midpoints.

MHuman

Resource

Management

Military Service

Payments

A salary payment agreement between an employee and employer when the employee is involved in such temporary duties as

the National Guard or Reserve. The arrangement may include the employer paying full regular salary or the difference between

that when involved in active status and regular duty.

MHuman

Resource

Management

Minimum AgeThe federal law states the minimum age for employment is 17, however a minor under the age of 17 may also work if the

conditions of the occupation meet certain criteria and are not dangerous.

MHuman

Resource

Management

Minimum Age

Requirement

A requirement in planning pensions that an employee must be a certain age prior to being permitted to participation in the

employer's pension plan.

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MHuman

Resource

Management

Minimum Continuing

Legal Education

(MCLE)

Annual educational requirements for legal professionals. MCLE credits are governed by various related State Boards.

MHuman

Resource

Management

Minimum Deposit

ArrangementAn agreement where an insured can apply the first year cash value to the initial premium amount.

MHuman

Resource

Management

Minimum Deposit

Business

A policy owner will request the premium be paid out of the policy's cash value, and the insurance company is only to bill the

policy owner if the cash value is not enough.

MHuman

Resource

Management

Minimum Distribution

Rules

When an employee reaches the age of 70.5 a minimum distribution is required. The amount is determined by the amount in

the employee's account and the employee's life expectancy.

MHuman

Resource

Management

Minimum

Participation

Requirements

A rule that requires all plans to have at least 50 employees or 40 % of the total employees enrolled.

MHuman

Resource

Management

Minimum Premium

Plan (MPP)

A health insurance plan that is partly self -insured by the employer, however is fully administered by the insurance carrier. The

employer pays all claims up to an agreed amount, and the carrier pays the rest.

MHuman

Resource

Management

Minimum Service

Requirement

Certain insurance plans require a that an employee wait a specific period of time before they are eligible to participate in the

particular plan.

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MHuman

Resource

Management

Minimum wages The lowest level of earnings of employees set by Government.

MHuman

Resource

Management

Minor Laws regarding work hours, work conditions and occupations for certain ages under 18 years of age.

MHuman

Resource

Management

MisrepresentationTo be dishonest and provide false information to sell insurance plans. To be dishonest and provide false information when

applying for insurance.

MHuman

Resource

Management

Mission Statement A statement illustrating who the company is, what the company does, and where the company is headed.

MHuman

Resource

Management

Misstatement Of Age

Provision

Usually related to life insurance if at the time of the insured's death it is determined that the insured did not state the correct

age on the application, and resulted in incorrect premium being charged for the amount of insurance that the insured received.

MHuman

Resource

Management

Mix An outline of parts of pay generally stated in percentages of a total amount.

MHuman

Resource

Management

Mode In a set of observations the worth that is most prevalent.

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MHuman

Resource

Management

Mode Of Premium

PaymentThe frequency that premiums are paid.

MHuman

Resource

Management

model (1) A person that serves as a target subject for a learner to emulate. (2) A representation of a process or system that show the

most important variables in the system in such a way that analysis of the model leads to insights into the system.

MHuman

Resource

Management

Model Bill Legislation created by NAIC that can be used exactly as is or as a guideline by states or provinces to create their own laws.

MHuman

Resource

Management

Model Life Insurance

Solicitation

Regulation

In a 1976 a regulation that was implemented by the NAIC that states insurance companies are to provide information detailing

what life insurance plan may best suit their needs, an understanding of the plan provisions, and the ability to conduct an

analysis of various plans.

MHuman

Resource

Management

Model Rules

Governing The

Advertisement Of Life

Insurance

Life insurance guidelines set by NAIC regarding advertising for annuity contracts and life insurance.

MHuman

Resource

Management

Model Unfair Trade

Practices ActA NAIC law that contains prohibition against any form of insurance advertisements that are misleading, untrue or deceptive.

MHuman

Resource

Management

Modified Net

PremiumsPremiums that are net rather than level.

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MHuman

Resource

Management

Modified-Premium


A version of a whole life insurance policy where the insured pays less premium than usual for an agreed upon amount of time.

After that period of time the premium payments increase to an agreed upon amount that is higher than usual for the life of the

policy.

MHuman

Resource

Management

Money Market Fund A mutual fund that only makes investments in money markets.

MHuman

Resource

Management

Money Purchase

Plan

A kind of defined contribution plan that utilizes a formula to determine the employer's contribution to the employees account.

The formula and contribution are not related to profitability.

MHuman

Resource

Management

Monthly Debit

Ordinary InsuranceOrdinary life insurance that is paid for in monthly premium payments, typically paid directly to the agent.

MHuman

Resource

Management

Moral HazardThe risk that a potential insured might purposefully try to hide or falsify information that would affect the underwriter's decision

to accept the risk of insuring this individual.

MHuman

Resource

Management

morale The mental, emotional, and spiritual state of an individual.

MHuman

Resource

Management

Morbidity A diseased state. The occurrence of disease, or of all diseases in a population.

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MHuman

Resource

Management

Morbidity RateThe chance that an individual at a certain age will become ill or disabled. In health insurance a persons premium is somewhat

based on the morbidity rating for their specific age group.

MHuman

Resource

Management

Morbidity Table A chart that indicates the prevalence of illness among various age groups.

MHuman

Resource

Management

Mortality ChargeThe cost that is charged for the insurance protection element of a universal life insurance policy. The cost takes into account

various such as the amount at risk, the insured's current age and the insured's risk factor at the time the policy is purchased.

MHuman

Resource

Management

Mortality Curve A graph that depicts the change in mortality rates throughout life.

MHuman

Resource

Management

Mortality ExperienceSeveral definitions: 1) The rate that participants in a pension plan have died. 2) The effect of actual deaths while on the plan

that then has a financial effect for the plan.

MHuman

Resource

Management

Mortality RateThe frequency that death occurs among a specific group of people. The premium paid for a life insurance policy is partly

established by the mortality rate by that person's age.

MHuman

Resource

Management

Mortality Table Actuarial tables used in the insurance industry to predict the life expectancy and the death rates for various types of people.

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MHuman

Resource

Management

Mortgage

Redemption

Insurance

A decreasing term insurance plan that insures the life of a person that takes out a mortgage. The policy proceeds will estimate

the rest of the mortgage in the event of death.

MHuman

Resource

Management

motivating

Using an individuals wants and needs to influence how the person thinks and what does. Motivating embodies using

appropriate incentives and methods in reinforcing individuals or groups as they effectively work toward task accomplishment

and resolution of conflicts / disagreements. Coupled with influence, motivating actively involves empowering junior leaders and

workers to achieve organizational goals and properly rewarding their efforts as they achieve the goals.

MHuman

Resource

Management

MotivationThe reason(s) why a person works at a particular job and for a particular organization. Subject to various theories relating to

the way they do things.

MHuman

Resource

Management

Motivational theories An attempt to explain how people are motivated, in the form of work behavior and performance.

MHuman

Resource

Management

Moving And

Relocation Expenses

These expenses are paid for up front or reimbursed to an employee by the employer when the company needs to have that

employee's skills utilized in another location.

MHuman

Resource

Management

MSA

Metropolitan Statistical Areas are U.S. geographic area consisting of a large population nucleus together with adjacent

communities having a high degree of economic and social integration with the nucleus. Where metropolitan areas are

combined to form Consolidated Metropolitan Areas (CMSA's), the component metropolitan areas are designated Primary

Metropolitan Statistical Areas (PMSA's). Metropolitan areas that are not combined to form CMSA's are designated Metropolitan

Statistical Areas (MSA's). More information on metropolitan areas is available from the U.S. Census Bureau website:

www.census.gov/population/www/estimates/metroarea.html.

MHuman

Resource

Management

Multi-Company

RepresentationA life and health insurance agent is permitted to represent more than one insurance company.

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MHuman

Resource

Management

Multi-Employer Plan A employee benefit plan or pension plan that that has more than one employer.

MHuman

Resource

Management

Multinational Pooling An arrangement that links together the benefit plans of a multinational company.

MHuman

Resource

Management

Multiple Employee

Welfare (MEWA)

An employee benefit plan that is maintained by two or more employer groups to provide health and welfare benefits to the

employees.

MHuman

Resource

Management

Multiple Employer

Trust (MET)

Group benefit plans that cover medical, dental and pension plans, typically for smaller employers, that have joined together

under one master policy.

MHuman

Resource

Management

Multiple Line Agency

System (MLA)

Full-time agents that sell life and health, and property and casualty insurance to groups of financially related or managed

companies.

MHuman

Resource

Management

Mutual Insurance

CompanyAn insurance company that is owned by individual or group policyholders, not stockholders.

MHuman

Resource

Management

Mutualization The process that occurs while a stock insurance company changes to a mutual company.

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MHuman

Resource

Management

Myers-Briggs Type

IndicatorA psychological test used to assess an individuals personality type.

NHuman

Resource

Management

Naic Model Privacy

Act

A bill written by the National Association of Insurance Commissioners that set guidelines for data provided to or by insurance

agents, institutions and support organizations.

NHuman

Resource

Management

NAICSThe North American Industry Classification System was developed by the United States, Canada, and Mexico to provide

comparable statistics of industrial production across the three countries and replace SIC. NAICS also provides for increased

comparability

NHuman

Resource

Management

Named Individuals Based on SEC requirements, these persons have their compensation listed in the company proxy statement.

NHuman

Resource

Management

National Association

Of Insurance

Commissioners

(NAIC)

The primary responsibility is to protect the interests of consumers that are covered or considering buying insurance. The NAIC

helps state regulators in that respect.

NHuman

Resource

Management


Of Securities Dealers

(NASD)

A voluntary selfregulated securities organization responsible for the operation and regulation, including fair and ethical

practice, of the NASDAQ stock market and overthecounter markets.

NHuman

Resource

Management


Of Securities Dealers

Automated Quotation

System (NASDAQ)

An organization that helps in stock trading, via a computerized system, for listed and over the counter stocks.

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Resource

Management

National Average

Earnings (NAE)A measurement, per individual country, of the average salary per individual.

NHuman

Resource

Management

National Brokerage

HousesCompanies that provide individualized employee benefit and risk management advice to their clients.

NHuman

Resource

Management

National Committee

For Quality

Assurance (NCQA)

An independent group that reviews quality of care and other procedures of managed care organizations to render an

accreditation. NCQA developed the Health Plan Employer Data and Information Set (HEDIS), which is used as part of the

accreditation process.

NHuman

Resource

Management

National

Compensation

Survey (NCS)

A survey of salaries, wages, and benefits produced by the U.S. Bureau of Labor Statistics. Includes local, regional, and

nationwide data. The NCS is designed to replace the Employment Cost Index (ECI), the Occupational Compensation Survey

Program (OCSP), and Employee Benefits Survey (EBS).

NHuman

Resource

Management

National Labor

Relations Act Of

1935 (Wagner Act)

A federal law giving employees the right to self-organize unions, bargain collectively through representatives of their own

choosing.

NHuman

Resource

Management

National Labor

Relations Board

(NLRB)

A board of members who administer the Wagner and the Taft-Hartley Acts. The board determines bargaining agents,

bargaining units and adjudicates unfair labor practice charges.

NHuman

Resource

Management

National

Occupational

Classification System

(NOC)

The Canadian labor market classification system for jobs. Includes coding for duties, skills, interests, aptitudes, education

requirements, and work settings.

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Resource

Management

National Organization

Of Life And Health

Guaranty

Associations

(NOLHGA)

A voluntary association of life and health guaranty associations that resolve issues and problems for policyholders in the event

of a life and health insurance company insolvency.

NHuman

Resource

Management

National Technical

Information Service

(NTIS)

This U.S. government agency is responsible for the SIC (Standard Industrial Classification) manual.

NHuman

Resource

Management

Nature Of Work Information about a specific occupation that describes the duties and responsibilities.

NHuman

Resource

Management

NCSThe National Compensation Survey is the U.S. government's survey of salaries, wages, and benefits produced by the U.S.

Bureau of Labor Statistics. Includes local, regional, and nationwide data. The NCS is designed to replace the Employment Cost

Index (ECI), the Occupational Compensation Survey Program (OCSP), and Employee Benefits Survey (EBS).

NHuman

Resource

Management

NEC Stands for: not elsewhere classified.

NHuman

Resource

Management

Needs Analysis Discovering facts about a potential client to assist in determining their insurance needs.

NHuman

Resource

Management

Negative DifferentialWhen the cost of goods and housing are more expensive in an employees home country than those of the assigned temporary

location.

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Resource

Management

Negotiated

TrusteeshipWhen collective bargaining results in an agreement between a union and an employer to provide the organization insurance.

NHuman

Resource

Management

Negotiation The process of discussion with a view to mutual settlement usually by the means of a conference.

NHuman

Resource

Management

Nepotism Favoritism shown to relatives by individuals in a position of authority such as CEO‘s, managers or supervisors.

NHuman

Resource

Management

Net Amount At Risk The difference between the death benefit of a life insurance policy and the policy's reserve at the end of the year.

NHuman

Resource

Management

Net Asset Value

(NAV)The dollar value or purchase price of a single stock in a mutual fund.

NHuman

Resource

Management

Net Assets Total assets minus total liabilities.

NHuman

Resource

Management

Net Cost A figure to describe the cost of individual insurance.

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Resource

Management

Net Income After Tax An individuals or company's profit after taking into consideration all other expenses and income and taxes.

NHuman

Resource

Management

Net Loss An individuals or company's loss after taking into consideration all other expenses and income and taxes.

NHuman

Resource

Management

Net Premium In life insurance it is the amount of money necessary to provide benefits.

NHuman

Resource

Management

Net Present Value

(NPV)The current worth of an investment's future net cash flows minus the initial investment.

NHuman

Resource

Management

Net Sales Total sales less any returns and discounts.

NHuman

Resource

Management

Net Worth Complete assets less complete liabilities.

NHuman

Resource

Management

NetworkingNetworking is building a web of interpersonal relationships for mutually beneficial purposes such as business referrals,

customer acquisition, complementary product offerings, and sharing information. Networking means establishing, maintaining

and utilizing contacts made for purposes beyond the reason for the initial contact.

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Resource

Management

New Employee

Orientation

New employee orientation is the process for welcoming a new employee into your organization. New employee orientation,

often spearheaded by a meeting with the Human Resources department, generally contains information about safety, the work

environment, the new job description, benefits and eligibility, company culture, company history, and anything else relevant to

working in the new company.

NHuman

Resource

Management

New York Stock

Exchange (NYSE)In the U.S., the NYSE is the oldest and the largest stock exchange. It is located on Wall Street in New York City.

NHuman

Resource

Management

NMHPANewborns' and Mothers' Health Protection Act of 1996 (NMHPA) is part of the Mental Health Parity Act and states that group

health plans cannot restrict the length of any hospital stay that relates to childbirth for the newborn or mother to less than 48

hours for a normal vaginal delivery or 96 hours for a Caesarean delivery.

NHuman

Resource

Management

No Correlation A relationship where there is no pattern.

NHuman

Resource

Management

NOCThe National Occupational Classification System is the Canadian labor market classification system for jobs. Includes coding

for duties, skills, interests, aptitudes, education requirements, and work settings.

NHuman

Resource

Management

No-Evidence LimitIn group insurance, the maximum dollar amount that an insurance company will insure an individual for without requiring

evidence of insurability. May also be referred to as guaranteed issue.

NHuman

Resource

Management

No-Load Fund A mutual fund in which no commissions are paid if the purchaser buys direct from the fund.

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Resource

Management

Nominal

MeasurementsThese measurements use numbers as an identifier.

NHuman

Resource

Management

Non Admitted Assets The assets that are restricted from being added to a life insurance company's balance sheet.

NHuman

Resource

Management

Non Admitted

ReinsurerIn a certain jurisdiction, a reinsurer who is not licensed to accept reinsurance.

NHuman

Resource

Management

Non Compete

Agreements

A condition of an employment contract that states a specific time period that the employee cannot compete with the employer if

the employee is terminated.

NHuman

Resource

Management

Non Current Assets An asset that is not easily changed to cash or not anticipated to become cash within a year.

NHuman

Resource

Management

Non Current

LiabilitiesA debt that is not due to be paid within the next year.

NHuman

Resource

Management

Non Statutory Stock

Option (NSO)

A stock-option that is part of a compensation package that does not meet the IRS guidelines for a qualified stock option. The

employee is taxed at the beginning if the value of the stock is known, or at the end when the employee exercises the option if

the value of the option in unknown. These options are typically offered to executives.

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Resource

Management

Non-Cancelable And

Guaranteed

Renewable Policy

A health insurance policy for an individual that states the premium cannot be increased and the benefits cannot be terminated.

NHuman

Resource

Management

Noncash Incentives Incentives that are not a direct cash payment, such as comp time, a membership to a club and a reserved parking space.

NHuman

Resource

Management

Noncontributory

Benefit Plan

A term used when discussing employee benefit plans under which the employer pays, or contributes, the entire cost of the

premium for benefits for the employees.

NHuman

Resource

Management

Noncontributory

Organization

Insurance

A term used when discussing employee benefit plans under which the employer pays, or contributes, the entire cost of the

premium for benefits for the employees.

NHuman

Resource

Management

Nondiscrimination

Rules

An Internal Revenue code that states employee benefit plans are not to provide significantly greater benefits to higher paid

employees and owners than to lower paid employees.

NHuman

Resource

Management

Non-Duplication Of

Benefits

A kind of coordination-of-benefits provision under which the insured's secondary insurance plan pays the difference, if any,

between the amount paid by the primary plan and the amount that would have been payable by the secondary plan had that

plan been primary.

NHuman

Resource

Management

Nonelective

Contributions

Any employer contribution, that is not a matching contribution, for which the employee may choose to have the contribution

paid to the employee in cash in lieu of being contributed to the plan and, the contributions are not forfeitable when made and

cannot be withdrawn prior to reaching certain conditions.

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Resource

Management

Nonexclusive

TerritoryAn arrangement in which several agents can represent one insurer.

NHuman

Resource

Management

Nonexempt

Employees / Non-

exempt Employee

Employees who are subject to the minimum wage and overtime pay provisions of the Fair Labor Standards Act.

NHuman

Resource

Management

Nonfinancial Rewards Any recognition given to an employee by an employer other than cash.

NHuman

Resource

Management

Nonforfeiture Factors Values that are similar to annual premiums that insurers may use to calculate policies cash values.

NHuman

Resource

Management

Nonforfeiture Values The benefits that a life insurer guarantees to the policy holder if the policy holder discontinues premium payments.

NHuman

Resource

Management

Nonforfieture Options Different options that a policy holder has if a life insurance policy lapses to apply the cash value of that policy.

NHuman

Resource

Management

Nonimmigrant Visas Under specific circumstances, a visa will allow a non U.S. citizen to work in the United States.

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Resource

Management

Non-Insured Pension

FundA pension fund that has not been funded by insurance contracts.

NHuman

Resource

Management

Nonmedical

ApplicationAn application for insurance that does not require the applicant to submit to a medical examination.

NHuman

Resource

Management

Nonmonetary Awards An award that is not cash.

NHuman

Resource

Management

Nonparticipating

PolicyAn annuity or life insurance policy that the policy holder does not receive dividends.

NHuman

Resource

Management

Nonqualified Annuity An annuity that has been funded with money that was previously taxed in the same year that the funds are to be deposited.

NHuman

Resource

Management

Nonqualified

Deferred

Compensation Plan

Typically used for senior executives and highly compensated employees, this retirement income plan does not meet the

guidelines for a qualified plan, therefore they do not meet the criteria to be eligible for the tax advantages of a qualified plan.

NHuman

Resource

Management

Nonqualified Foreign

PlanA foreign plan that is no longer qualified due to termination or reversal of a section 404A election.

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Resource

Management

Nonqualified Pension

Plan

A pension plan that does not meet IRS requirements, or receive the positive tax benefits, due to the increased benefits

compared to what is allowable of a qualified plan.

NHuman

Resource

Management

Non-Qualified Stock

Options

A stock-option that is part of a compensation package that does not meet the IRS guidelines for a qualified stock option. The

employee is taxed at the beginning if the value of the stock is known, or at the end when the employee exercises the option if

the value of the option in unknown. These options are typically offered to executives.

NHuman

Resource

Management

Nonquantitative job

evaluation

A method that creates job worth hierarchy based on the perceived value of the ―whole job,‖ but does not utilize quantitative

methods. Examples include classification, ranking, and slotting.

NHuman

Resource

Management

Nonrandom Sampling A sampling that has not used a random selection.

NHuman

Resource

Management

Nonresident License The license gives the agent of another state authorization to the sell insurance in the licensing state.

NHuman

Resource

Management

Nonretroactive

Disability BenefitsA disability benefit that pays for the period of disability after the elimination period.

NHuman

Resource

Management

Nonscheduled Dental

PlanThe dentist is paid based on actual charges, if the charges are usual, customary and reasonable.

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NHuman

Resource

Management

Nonsmoker Risk

ClassPeople who are a standard risk and that have not smoked for a particular time period prior to the application.

NHuman

Resource

Management

Nonsymmetric

DistributionGraphed points that are not the exact image of each other, usually with cluster of more points on one side of the graph.

NHuman

Resource

Management

Normal Cost The amount necessary to fund for retirement benefits for one plan year for an individual or a whole pension plan.

NHuman

Resource

Management

Normal Distribution A certain bell shaped distribution on an graph usually as a statistic deduction.

NHuman

Resource

Management

Normal Retirement

Age

The age, as established by a plan, when retirement normally occurs, and the participant(s) in the plan can receive their full

pension benefits.

NHuman

Resource

Management

North American

Industry Classification

System (NAICS)

Developed by the United States, Canada, and Mexico to provide comparable statistics of industrial production across the three

countries and replace SIC. NAICS also provides for increased comparability with the International Standard Industrial

Classification.

NHuman

Resource

Management

NTISThe National Technical Information Service is the U.S. government agency responsible for the SIC (Standard Industrial

Classification) manual.

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NHuman

Resource

Management

Numerical Rating

System

A system of categorizing risk where medical and nonmedical factors are given a numeric number based upon the expected

impact on mortality.

OHuman

Resource

Management

Observation interviewThe process of observing employees while performing their respective jobs or tasks used to collect data regarding specific jobs

or tasks.

OHuman

Resource

Management

Occasional Tasks

Under the Fair Labor Standards Act (FLSA) new regulations, occasional tasks are infrequently recurring tasks that cannot

practicably be performed by nonexempt employees, but are the means for an exempt employee to properly carry out exempt

functions and responsibilities, are considered exempt work. The following factors should be considered in determining whether

such work is exempt work: Whether the same work is performed by any of the exempt employee‘s subordinates; practicability

of delegating the work to a nonexempt employee; whether the exempt employee performs the task frequently or occasionally;

and existence of an industry practice for the exempt employee to perform the task. (FLSA Section 541.707)

OHuman

Resource

Management

Occupation Generalized job or family of jobs.

OHuman

Resource

Management

Occupational

DifferentialsWage rates that have stable differences among occupations.

OHuman

Resource

Management

Occupational

Employment

Statistics (OES)

Occupational Employment Statistics that provides employment and wage estimates by occupation for selected metropolitan

areas, as well as the nation and the individual states.

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OHuman

Resource

Management

Occupational Outlook

HandbookProvides general information on jobs, occupations, job categories.

OHuman

Resource

Management

OESOccupational Employment Statistics that provides employment and wage estimates by occupation for selected metropolitan

areas, as well as the nation and the individual states.

OHuman

Resource

Management

Office Of Federal

Contract Compliance

Programs

Under the Vocational Rehabilitation Act of 1973, the agency is to enforce affirmative action for government contractors.

OHuman

Resource

Management

Office Of The

Superintendent Of

Financial Institutions

An executive agency in Canada that is responsible for administering insurance laws for the provinces.

OHuman

Resource

Management

OffsetA provision in tax law in which an insurer is allowed to use the amount paid for one type of tax to decrease another area of tax

liability.

OHuman

Resource

Management

Offset ApproachA method of coordinating defined private pension plan benefits with those of a government plan. The benefits from the private

plan are decreased by a certain percent from the benefits received from the government benefits.

OHuman

Resource

Management

Old Age Security Act

(OAS)In Canada, a law that gives pension benefits to almost all citizens 65 or older.

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OHuman

Resource

Management

Old Age, Survivors,

Disability And Health

Insurance Act

(OASDHI)

A federal law that created Social Security in the United States for the elderly and disabled that includes retirement, survivor and

disability insurance, hospital and medical insurance.

OHuman

Resource

Management

Omnibus Budget

Reconciliation Act Of

1993

Federal legislation that impacts many direct and indirect components of pay (such as qualified retirement plan limits),

increases the Medicare tax base, eliminates the deduction for executive pay in excess of $1 million under most circumstances,

and extends the tuition reimbursement exclusion.

OHuman

Resource

Management

OnboardingA relatively new term, it is more far reaching than historical orientation programs It links new employees with team members

very early in the employment process and continuing after the traditional orientation program ends.

OHuman

Resource

Management

On-call PayA nominal amount of compensation provided in return for an employee being available to report to work at employer‘s

discretion. Because the employee is expected to be easily reachable and able to report to the work site on short notice, he or

she is compensated for having restricted personal time.

OHuman

Resource

Management

Ontology A listing of statements written in a resource description framework (RDF).

OHuman

Resource

Management

Open ContractA kind of insurance contract utilized by fraternal benefit societies in which the society's charter, constitution and by laws

become part of the insurance contract.

OHuman

Resource

Management

Open Ended

QuestionnaireA technique used when analyzing a job using a written set of questions that requires a narrative response.

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OHuman

Resource

Management

Open Pay System A compensation program that makes public salary information , including individual wage levels.

OHuman

Resource

Management

operating A focus on action to meet the immediate situation (with a time horizon from minutes to months) that requires standard

procedures and structures with an expectation of prompt, measurable results. Usually it has a relatively clear linkage between

cause and effect and contains much hard data often conveniently available for decision making.

OHuman

Resource

Management

operating efficiency A ratio (percentage) of the actual output of a department as compared to the desired or planned output.

OHuman

Resource

Management

Operating Income A measure of a company's earning power.

OHuman

Resource

Management

Opportunity Cost The cost of spending funds on one investment instead of another.

OHuman

Resource

Management

optimization Achieving the best possible solution to a problem in terms of a specified objective function.

OHuman

Resource

Management

OptionThe right, to buy or sell a specific amount of a given stock, index, commodity, currency, or debt, at a specified price during a

specified period of time.

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Resource

Management

Option A Plan A plan common to universal life insurance where the policy proceeds are equivalent to the death benefit.

OHuman

Resource

Management

Option B Plan A plan common to universal life insurance where the policy proceeds are equal to the death benefit, plus the cash value.

OHuman

Resource

Management

Option Exercise Price The price that will be paid to purchase shares covered by a stock option.

OHuman

Resource

Management

Option Grant Date The date that a stock option term begins and the option become effective.

OHuman

Resource

Management

Option Performance

VestingAn option becomes exercisable during its term based on certain performance objectives.

OHuman

Resource

Management

Option Profit When the price of the shares is more than the exercise price at the time the shares are exercised.

OHuman

Resource

Management

Optional Modes Of

SettlementThe kinds of payments that are available to the insured or the beneficiary instead of a lump-sum payment.

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Management

Optionally Renewable

PolicyA individual health plan that is renewable on the anniversary if the insurer chooses to renew it.

OHuman

Resource

Management

Ordinal

MeasurementsMeasurements that show the rank or order of the items being counted or measured.

OHuman

Resource

Management

Ordinary Income According to the IRS, all income that is subject to ordinary tax treatment.

OHuman

Resource

Management

Ordinary Income Tax An individual's tax they must pay on earnings from all sources of income, except capital gains.

OHuman

Resource

Management

Ordinary Insurance Insurance that is issued to an individual person.

OHuman

Resource

Management

Ordinary Life

InsuranceLife insurance that is available on a somewhat unrestricted maximum death benefit amounts.

OHuman

Resource

Management

Organization For

Economic

Cooperation And

Development (OECD)

An association European countries, Asia/Pacific and North America that share the same principles of market economy,

democracy and human rights.

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Resource

Management

Organization

Manager

Any officer, director, trustee, or person having similar powers or responsibilities in a tax-exempt organization. This person may

be subject to IRS fines under INTERMEDIATE SANCTIONS regulations.

OHuman

Resource

Management

organizational CultureA pattern that emerges from the interlocking system of the beliefs, values and Behavioral expectations of all the members of

an organization.

OHuman

Resource

Management

Organizational

Development (OD)Improving individual and organizational behavior via systems and programs, through training and development.

OHuman

Resource

Management

OrientationThe introduction of employees to their jobs, co-workers, and the organization by providing them with information regarding

such items as policies, procedures, company history, goals, culture, and work rules. Similar to Induction.

OHuman

Resource

Management

Original Age

Conversion

Changing a term life policy into a whole life policy at a premium rate based on the age of the policyholder at the time the term

policy was purchased.

OHuman

Resource

Management

Original Equipment

Manager (OEM)Takes integrated products of another manufacturer makes them into a final product.

OHuman

Resource

Management

OSH Occupational health and safety – the law relating to the health and safety of personnel at work.

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Resource

Management

Out Of Plan ServicesHealthcare providers that are not participating in a health plans network, therefore the insurer would require higher co pays or

deductibles.

OHuman

Resource

Management

Out Of Pocket LimitThe dollar amount that an employee is responsible for paying for medical care during a certain period of time, usually a

calendar year, then the insurer pays 100% once the out of pocket limit has been paid.

OHuman

Resource

Management

Outliers A Medicare patient that has an illness that is unique and not able to be classified in one of the diagnostic groups.

OHuman

Resource

Management

OutplacementA benefit offered by the employer to displaced employees which may consist of such services as job counseling, training, and

job-finding assistance.

OHuman

Resource

Management

Outplacement

Assistance

Counseling to employees that have laid off that can include assistance in regaining self confidence, teaching job search skills,

resume preparation and ultimately finding a new position.

OHuman

Resource

Management

Outside DirectorA member of the board of directors that is not an active employee, or a retired employee or conducts business with the

company for which he is a board member.

OHuman

Resource

Management

Outside Payroll Refers to costs of benefits that do not include the company's direct payroll.

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Resource

Management

OutsourcingA contractual agreement between an employer and an external third party provider whereby the employer transfers

responsibility and management for certain HR, benefit or training related functions or services to the external provider.

OHuman

Resource

Management

Outstanding Premium Premium that is required on or prior to the policy statement, but has not been received by the specific date.

OHuman

Resource

Management

Over Insurance

Provision

In individual health insurance, the policy will specify that under certain situations the benefits will be reduced if the employee

has more insurance that what is necessary to pay for medical expenses, or in the event that disability income may exceed the

insured's predisability earnings.

OHuman

Resource

Management

Over RetainedAn occurrence in which an insurance or reinsurance organization has approved an amount of insurance that exceeds the

company's usual capacity for a specific risk.

OHuman

Resource

Management

Over The Counter Securities in companies that that are publicly traded, however are not on one of the enacted stock exchanges.

OHuman

Resource

Management

Overfunded Pension

PlanA defined-benefit pension plan that the assets have surpassed the company's current and projected future liabilities.

OHuman

Resource

Management

Overlap The degree by which there is overlap in adjacent pay ranges.

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Management

Overlapping TerritoryIn the general agency system, the territory that some portion of the area is open to another agent, rather than the general

agent, but the rest of the territory is exclusive to the general agent.

OHuman

Resource

Management

Overriding

Commission

Commission that is earned by the field office manager which is based upon the business that is created by the agents in the

office.

OHuman

Resource

Management

Overtime

Each hour worked in a workweek in excess of the maximum hours applicable. This usually means hours worked in excess of

40 in a workweek. Under the Fair Labor Standards Act of 1938 (FLSA), there is no limit to the number of hours that an

employee may work, either daily or weekly. It simply requires that overtime pay must be paid at a rate of not less than 1½ times

the nonexempt employee‘s regular rate of pay for hours worked over the maximum in a workweek.

OHuman

Resource

Management

Own50% ownership of a value of a stock or at least 50% value of combined voting strength of the various classes of stock each

organization of the group.

OHuman

Resource

Management

Owners Equity Money given to the company owners via an issuance of equity securities and possibly through retained earnings.

OHuman

Resource

Management

Owners Of

CorporationsStockholders.

PHuman

Resource

Management

Package A combination of benefits and wages that employees receive due to collective bargaining.

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Resource

Management

Paid SabbaticalAn executive benefit that allows a paid leave of absence for a predetermined period of time, usually to let the executive to

follow another endeavor.

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Management

Paid-Up PolicyAn insurance policy that has already been paid, therefore no further premium is due for services that are received at a future

date.

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Management

Paired comparisonA ranking technique that compares each job being evaluated individually to every other job in a pair-wise fashion to determine

which job has a higher value. Ranks of jobs are created which can than be pegged to the market via benchmark jobs.

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Resource

Management

Par ValueFor stocks a random number given to a stock that is issued that is obligated by the registration requirements of particular

states. Not all states have a par value for shares.

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Resource

Management

ParachuteAn employment contract that states if there is a change in control of the corporation, there will be an increase or accelerated

payments or vesting or some other rights to the employee once the change is final as stated in the contract.

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Resource

Management

Paramedical ReportA report that is completed by another medical professional such as a technician, or a nurse or a physician assistant after a

medical history and physical examination.

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Resource

Management

Paraprofessional

A trained worker who assists a professional, although not a member of the profession. For example: AA‘s in disciplines like

Accounting and Information Technology, Certified Information Systems technicians, paralegals, licensed paramedics, certified

professional secretaries, CAD-CAM operators, and other similarly technically focused workers who are narrowly specialized

and whose formal credentials fall short of Wage-Hour FLSA Professional Long Test requirements. Typically, these individuals

have successfully completed an extensive course of professional instruction (or the equivalent) beyond secondary school but

short of a four-year college degree.

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Parent And

SubsidiariesOne company is controlled by another company via stock ownership.

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Management

Parent Subsidiary

GroupOne company, the parent company, owns stock in one or more companies called subsidiaries.

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Resource

Management

Pareto chartA bar graph used to rank in order of importance information such as causes or reasons for specific problems so that measures

for process improvement can be established.

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Resource

Management

ParkingA free parking space dedicated to an employee is typically a taxable benefit, however if there is not a market value to the

parking space, not value can be determined.

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Management

Partial DisabilityA type of disability that would prevent an insured from completing the usual occupation on a full time basis, or from completing

some of the duties of that usual occupation.

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Management

Partial Disability

BenefitA disability income insurance policy that pays a flat amount if the insured has a partial disability.

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Management

Partial Plan

TerminationTermination of a pension plan or benefit plan from a specific organization, but not for another.

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ParticipantsAn employee that is currently eligible or will be eligible in the future for the company benefits. A participant may also include a

beneficiary.

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Management

Participating

Insurance Contract

A agreement with the employer group and the insurance company in which the premium due is based upon the actual

premium and utilization of the plan.

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Management

Participating Policy A kind of life insurance policy or annuity where dividends might be paid to the policy owner.

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Management

Participation The amount of individuals given pay increases as a percentage of all of the employees in that group.

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Management

participative

leadership

A style of leadership in which the leader involves one or more employees in determining what to do and how to do it. The

leader maintains final decision making authority.

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Management

Particular WeightIn FLSA exempt employee determinations, factors to consider include, but are not limited to, whether it is part of the

employee‘s job duties to make such suggestions and recommendations; frequency with which such suggestions and

recommendations are made, requested, and relied upon.

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Management

Partnership

Insurance

One type of insurance for businesses that is intended to provide funds to the remaining business partners so that they may

purchase the interest of the business of the disabled or deceased partner.

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Past ServiceThe time of employment prior to a pension policy beginning or being amended or the time before that employee had begun

participating in the plan.

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Management

Pay AdjustmentA general revision of pay raises. The adjustment may be either across-the-board, such as cost-of-living adjustments (COLA),

or spot adjustments for increases in prevailing wage rates.

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Management

Pay As You Go The typical technique for financing social security.

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Management

Pay At RiskA changeable pay policy that is funded by a reduction of base pay that is typically offset by the chance that a larger variable pay

policy will payout when base pay is not at risk.

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Management

Pay CompressionA term used to describe differentials in pay that is too little to be considered equitable. May be applied to the differences

between (1) a supervisors pay and that of a subordinate. (2) The pay of an experienced employee versus that of a newly hired

employee.

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Management

Pay for PerformancePaying employees based upon their performance level. Employees are evaluated via performance appraisals and given raises

based upon their performance ratings. Poorly performing employees have their wages frozen; they are not given wage cuts.

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Management

Pay For Time Not

WorkedAn employee is paid for the time that was not actually worked, such as holidays, jury duty, and personal days.

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Pay GradeThe salary level assigned to a job through a job evaluation system. (See ERI DLC Course 34: Installing Job Evaluation in Your

Organization.)

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Management

Pay In Lieu Of NoticeA pay arrangement for employees that have been terminated that is a continuation of the usual pay and usual benefits after the

last day for a specific period of time.

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Management

Pay PlanA schedule of pay rates or ranges for each job in the classification plan. May include rules of administration and the benefit

package.

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Management

Pay Policy A specific position of a company's pay with respect to the jobs competitive pay at a specific time.

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Management

Pay Policy LineThe level at which the organization decides to set its pay against the external market; usually the midpoint of the salary

structure is set as an estimate of the market going rate.

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Management

Pay RangeThe range of pay rates, from minimum to maximum, established for a pay grade or class. Typically used to set individual

employee pay rates.

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Management

Pay Range OverlapThe degree to which the pay ranges assigned to adjacent grades in a structure overlap. Numerically, the percentage of

overlap between two adjacent pay ranges.

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Pay Range Width The width or spread of a pay range, measured by the ratio: Width = (maximum pay – minimum pay)/minimum pay.

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Management

Pay Satisfaction When an employee thinks that the salary they are paid is fair in comparison to the work they actually perform.

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Management

Pay Steps Specified levels within a pay range. Employees may progress from step to step on the basis of time-in-grade.

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Management

Pay Survey The gathering of data on wages and salaries paid by other employers for selected key classes of jobs or benchmark jobs.

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Management

Payee The individual that benefits are payable to as stated in the supplementary contract.

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Management

Payment Of

Insurance Money Into

Court

In Canada, an insurer can take action if they have admitted liability to fund policy proceeds, however the insurer cannot

determine the appropriate recipient. After the insurer pays the court, they are released of any further obligation under the

policy.

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Management

Payout Frequency The time that incentives are paid. They can be paid weekly, monthly, per quarter, or yearly.

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Payroll Deduction

Plan

A payment method in which the employer deducts the premium from the individual employee's paychecks and sends it to the

insurer.

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Management

PBA Principal Business Activities are IRS definitions of industry classifications.

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Management

Peer appraisalA performance appraisal strategy whereby an employee is reviewed by his/her peers who have sufficient opportunity to

examine the individual‘s job performance.

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Resource

Management

Peer Comparison This is an idea in which results of incentive plans certain financial measures are compared to those of similar organizations.

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Management

Peer Review

Organization

Local physicians that belong to an organization that assist in resolving insurance claims arguments and encourage ethical and

fair behavior in the health care business.

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Management

Penalties In benefits and wages, when a employer does not adhere to the legal requirements they must pay a sum of money.

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Management

Pension A fixed sum of money that is paid to a person that has retired and is entitled to receive the benefit under the pension plan.

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Pension Benefit

Guaranty Corporation

(PBGC)

A federal corporation that insures the benefits of defined benefit pension plans. The PBGC is supposed to ensure that all plan

participants received their vested benefits, even in the event that the pension plan goes bankrupt.

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Management

Pension Benefits

Guarantee Fund

In the Canadian province of Ontario, a fund is created to guarantee that benefits are paid in the event of insolvency of a

pension plan.

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Management

Pension Benefits

Standards Act

Federal legislation in Canada that regulate administration of pension plans for federal employees and other employees that

may fall under this legislative authority.

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Resource

Management

Pension Equity Plan

(PEP)

A kind of defined benefit pension plan that bases its retirement on final pay, however the percentage at a certain rate per year

based upon the individual's age and/or service.

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Management

Pension Fund A fund set up to manage the assets and pay for the pensions of retirees.

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Resource

Management

Pension IndexAn index utilized by the Canadian Pension Plan and Quebec Pension Plan to change the pension payments to incorporate the

effects of inflation.

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Management

Pension PlanA benefit plan that offers retirement benefits from a trust or another fund, via the purchase of insurance or from an unfunded

plan.

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Pension Plans A pension is a monetary benefit to an employee or beneficiary at the time of retirement.

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Management

Pension Trust FundA fund that is made up of money that has been contributed to by both the employer and the employee for pension benefits. A

trustee takes the funds and invests the money, collects the earnings and interest and distributes the benefits.

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Resource

Management

Pension Versus

Lump SumA pension is a retirement benefit that is paid periodically, and a lump sum is paid all at one time.

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Management

Per Capita

Beneficiary

Designation

A beneficiary designation in which the proceeds from a life insurance policy are only shared with the class members who live

longer than the insured.

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Management

Per Cause Deductible A deductible that must be paid for each individual illness or accident before nay major medical benefits will be paid.

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Resource

Management

Per Cause Maximum A medical expense policy maximum amount that will be paid for medical expenses incurred from any specific injury or illness.

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Management

Per Stirpes

Beneficiary

Designation

A beneficiary designation in which the proceeds from a life insurance policy are given to the descendents of the deceased

beneficiary.

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Percent One part of 100.

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Management

Percent Difference The percent that the worth of one item is different from another item.

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Management

Percentage BarA device in the form of a graph that is used to provide a summary of data that depicts percentiles of common interest in the

data in graph form.

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Management

Percentage

ContributionThe total premium that company member would pay or pays to a contributory insurance plan.

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Resource

Management

Percentage Method

Of Withholding

A technique of figuring income taxes that are to be withheld by including wages for a specific pay period to the total wages paid

to date that year.

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Management

Percentage

Participation

A provision of a policy, typically found in major medical insurance, in which the insured employee and the insurer share the

medical and hospital expenses in a predetermined ratio (e.g., 80%:20%), after the deductible is met. Also known as a form of

cost-sharing.

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Management

Percentile

A point on a rank-ordered scale, found by dividing a group of observations into parts in order of magnitude from lowest to

highest. The first percentile approximates the very lowest/bottom number found, while the 100th percentile is the very highest

reported. The nth percentile is the point exceeding n percent of the observations. For example, in test taking, a score equal to

or greater than 55 percent of those earned on an exam is said to be at the 55th percentile.

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Performance

Appraisal

Any system of determining how well an individual employee has performed during a period of time, frequently used as a basis

for determining merit increases.

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Management

Performance Based

Restricted Stock

Restricted shares of stock that are awarded to an executive and are contingent upon the attainment of internal or external

performance goals or an increase in the price of the company stock.

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Resource

Management

Performance Culture A group of averages and attitudes regarding performance in an organization.

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Management

Performance Cycle Job incumbents performance taken on a year to date cycle.

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Resource

Management

Performance

DimensionsPhases of performance that are imperative to an occupation by which the incumbent will be measured.

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Management

performance

efficiency A ratio (percentage) of the actual output of a person as compared to the desired or planned output.

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Management

Performance

Improvement

Performance Improvement Plan when you have identified a performance problem and are looking for ways to improve the

performance of an employee. The Performance Improvement Plan plays an integral role in correcting performance

discrepancies. It is a tool to monitor and measure the deficient work products, processes and/or behaviors of a particular

employee in an effort to improve performance or modify behavior.

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Performance LogA written log that is kept by managers to remember behaviors that were effective and ineffective with regard to certain

performance standards during the appraisal period being measured.

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Management

Performance

Management

A process utilized by managers that is made up of planning an managing performance via observation and providing feedback.

The process also includes bettering performance through development, assessing and rewarding performance.

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Management

Performance

MeasurementAny method utilized to gather data that gives a basis to exercise performance appraisal judgment.

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Management

Performance Period The time period for which performance is measured.

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Management

Performance

planning

A total approach to managing people and performance. Involving setting performance aims and expectations for the

organization, departments and individuals employees.

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Management

performance rating Observation of a person's performance to rate productivity in terms of the performance standard

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Management

Performance Sharing

(Goal Sharing)

A method by which performance is described in terms of specific criteria, and norms are determined along with incentive

awards being made depending upon if the goals have been met.

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performance

standard A criterion or benchmark against which actual performance is measured.

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Management

Performance TargetsJob duties or behavioral goals that are predetermined for an employee to provide a comparison for performance appraisal

purposes.

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Management

Performance Unit

Plan (PUP)

Closely resembles a performance share plan, however the unit value is not related to the stock price. The award payment

could be is stock, cash or a combination of the two.

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Management

Peril The cause of loss, such as earthquake, fire, flood and accident.

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Management

Period CertainAlso known as annuity certain. A contract that states income will be provided for a specified number of years, regardless of life

or death. If an annuitant or insured dies, his or the payments will be made to the beneficiary for the remaining years.

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Management

Permanent And Total

DisabilityA situation that keeps an insured person from performing the job duties of any suitable, gainful employment.

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Management

Permanent CapitalThe capital that a company has that is supposed to be an aspect of a balance sheet for over one year. The capital is to include

non-current liabilities and equity.

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Permanent

TransfereeAn employee that was relocated and is not expected to go back to his home country or relocate to another country.

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Management

Permitted DisparityThe difference between benefit and contribution rates that are allowed for highly compensated and non-highly compensated

participants in a qualified pension plan as legislated by the IRS.

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Management

PerquisiteSpecial benefits, perks, for high level executives and other managerial employees. This income is taxable to the employee.

Some of these perks may include club memberships, legal counseling, and special parking.

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Management

Persistency The retention of business that takes place when an insurance policy stays in force as the result of continuing to pay premium.

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Management

Personal grievanceA complaint brought by one party to an employment contract against another party. See Part 9 of the Employment Relations

Act 2000.

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Resource

Management

Personal Interview

Report

A report that includes a proposed insured's lifestyle, occupation, and economic standing. The report relies solely on the

information reported by the proposed insured.

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Management

Personal Producing

General Agency

(PPGA)

A kind of general agent that is more similar to a broker than to a agency manager. Usually PPGAs are contracted with various

insurance companies and spend their time attempting to sell insurance rather than managing and building an office.

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Personal Producing

General Agency

(PPGA) System

An individual that sells distribution systems who relies upon the use of PPGAs.

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Management

Personal Selling

Distribution System

A system to sell insurance that utilizes salaried or commissioned sales people to prospective insurance purchasers via oral

presentations.

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Management

Person-based PayCompensation programs that base an employee‘s salary on that individual‘s skills or knowledge rather than on the nature of a

rigidly defined job. Types include skill-, knowledge-, and competency-based pay.

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Management

Phantom OptionsOptions on units equal to stock shares, however they are not true shares, or rights to the increase in value of the shares not

including related option rights.

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Management

Phantom Stock (Full

Value)

An incentive plan that is long term in which the participant is given the compensation in cash that is determined by a formula. A

full value plan pays the full value. The formula does not have to include the actual price of the stock.

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Management

Phantom Stock

(Incremental Value)

The concept is similar to the phantom stock full value, however the payment is an appreciation or increase in value as

determined by the formula. The formula does not have to include the actual price of the stock.

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Management

Philosophy A method of translating the current state of a company into real policy action to gain the long term goals of the company.

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Physical Examination

Provision

A provision in health insurance plans that the insurer has the right to have a n insured that has filed a claim be examined by a

physician of their choice and their expense.

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Management

Physical

Examinations -

Employer Assisted

Many times employers will provide the employees with a yearly physical examination, typically at no cost or very little cost to the

employee.

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Resource

Management

Piece RateA direct performance payment based on production by an individual worker. A payment is made for each piece or other

quantity unit of work produced by an employee.

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Resource

Management

Piece WorkAn incentive payment is given for work that has been completed. The pay is dependent upon the amount of items produced or

operations finished.

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Management

Plan AdministratorThe administrator of the plan is the plan sponsor, however someone else can be named as the sponsor in the plan document.

The responsibilities include- 1) managing the plan assets to reduce risk of loss, 2) act on the interests of the beneficiaries, 3)

act accordingly under the terms governing the plan.

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Management

Plan AdvisorA person that the plan trustees might delegate their tasks to. The plan advisor has fiduciary responsibilities, including buying,

selling and managing plan assets. The plan advisor must put in writing that he or she is the plan fiduciary. The plan advisor

must also be a registered investment advisor.

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Management

Plan DocumentA document that states the terms of a pension plan for an employer. The document states the eligibility requirements and the

specific benefits of the plan.

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Plan ParticipantAn individual, such as an employer, a terminated employee or a beneficiary of an employee or terminated employee for which

contributions are made or benefits are earned under a employee benefit plan or a pension plan.

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Management

Plan Sponsor

The party that creates and maintains the plan. This party is either (1) the employer, when the employee benefit plan is

maintained by a one employer, (2) the employee organization, if the plan is maintained by an employee organization, or (3) the

committee or association, joint board of trustees or other equivalent group individuals of the parties involved, if the plan is

maintained by one or more employers and one or more employee organizations.

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Management

Plan TerminationThe benefits of a pension plan profit sharing plan cease voluntarily or due to circumstances. The discontinuation of benefits will

cause assets to be distributed to beneficiaries. If the distributions are not equal to the accrued benefits, the Pension Benefit

Guarantee Corporation will try to assist with the difference.

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Management

Plan Year A period of 12 months for which plan records are kept.

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Resource

Management

plan-do-check-action

(PDCA)

Sometimes referred to as the Shewhart Cycle, for the inventor - Walter A. Shewhart. A four step process for quality

improvement

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Resource

Management

planning A course of action for oneself and others to accomplish goals; establishing priorities and planning appropriate allocation of time

and resources and proper assignment of people to achieve feasible, acceptable, and suitable goals.

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Management

PMSA Primary Metropolitan Statistical Area (PMSA). See METROPOLITAN STATISTICAL AREAS (MSA).

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Point Factor A quantitative occupation evaluation technique that utilizes defined factors and degree levels in each factor.

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Management

Point Of Service

Plans (POS)

Health Plans that are a combination of an HMO and fee for service plan. The individual can choose at the point of service

whether he wants to see a network provider or a non network provider. The co pays and will be vary and deductibles may

apply.

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Resource

Management

PolicyA document that provides evidence of the insurance contract and has the important facts about the agreement between the

insurance carrier and the policyholder.

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Resource

Management

Policy Acquisition

CostsCost that are attributed directly the production of any new business.

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Resource

Management

Policy Anniversary The anniversary of the date that a policy was first issued.

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Resource

Management

Policy ChargeThe amount that will add to the total premium to assist in covering the insurance company's expenses. The charge is the same

and does not take into consideration the size of the group.

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Management

Policy Filing The process of getting legal authorization to sell insurance products in certain areas.

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Policy LoanA loan that is given to a life insurance policyholder by the insurer. The loan cannot exceed the cash value and is secured by the

cash value. When the benefits are paid the pending policy loan against the policy is subtracted from the benefits.

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Management

Policy Proceeds The actual amount that a beneficiary receives from a life insurance policy after all adjustments have been to the death benefit.

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Management

Policy Provisions The statements in a policy the discuss the insurance contract.

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Management

Policy Reserve The assets that ensure the insurer will have the appropriate funds to cover future claims.

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Resource

Management

Policy SummaryUsually a computer printout, this document provides specific legally required information with regard to the certain policy that

the applicant is considering.

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Management

PolicyholderA organization or company that owns a group insurance contract. The policy holder does not have the same rights that a

individual policy owner has with an individual contract.

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Management

Policyowner The person that owns an individual life insurance policy. The policyowner is not required to also be the insured party.

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Pooled TrustA common trust fund generally sponsored by one employer and used to accumulate the assets of different plans of the

employer and its subsidiaries.

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Management

Pooling A practice in group insurance in which the underwriters put several small groups together to create a large group.

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Management

Population A statistical term that takes into account all of the units that are of interest for a certain situation.

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Management

PortabilityThe right of a pension plan participant to transfer already accrued pension benefits under a one plan with one employer to

another employer sponsored plan. The act of transferring is typically tax free.

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Resource

Management

PortfolioSeveral definitions: 1) The products that are offered by an insurance carrier, 2) Investments that are owned or managed an

organization or individual.

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Management

Portfolio MethodA technique in accounting utilized by insurers in that every customer gets the interest rate that is equal to the norm of all of the

assets in the general account.

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Management

PositionThe total of duties and responsibilities of a single employee. The total number of positions in an organization equals the

number of employees plus vacancies. A job is typically made up of several positions that require the same duties at the same

level.

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Positive Correlation When the relationships between x and y are generally the same.

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Management

Post Employment

Benefits

Typically given to executives these employment benefits include other benefits beyond medical and retirement, such as

compensation and a secular trust.

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Resource

Management

Post NoticeA document that an insurer is required to send to an applicant in situations that the insurance company has made a negative

decision based upon information that was received via a consumer reporting agency.

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Resource

Management

Post Retirement

BenefitsAny form of benefits, beyond retirement income, that is provided to its retirees by their employer.

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Management

Power Of AgencyAn insurance agents right to act on the behalf of an insurer. It is created through contracts between and insurer and their

agents.

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Resource

Management

PPOPreferred Provider Organization. A network of healthcare providers that will discount services to individuals or groups that

participate in the particular plan.

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Management

Pre-Admission

Review

An element of the utilization and review system that provides authorization for non-emergency hospitalization, if the insured

person or the insured's physician has received prior authorization.

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Pre-Authorized

Payment System

A payment method that allows a policyowner to sign an authorization to pay insurance premiums. The authorization is two

parts. The first part gives the insurer authorization to withdraw the premium from the insured's account. The second part gives

the bank authorization to allow withdrawals that do not have the insured's signature. If this authorization system is completed

via checks, it is then called the pre-authorized check (PAC) system.

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Management

Predetermination Of

Benefits Provision

A stipulation that is often included in dental policies that states if dental services are anticipated to exceed a certain level the

dentist will need to submit a proposed treatment plan to the insurer so that the insurer can determine what amount they will

cover.

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Resource

Management

Pre-Existing

Condition

Several definitions: 1) In individual medical plans, the condition is an injury that occurred or an illness that was diagnosed prior

to the policy issue date, and in addition was not stated on the insurance application, 2) In group medical insurance the

condition is one in which the employee received medical attention during a certain period of time (typically 3 months), just

before the effective date.

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Resource

Management

Pre-Existing

Condition Provision

A stipulation in many insurance policies that states that the insured must be covered under the policy for a specific time period

before the insurer will pay for benefits resulting from any pre-existing condition.

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Resource

Management

Preference

Beneficiary Clause

Wording in a life insurance policy that states if there is not a specific beneficiary named, that the insurance company will pay

the proceeds according to a list of people included in the policy, in a stated order.

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Management

Preferred BeneficiaryA class of beneficiaries, in Canada, associated with policies given before 1962 that include grandparents, parents, spouse and

grandchildren of the said insured. The policyowner can only change the preferred beneficiary to a non-preferred beneficiary

with the authorization of the preferred beneficiary.

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Management

Preferred Provider

Organization (PPO)

A managed care health delivery arrangement that contracts with certain health care providers and/or health care organizations

to provide comprehensive medical service. Providers provide services at discounted rates to members of the PPO.

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Preferred SharesCapital stock which gives a certain dividend that is paid prior to any dividends are paid to the common stock holders, and that

takes priority over the common stock if the company must liquidate.

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Management

Preferred StockCapital stock which gives a certain dividend that is paid prior to any dividends are paid to the common stock holders, and that

takes priority over the common stock if the company must liquidate.

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Management

Pregnancy Disability

LeaveLeave from the workplace for a specific period of time that is related to disability caused by pregnancy.

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Resource

Management

Preliminary Inquiry

Form

Application that is used if there is a strong possibility that the policy may not be used at a later date or may be issued with a

high substandard so that the premium for the policy will not be acceptable to the applicant.

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Management

Premature

Distribution

A withdrawal prior to the age 59 1/2 from a qualified retirement plan. There are certain circumstances that will allow the

distribution if specific requirements are met. If these requirements are not met there usually is a penalty associated with the

distribution.

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Management

Premium

Several definitions: 1) An amount that is added to a base salary to pay additional monies for situations such as graveyard shift,

working weekends, or working away from home, 2) In an international situation the definition relates to an incentive that is paid

to an expatriate, 3) One payment or a sequence of payments made for an individual or for a group to continue the insurance

policy that is in force.

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Management

Premium Conversion Provision that allows employees to make a contribution, pretax, to an employer sponsored health or welfare plan.

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Resource

Management

Premium Deposits Money that is left on deposit with the insurance carrier to pay for future premiums.

PHuman

Resource

Management

Premium For RiskThe usual amount of presumed additional return on investment that is required by investors when they choose a higher-risk

investment.

PHuman

Resource

Management

Premium Pay Extra pay, beyond the base wage rate, for work performed outside or beyond regularly scheduled work periods.

PHuman

Resource

Management

Premium Receipt Recognition that the insurer has received the initial premium payment.

PHuman

Resource

Management

Premium Receipt

Book

A book with receipts in it that is given the policyowner at the time when a home service agent sells a policy. The book has

prenumbered receipts that the agent signs at the time premium is collected.

PHuman

Resource

Management

Premium Reduction

OptionA life insurance policy dividend option that applies policy dividends toward the payment of renewal premiums.

PHuman

Resource

Management

Pre-Notice Notification to the applicant in advance that the insurance company may make an investigative consumer report.

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Management

Pre-Retirement

CounselingPreparation for the financial and emotional changes that occur during retirement for the employee and the spouse.

PHuman

Resource

Management

Preretirement

Survivor Annuity

A provision in a pension plan that states a certain benefit for a surviving spouse of a vested plan participant if the participant

should die prior to retirement.

PHuman

Resource

Management

Prescribed Annuity

Contract

A type of annuity in Canada that has met the specific criteria set by the Income Tax Regulations to therefore qualify as exempt

from accrual taxation.

PHuman

Resource

Management

Present Value Current value of an amount of money or its value at the beginning of a certain time period.

PHuman

Resource

Management

Present Value FactorThe value that an amount of money that is going to be paid at a later date is multiplied to determine the current value of the

money.

PHuman

Resource

Management

Presumptive

Disability

A state that will cause an insured to be deemed totally disabled, such as loss of two limbs, or total hearing loss, or total

blindness.

PHuman

Resource

Management

Prevailing Wage RateThe salaries that other employers pay for labor in similar markets. These wages rates are typically used with immigration pay

analyses, where General Administrative Letter 2-98 requirements must be met. See www.erieri.com/freedata/hrcodes.

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Resource

Management

Price At ExerciseThe price of a stock at the time a person exercises the option. This act also determines the option price at a time after the

option exercise price is subtracted.

PHuman

Resource

Management

Prima Facie RateIn the United States, that standard premium rate that is suggested by the state regulators for a contributory policy in

organization creditor insurance. An insurance company is not allowed to require more than the prima facie rate when the

contributory organization creditor insurance policy is initially issued.

PHuman

Resource

Management

Primary Beneficiary The individual or parties of a group that are first to receive the benefits once the benefits of an insurance policy become due.

PHuman

Resource

Management

Primary Duty

The principal, main, major, or most important duty that the employee performs. Determination of an employee‘s primary duty

must be based on all the facts in a particular case, with the major emphasis on the character of the employee‘s job as a whole.

Factors to consider when determining the primary duty of an employee include, but are not limited to, the relative importance of

the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee‘s

relative freedom from direct supervision; and the relationship between the employee‘s salary and the salary paid to other

employees for the kind of nonexempt work performed by the employee. (FLSA Section 541.700)

PHuman

Resource

Management

Primary Provider Of

Benefits

Under circumstances when coordination of benefits occurs, the medical expense plan that covers the benefits under this plan

prior to any benefits being paid by another medical expense plan.

PHuman

Resource

Management

Principal Business

Activity (PBA)IRS definition of industry classifications.

PHuman

Resource

Management

Prior Service LiabilityLiability that relates to services that prior to the plan implementation or is attributed to an increase in benefits for services prior

to amendment date.

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Management

PRNPRN Nurses are part-time nurses that work intermittent schedules on an as-needed basis. These employees are typically not

eligible to receive benefits but receive competitive hourly wages and an increased work-life balance.

PHuman

Resource

Management

ProbabilitySeveral definitions: 1)The chance of something occurring, 2) A mathematical term that is the amount occurrences that

something may occur out of a specific amount of occurrences.

PHuman

Resource

Management

Probationary

Arrangements

Where the parties to an employment agreement agree as part of the agreement that an employee will serve a period of

probation or trial after the commencement of the employment. See Section 66 Employment Relations Act 2000

PHuman

Resource

Management

Probationary PeriodSeveral definitions: 1) The duration of time between the beginning of an insured person's disability and the start of the policy's

benefits. (2) The period between employment or enrollment in a program and the date when an insured person becomes

eligible for benefits.

PHuman

Resource

Management

Proceeds The money that the insurer is supposed to pay for a settlement of an endowment policy, an annuity or life insurance policy.

PHuman

Resource

Management

process improvement Activities designed to identify and eliminate causes of poor quality, process variation, and non-value added activities.

PHuman

Resource

Management

Productivity A measuring of an operation's efficiency, typically including a comparison of outputs to inputs.

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Resource

Management

Professional ethics the principles and standards that underlie one's responsibilities and conduct in a particular field of expertise (profession).

PHuman

Resource

Management

Professional in

Human Resources

(PHR)

A designation proving mastery of the HR body of knowledge. Initial PHR certification is provided by the Human Resource

Certification Institute (HRCI); see www.hrci.org. The ERI Distance Learning Center provides PHR recertification credits. See

our Course Credit Map for a list of courses each approved for 1 PHR recertification credit hour.

PHuman

Resource

Management

Professional

Reinsurer

A insurance company whose major line of business is reinsurance. Sometimes the insurance company may only handle

reinsurance.

PHuman

Resource

Management

Profit And Loss

Statement (P&L)

A detailed summary of the income and expenses of a business over a period of time (usually quarterly, semiannually or


PHuman

Resource

Management

Profit Sharing

Pension Plan

A money purchase pension plan in Canada that link employer contributions to company profits. Employers are required to

make a minimum contribution of 1% of employee earnings, even if the company was not profitable. The plan must adhere to

the same legal provisions as pension plans.

PHuman

Resource

Management

Profit Sharing Plan An agreement between an employer and the employees in which the profits of the company are shared with the employees.

PHuman

Resource

Management

ProfitsThe result of selling goods or services for more than the cost of producing them. In investment, profits result from selling a

commodities or securities for a higher price than the cost of purchasing them.‖

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Management

program A significant long-term activity, as opposed to a project. Normally defined as a line item in the organization's budget.

PHuman

Resource

Management

Progressive

Discipline

Progressive discipline is a process for dealing with job-related behavior that does not meet expected and communicated

performance standards.

PHuman

Resource

Management

Progressive Incentive

Formula

An employee rewards plan that increases the incentive as the employee performance exceeds predetermined degrees of

performance.

PHuman

Resource

Management

Progressivity Of

Incentives

An employee rewards plan that increases the incentive as the employee performance exceeds predetermined degrees of

performance.

PHuman

Resource

Management

project An endeavor with a specific objective to be met within a prescribed time and dollar limitation.

PHuman

Resource

Management

Project ManagementAccording to the American Society for Quality (ASQ), project management is, "The application of knowledge, skills, tools and

techniques to a broad range of activities to meet the requirements of the particular project."Promotion The advancement of an

employee from one position to another position that has a higher salary range maximum is called a promotion.

PHuman

Resource

Management

Projected Benefit

Obligation (PBO)

The current value of benefits that have accrued for a defined benefit plan, no future service is assumed however, salary

increases are anticipated.

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Management

Promotion The (re)assignment of an employee to a job in a higher grade or range in the organization‘s job worth hierarchy.

PHuman

Resource

Management

Promotional Increase An increase in an employees salary due to a promotion.

PHuman

Resource

Management

Property InsuranceA kind of insurance that provides a benefit if in the event of theft, accident, fire or another circumstance insured items are lost

or damaged.

PHuman

Resource

Management

Property Plant And

EquipmentNon current assets.

PHuman

Resource

Management

Proposal Form A document in Canada that is provided to a prospective insured with individualized data about the policy and its values.

PHuman

Resource

Management

Prospective Normal

Retirement Age

The pension that is expected to pay at normal retirement age to any employee that has stayed on the job to the specified date

and that employee's salary as it relates to pension is unchanged.

PHuman

Resource

Management

ProspectusA legal document required by the SEC offering securities or mutual fund shares for sale. It must state the offer, including the

terms, issuer, objectives if mutual fund or planned use of the money if securities, historical data, business plan and other

information about the company.

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Management

Prototype Plan A standardized pension or employee benefit plan, created to make drafting plans easier for the plan sponsors.

PHuman

Resource

Management

Provider FraudOne type of medical insurance fraud that takes place with the provider tries to grow his/her own income by sending the

insurance company fraudulent claims.

PHuman

Resource

Management

Provision For Taxes Earnings on a company income statement report item estimating current year tax liability.

PHuman

Resource

Management

Proximate Cause Of

Death

A circumstance that is the cause of an event or a death that begins a chain of events that is not broken that ultimately leads to

death.

PHuman

Resource

Management

Proxy ReportingAn SEC requirement for public corporations to reveal the compensation, in a summary compensation table, of the five highest

paid executives.

PHuman

Resource

Management

Proxy StatementThe SEC requires that publicly owned companies send out a document that alerts shareholders of the annual meeting, or any

other special meetings. The proxy statement will also disclose the issues that will be discussed.

PHuman

Resource

Management

Prudent Expert RuleThe sponsor or manager must abide by the legal requirements in that he/she must display specific standards of prudence and

competence in accounting for the assets in a pension plan as well as investing the funds of the plan.

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Management

Prudent Man RulesCommon law standard that is supposed to be followed by the trustees of funds. The trustee is expected to act faithfully, with

discretion, prudence and intelligence keeping in consideration the probable income and the security of the capital.

PHuman

Resource

Management

Purchasing PowerWhen determining cost of living, an index must be referred to that determines the strength of the dollar for the purchasing of

goods and services.

PHuman

Resource

Management

Pure EndowmentAn amount of money that is only paid to the individuals who remain living for a specific period of time. If they do not live for the

certain time period, they do not receive any of the endowment. This is typically illegal unless it is combined with a form of life

insurance.

PHuman

Resource

Management

Put OptionA stock option contract that gives you the right to sell a specified quantity of the stock at a specified strike price by a specified

expiration date.

PHuman

Resource

Management

PyramidingThe process of taking profits that were accumulated from open positions to purchase additional securities without having to

use cash.

QHuman

Resource

Management

Qualified AnnuityA kind of annuity, in the U.S. that is funded with dollars that are deductible, up to a predetermined maximum from the

depositors gross income the year that funds are deposited.

QHuman

Resource

Management

Qualified BeneficiaryAn individual that is eligible to receive Cobra health care continuation coverage per the Consolidated Omnibus Reconciliation

Act of 1985 due to a qualifying event.

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Management

Qualified CostsThe maximum an employer can deduct for tax purposes for contribution to a welfare benefit fund. It equals the fund's qualified

direct cost and permitted additions to a qualified asset account, minus the fund's after-tax income for the taxable year.

QHuman

Resource

Management

Qualified Domestic

Relations Order

(QDROS)

Court orders from a state domestic court that are deemed qualified by the plan administrator. QDROs allow the employer to

split the retirement benefits of an employee in the event of divorce without breaching ERISA or tax code.

QHuman

Resource

Management

Qualified Joint And

Survivor Annuity (QJ

& S)

In the United States, an annuity from a pension plan that provides pension benefits to continue for the spouse of the retired

person after they have died. The survivors benefit continues throughout the life of the spouse and cannot be less than 50% or

more than 100% of the original benefits for their joint lives.

QHuman

Resource

Management

Qualified Medical

Child Support Order

(QMCSO)

A judgment, decree or order that is issued by a court that requires a group health plan to offer benefits to children of a plan

participant.

QHuman

Resource

Management

Qualified PlanA pension or profit sharing plan that the Internal Revenue Service approves as meeting their requirements. These plans may

have tax advantages.

QHuman

Resource

Management

Qualifying Event

An event that qualifies a participant and dependents to be eligible for COBRA. This event may be a termination of employment

(or a reduction in hours), divorce or legal separation, death of a covered employee, a dependent child's loss of dependent

status, a covered employee's eligibility for Medicare or loss of coverage due to the employer's filing of a bankruptcy

proceeding.

QHuman

Resource

Management

QualityDefinition for the Human Resources Glossary Quality is a measure of excellence; quality defines desirable characteristics of a

product, a process, or a service.

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Resource

Management

Quality managementThe process or system of ensuring that a product or service should do what the user needs or wants and has a right to expect.

There are five dimensions to quality, design, conformance, availability, safety and field use.

QHuman

Resource

Management

Quantitative Job

EvaluationA technique that displays a hierarchy of job worth by examining occupations in terms of certain numerical indexes and factors.

QHuman

Resource

Management

QuartileA value that is divided into four parts. The first part is 25%, the second part 50%, the third part is 75% and the fourth part is

100%.

QHuman

Resource

Management

Quebec Pension Plan

(QPP)A plan that mostly provides retirement funds and LTD income to individuals that reside in Quebec.

QHuman

Resource

Management

Quick Ratio A measure used by company's to determine liquidity. Equals quick assets divided by current liabilities.

QHuman

Resource

Management

Quintiles A value that is divided into fifths.

QHuman

Resource

Management

Quota A predetermined performance objective.

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Management

Quota Setting The process of determining quotas.

QHuman

Resource

Management

Quota Share

Reinsurance Plan

A kind of reinsurance plan that the assuming organization reinsures a certain percent of all risks of a specific type insured by

the granting company.

RHuman

Resource

Management

Rabbi Trust

This nonqualified arrangement, allows the employer to set money aside expressly to pay for excess pensions or deferred pay.

Employers do not take a tax deduction, and the beneficiaries do not pay tax on contributions to the trusts until such time that

they start receiving their money. Although funds are subject to employer's creditors, they are not accessible to current and

future management.

RHuman

Resource

Management

Raise An increase in wages or salary.

RHuman

Resource

Management

Random SamplingA method under which sections of a population are drawn utilizing a procedure by which every member of the population has

an equal opportunity to be chosen.

RHuman

Resource

Management

Random Testing Drug and alcohol tests administered by an employer which selects employees to be tested on a random basis.

RHuman

Resource

Management

RangeSeveral definitions: 1) The difference between the maximum value and minimum value, 2) In reference to a pay grade, the

amount that the maximum pay exceeds the minimum pay.

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Resource

Management

Range PenetrationThe level of an individual‘s pay compared to the total pay range (rather than compared with midpoint, as in compa-ratio).

Range penetration is calculated as:

RHuman

Resource

Management

Range SpreadUsually used to determine individual employee pay, this term refers to range of rates, from the minimum to the maximum for a

particular class or grade of employees.

RHuman

Resource

Management

Ranking Method Of

Job EvaluationA job comparison that results in the ranking of jobs into a hierarchy beginning at the highest and ending at the lowest.

RHuman

Resource

Management

Rate The money rate paid to an employee per hour.

RHuman

Resource

Management

Rate Making The actuarial calculation of rates for insurance products.

RHuman

Resource

Management

Rate Of Return

Method

A technique that compares the price for life insurance when the important figure is the annual percentage rate that represents

the rate of return.

RHuman

Resource

Management

Rate RangeUsually used to determine individual employee pay, this term refers to range of rates, from the minimum to the maximum for a


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Management

Rated PolicyAn insurance policy that covers a person classified as a greater than average risk of loss. The policy's premium rate may be

higher than the rate for a standard policy or the policy is issued with special limitations or exclusions or both.

RHuman

Resource

Management

Rating ClassesThree various techniques that insurance companies use for mortality assumptions to determine group life premiums. The

methods are rating are: experience rates, manually rated and blended.

RHuman

Resource

Management

Rating ManualA manual used by underwriters, for determining premium, that includes suggested ratings and very little background for the

impairments listed.

RHuman

Resource

Management

Ratio A value that is divided by another value.

RHuman

Resource

Management

Ratio Measurements Measurements that show how much or the amount of a quality or an item is being measured.

RHuman

Resource

Management

Real Wages Earnings that are deflated by a price index. Utilized as an index of the purchasing strength of the dollars received from salary.

RHuman

Resource

Management

Reasonable And

Customary ChargeThe typical charge made by providers of similar ability for a similar service in a particular geographic area.

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Resource

Management

Reasonable

Compensation

Reasonable compensation is a term used by the IRS to define the compensation amount that is a deductible business

expense. The issue comes up because stockholder-employees can alter their wages and income distributions to avoid taxes.

Under IRC 162 (a), wages are a deductible business expense to the extent wages are reasonable. In an S Corporation, under-

payment of wages occurs in order to maximize pass-through income and avoid payment of FICA and Medicare contributions.

In a C corporation, wages are maximized and dividends eliminated or minimized to avoid the double taxation of dividends.

RHuman

Resource

Management

RebatingA sales practice in insurance sales that is typically forbidden. Rebating occurs when a sales agent offers the applicant an

incentive to buy the policy. The rebate is typically a percentage or a dollar figure of the agent's commission.

RHuman

Resource

Management

Rebuttable

Presumption of

Reasonableness

The rebuttable presumption of reasonableness is a procedure that, once properly invoked, shifts the burden of proof regarding

unreasonable compensation to the IRS for purposes of intermediate sanctions excise-tax penalties. Simply put, the

presumption is established when: (1) the board or authorized committee, free of any conflict with the executive in question,

determines the compensation arrangement prior to effectuating the arrangement, (2) the board or committee uses appropriate

compensation comparability data in arriving at its decision and (3) the board or committee properly documents its decision in a

timely manner.

RHuman

Resource

Management

ReclassificationThe (re)assignment of a job to a higher or lower grade or range in the organization‘s job worth hierarchy due to a job content

(re)evaluation and/or significant change in the external labor market going rate for comparable jobs. (See WAC 251-01-355 -

Reallocation)

RHuman

Resource

Management

RecognitionRecognition is providing attention or favorable notice to another person. Recognition can be written, verbal, or monetary. In the

workplace, the second purpose for employee recognition is to communicate and reinforce the behaviors and actions you'd like

to see the employee do more often.

RHuman

Resource

Management

Recognition Program A process in which employees efforts and successes are recognized.

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Management

Recording MethodThe process of changing the beneficiary in a life insurance policy in which the policyowner provides a written statement to the

insurance company.

RHuman

Resource

Management

Recovery BenefitA residual or partial disability benefit that is to be paid upon satisfaction of the company's elimination period, and the employee

experiences another loss of earnings due to a previous partial or total disability.

RHuman

Resource

Management

Recruiter

Recruiters are employed by a company for the purpose of finding and qualifying new employees for the organization. Third

party recruiters are subcontracted to by a company for the same purpose. Several different types of third party recruiters exist,

but the main difference between them lies in how they are compensated, up front or by a company-paid percentage of the

hired person's first year pay.

RHuman

Resource

Management

Recruiting

consultancy agency

A recruiting firm is a firm that identifies and helps to procure employees for hiring firms. In contrast to a standard staffing firm, a

recruiting firm does not typically place employees within the hiring firm and assume the administrative duties associated with

the employees, such as payroll taxes, insurance, etc.

RHuman

Resource

Management

RecruitmentThe process of bringing into an organization personnel who will possess the appropriate education, qualifications, skills and

experience for the post offered.

RHuman

Resource

Management

Recruitment BonusesReward payments that are given to new employees to entice them to accept the job offer. The rewards may be paid at the time

the employee begins the employment, or over a pre-agreed upon period of time.

RHuman

Resource

Management

Red Circle RateAn individual pay rate that is above the established range maximum assigned to the job grade. Hence, the incumbent is

usually not eligible for further base pay increases until the range maximum surpasses the individual pay rate.

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Management

Redundancy The act of dismissing an employee when that employee is surplus to the requirements of the organization.

RHuman

Resource

Management

Re-Enlistment Bonus A monetary incentive paid to an expatriate to stay on the current assignment longer than initially expected.

RHuman

Resource

Management

Referral BonusPayments that are given to existing employees who recruit new employees as long as the new employee remains employed for

a specific period of time, or for a new client that produces new revenue for the organization.

RHuman

Resource

Management

Refund Annuity A life insurance annuity that specifies that if nothing else, the purchase price will be paid in benefits.

RHuman

Resource

Management

Regional Director Of

Agencies (RDA)An employee at the insurance company that is responsible for assigning PPGAs for company representation.

RHuman

Resource

Management

Registered Pension

PlanA pension plan in Canada that meets the Canadian Minister's National Revenue requirements.

RHuman

Resource

Management

Registered Reinsurer A reinsuer in Canada that is licensed to receive reinsurance in certain jurisdictions.

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Management

Registered

Representative

An individual who has passed the series 7 and series 63 exams and then sells securities and has the legal power of an agent.

This representative will typically work for a brokerage firm licensed by the NASD, NYSE and SEC.

RHuman

Resource

Management

Registered

Retirement PlanA pension plan in Quebec that has been approved and registered by the Quebec Department of Revenue.

RHuman

Resource

Management

Registered

Retirement Savings

Plan (RRSP)

A policy in Canada that lets Canadian citizens to create tax-sheltered accounts to accrue money for retirement.

RHuman

Resource

Management

Regressive Incentive A decreasing incentive rate as performance surpasses previously determined levels.

RHuman

Resource

Management

Regular Rate Of PayThe total compensation that is utilized to determine the overtime rates according the Fair Labor Standards Act. The regular

rate for an hourly employee is the hourly pay rate plus some other forms of compensation received by the employee.

RHuman

Resource

Management

Reinforcement

TheoryA behavior theory that hypothesizes that employees will act in ways that provide rewards as opposed to punishment.

RHuman

Resource

Management

ReinstatementA life insurance company restoring the life insurance benefits of a policy that had been terminated due to nonpayment of

premium.

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Resource

Management

Reinstatement

Provision

A provision in a life insurance policy that states the terms the policyowner must comply with in order for the insurance company

to reinstate a terminated policy due to nonpayment of premiums.

RHuman

Resource

Management

ReinsuranceA method utilized by insurance companies to distribute insurance risk when one organization has accepted part of the risk for

insurance underwritten by a different organization to share in the premium.

RHuman

Resource

Management

Reinsurer An insurance carrier that provides reinsurance policies to other carriers.

RHuman

Resource

Management

Relation Of Earnings

To Insurance Clause

A part of some individual disability policies that places a limitation on the benefit that an insurance company pay if the total

disability benefit from all insurers is more than the insured's earnings.

RHuman

Resource

Management

Relative Value

ScheduleA surgical procedure schedule that describes the costs for surgical procedures in units as opposed to dollars.

RHuman

Resource

Management

Reliability Refers to the reproducibility of results with any criterion or method. Also see validity.

RHuman

Resource

Management

Religious

Discrimination

The failure of an employer to make a reasonable accommodation to allow the employee or employees to observe a religious

holiday or practice, except in the event that the employees absence would create hardship on the employers business.

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Resource

Management

Relocation Premium A lump sum of money given to an expatriate to help with the unusually expensive costs associated with relocation.

RHuman

Resource

Management

Remembrance FundsA fund that provides items such as obituary notices, flowers or small gifts in the event of illness, termination, hospitalization, or

death for the employee or for a member of the employees family. This fund is exempt from reporting for ERISA purposes.

RHuman

Resource

Management

Remote-Site-

AllowanceA specific type of payment that is given to an employee if a work site is difficult to reach or isolated.

RHuman

Resource

Management

Remuneration The sum of the financial and nonfinancial value to the employee of all the elements in the employment package.

RHuman

Resource

Management

Remuneration Loss

Replacement

Remuneration Loss Replacement Plans cover employees from wage loss due to: 1. sickness and injury, 2. weekly indemnity,

3. short-term disability, 4. long-term disability. The employers contributions to these plans are not a taxable benefit to the

employee. However, receiving benefits under the plan is a taxable benefit to the employee.

RHuman

Resource

Management

Remuneration

Strategy, Philosophy,

Policy

The characteristics that assist in the administration and implementation of a remuneration plan at a company.

RHuman

Resource

Management

Renewable Term

Insurance

A kind of term insurance that includes a renewal clause that at the end of the term the insured can renew the coverage without

going through evidence of insurability.

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RHuman

Resource

Management

Renewal CommissionCommissions that are paid to an agent for a certain period of years, typically nine, after the initial policy year. The renewal

commission rates are typically lower after the first year, and commission is only paid on the policies that remain in force.

RHuman

Resource

Management

Renewal Premiums Premiums that are payable after the first premium payment.

RHuman

Resource

Management

Renewal ProvisionSeveral definitions: 1) A stipulation in an individual health policy that discussed the conditions upon which the insurer will not

renew coverage, can cancel coverage or can increase the premium, 2) An individual life insurance policy stipulation that allows

the policyowner to continue coverage at the end of the term without going through evidence of insurability.

RHuman

Resource

Management

Renter's Buying

PowerThe salary equivalent after taking into account the cost of living in the region.

RHuman

Resource

Management

Replacement The giving up of an insurance policy or a part thereof in order to purchase another.

RHuman

Resource

Management

Replacement chartsA summarization in visual form the numbers of incumbents in each job or family of jobs, the number of current vacancies per

job and the projected future vacancies. See Succession planning.

RHuman

Resource

Management

Reportable Event

Several definitions: 1) This is a term used in the United States and it means an event indicating that a pension plan may be

deteriorating financially, to the extent that the plan could be terminated. Events such as those have to be reported to the

Pension Benefit Guaranty Corporation (PBGC). (2) An occurrence, the result of which is that a defined-contribution is materially

changed or that a defined-benefit plan is changed materially. This event may be a change of formula, an acquisition or a

divestiture.

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Resource

Management

RepresentationThis is a statement or declaration by an individual making an insurance application, upon which the insurance company bases

its decision.

RHuman

Resource

Management

Request for proposal

(RFP)A document an organization sends to a vendor inviting the vendor to submit a bid for a product or, service.

RHuman

Resource

Management

Required ReservePeculiar to Canada, this is a reserve, which the insurer is obligated to maintain by the department of insurance in the province

in which the insurer operates and or by a foreign jurisdiction, if that is where the insurance company operates.

RHuman

Resource

Management

RescissionA remedy in equity under which an insurance company may void an insurance contract or have it declared null and void. A

rescission is typically granted in a situation where there has been a misrepresentation, deemed to be material, on the

insurance application. See Representation.

RHuman

Resource

Management

Reservation Wage

People make decisions, not by evaluating all alternatives but by developing a model in their head of an acceptable solution.

Doing this creates a situation in which economists state that wages are ―noncompensatory.‖ This means that there is some

wage below which job seekers will NOT accept a particular job offer. This is the reservation wage. Other factors will not

substitute for this amount. This wage may or may not be related to the going wage.

RHuman

Resource

Management

ReserveSeveral definitions: 1) Usually, this is an account, which establishes the amount needed to pay future claims. (2) If used in

terms of Life Insurance, 'Reserve' refers to policy reserve. (3) In terms of investments, 'reserve' includes savings, social

security payments, investment portfolios and insurance. See also policy reserve.

RHuman

Resource

Management

Reserve For Future

Contingent Benefits

In terms of health insurance, this is an amount established as reserve for claims, which though may already have been

incurred may be dependent on the happening of a future event, which may be beyond the control of the insurance company.

May also be for deferred maternity benefits.

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RHuman

Resource

Management

Reserve

Strengthening

This is the process whereby additional policy reserves are set up, using a formula determined in a disability income policy. The

percentage of income lost is usually what determines the amount of the benefit. See partial disability benefit.

RHuman

Resource

Management

Resisted ClaimThis term is used to describe a claim, which the insurance company has refused to pay but which it may have to pay at a later

date.

RHuman

Resource

Management

ResourceAn Internet term, which may be used to refer to a wide variety of things (e.g., a Web page, part of a Web page, computer

devices, people, or other entities).

RHuman

Resource

Management

Resource Description

Framework (RDF)A computer framework that is easily understood by computers, that is utilized to express what terms and concepts mean.

RHuman

Resource

Management

respect

The regard and recognition of the absolute dignity that every human being possesses. Respect is treating people as they

should be treated. Specifically, respect is indicative of compassion and consideration of others, which includes a sensitivity to

and regard for the feelings and needs of others and an awareness of the effect of one's own behavior on them. Respect also

involves the notion of treating people justly.

RHuman

Resource

Management

Responsibility A duty or set of duties describing the main objective or the reason for a job existing.

RHuman

Resource

Management

Rest-And-Recreation

Leave

Considered to be distinct and separate from regular vacation and or home leave, this is time off, which is granted to expatriates

from time to time especially to those working in areas where living conditions are very difficult.

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Restricted StockThis is stock given to an employee or which is sold to an employee at a discount. The employee is typically prevented from

selling or otherwise disposing of the stock for a specified period. The employee, owns any dividends deriving there from but if

he or she should leave the company before the period of restriction, then he or she forfeits the stock.

RHuman

Resource

Management

Restrictive covenantA contract clause requiring executives or other highly skilled employees to refrain from seeking and obtaining employment with

competitor organizations in a specific geographical region and for a specified period of time.

RHuman

Resource

Management

RestructuringDescribes any number of methods of reorganizing a company resulting in dramatic change within the company. Benefits are

usually short term but may be long term and the main objective is typically to discourage take-over bids.

RHuman

Resource

Management

Result ClauseThis clause, when found in an employment contract, is there to exclude benefits from being paid on losses caused by acts

related to war. May also be known as war-hazard exclusion.

RHuman

Resource

Management

Retained Asset

Account (RAA)

Established by insurance companies for the beneficiaries of life insurance, this is a money market checking account, which

bears interest.

RHuman

Resource

Management

RetentionSeveral definitions: 1) In terms of reinsurance, this describes the risk that the insurance company/the ceding company keeps.

(2) In terms of a company's insurance agreement, this is the part of the premium, which the company keeps for the purpose of

covering expenses, charges, risks and contribution to the surplus.

RHuman

Resource

Management

Retention BonusRetention Bonus is typically used for positions that experience high levels of turnover, such as nurses. The Retention Bonus is

paid in a lump sum at the end of a specified period of employment such as 6 months or one year.

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Retention LimitThis is the limit of risk that an insurance company will assume, without ceding a part of the risk to another company, on any

individual.

RHuman

Resource

Management

Retired Lives

Reserve

A fund set up by some employers into which they pay monies on the behalf of employees, throughout the period of their

employment, for the purpose of providing life insurance to the employees upon their retirement.

RHuman

Resource

Management

Retiree Benefit

Reserves

In order to protect retirement benefits and to reduce non-funded liabilities of the company, many companies create reserves for

payment of future health and insurance obligations.

RHuman

Resource

Management

Retro PremiumThis is an amount agreed upon by the insurance company and the owner of the policy at the beginning of the paying period but

which is to be paid at the end, if and only if the insured party's claim experience calls for it.

RHuman

Resource

Management

Retroactive Disability

BenefitBenefits payable at the on-set of disability but whose first payment does not occur until after a specified elimination period.

RHuman

Resource

Management

Retrospective

Premium

Arrangement

An insurance arrangement where, the insurance company's margin / cut is waived from the premium but the insurance

company still maintains the right to 'call' the margin up to a certain percentage, depending on the insured's claim experience.

RHuman

Resource

Management

Retrospective ReviewAn aspect of a utilization review system, which provides the insurance company with reports, periodically, on the practice

patterns of physicians and the average lengths of hospital stay.

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Retrospective-Rating

Arrangement

A type of funding for insurance agreements, in which the insurance company collects a percentage of the due premium from

the insured party at the beginning of the payment period and the remainder is collected at the end, unless the insured party's

claim experience is better than anticipated.

RHuman

Resource

Management

Return On Assets

(ROA)

This term describes the ratio of net income to total assets of an organization. This is a major financial measure, which is

sometimes used as a determining factor in the establishment of incentive plans.

RHuman

Resource

Management

Return On Capital

Employed (ROC,

ROTC, ROCE)

Represents a companies earnings before interest and tax divided by capital employed plus short term borrowings minus total

intangibles. ROCE takes into account all the assets employed in the course of business including loans and measures the

return the company made on them. If a company has a low ROCE, it is using its resources inefficiently, even if it has a high

profit margin.

RHuman

Resource

Management

Return On Equity

(ROE)

Frequently used as an incentive plan measure, this is a term employed to describe returns due to shareholder by aligning

profits to the equity of stockholders.

RHuman

Resource

Management

Return on investment

(ROI)A ratio of the benefit or profit derived from a specific investment compared to the cost of the investment itself.

RHuman

Resource

Management

Return On Net

Assets (RONA)

This is a way of measuring the overall earning power and or profitability of a company. It is the ration of the total assets (minus

liabilities) to the net income. May be used as a measure for executive incentive plans. Compare with ROC and ROTC.

RHuman

Resource

Management

Return On Sales

(ROS)

Sometimes used to establish executive incentive plans, this is an important financial measure, which represents the ratio of net

income and sales.

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Return On Selected

(Or Employed)

Assets (ROSA,

ROEA)

This is a term employed to describe the ratio of the net earnings of a company to the assets, which are relevant to those

earnings. This is an important measure, which is sometimes a criterion in incentive plans for the executives of a company.

RHuman

Resource

Management

Return On

Shareholders' Equity

(ROSE)

Frequently used as an incentive plan measure, this is a term employed to describe returns due to shareholder by aligning

profits to the equity of stockholders.

RHuman

Resource

Management

Revenue Money, which is generated by a company form the sale of their services or goods.

RHuman

Resource

Management

Revocable

Beneficiary

A term employed to describe a beneficiary to a life policy whose rights as beneficiary does not vest for so long as the insured

party is alive and who may be cancelled at any time (during the life time of the party insured).

RHuman

Resource

Management

Revocable TrustA revocable trust is one that may be cancelled at any time by either the grantor or by another person. Unlike the irrevocable

trust, estate taxes are not avoidable with the revocable trust. See revisionary trust and vivos trust.

RHuman

Resource

Management

Rewards System

As more companies look for better ways to attract, retain and motivate good employees, in a competitive labor market, the

pressure is growing to get rid of the old methods of compensation (which focuses on money and nothing else) and for new

methods to be developed (which would be varied and which would encompass more). As much as money is important, it has

been shown that both job seekers and employees value advancement possibilities, emotional rewards and learning and rank

those highly on lists of today's best companies attribute list. The reward system is a compensation method/package, which

includes all of those attributes.

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Resource

Management

RiderAlso known as an 'endorsement', this is an amendment made to an insurance contract, which then becomes part of the

agreement by expanding or by limiting the existing terms.

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Right Of SurvivorshipA clause, which is sometimes included in transfers / assignments of life policies, providing that, should an assignee die, his or

her survivors are entitled to his or her part of the transfer / assignment.

RHuman

Resource

Management

Right to manage The ‗right‘ of management to make decisions and to run an organization without interference from external or internal forces.

RHuman

Resource

Management

RightsizingThis is the term used to describe the elimination of non-essential / redundant positions in order to reduce the size of the work

force to the smallest possible size that it can be without negatively affect operations. The employees who are not laid off at the

end of this process are known as residual employees.

RHuman

Resource

Management

Risk ClassIn organizational insurance, these are groups of insureds that represent ostensibly similar risk, in the eyes of the insurance

company. The most common classes of risk are, standard, substandard, preferred, non-smoker and uninsurable.

RHuman

Resource

Management

Risk In Insurance This is the fact that the occurrence of loss of or lack there of is uncertain.

RHuman

Resource

Management

Risk managementThe use of insurance and other strategies in an effort to minimize an organization‘s exposure to liability in the event a loss or

injury occurs.

RHuman

Resource

Management

Risk PremiumThis is a term used to describe the reward for accepting an investment considered to be risky (an investment with greater risk

than the U.S. Treasury Securities). See premium, risk premium and Capital Asset Pricing Model.

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Risk-Free Rate Of

Return

U.S. Treasury Securities are considered to be risk free and so this term would be used to describe the yield / gain on U.S.

Treasury Securities. A risk-free rate pf return is frequently used to determine the cost of capital.

RHuman

Resource

Management

RolloverThis is the process of re-investing distribution from one qualified plan of a prior employer to another or investing it in an

individual retirement account (IRA). Roll-overs are tax -free transfers of account balances.

RHuman

Resource

Management

Room and BoardTo receive room and board or transportation benefits tax free the employee must: (1) be on temporary assignment, (2) must

have a permanent residence elsewhere, (3) this residence must be available for his/her use, (4) the work site be too far to

return to nightly, and (5) must be on assignment for over 36 hours.

RHuman

Resource

Management

Roth Individual

Retirement

Beginning in 1998, taxpayers can make nondeductible contributions of up to $2000 a year into a new Roth Individual

Retirement Account

RHuman

Resource

Management

Rucker Share Of

Production PlanA program whereby certain cost savings resulting from an employee's effort will be shared with all employees.

SHuman

Resource

Management

Safe HarborSafe harbors are regulations that describe certain acts or behaviors, which are not illegal under a specific law, even though

they might otherwise be illegal.

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Resource

Management

Safety MarginIn terms of life insurance, this is the amount the probability of mortality (per age) is increased by actuaries in mortality tables.

The safety margin provides the insurance company with added security incase of an adverse experience.

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SalariedThis is the compensation, which is received by an employee, weekly, monthly or yearly as opposed to an hourly pay. Typically,

this applies to employees of higher levels with non-repetitive jobs that may or may not be supervisory in nature. These

positions are exempt from the Fair Labor Standards Act provisions.

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Resource

Management

Salaried Sales

Agents

These sales representatives are actual employees of the insurer and their compensation is typically a combination of a base

salary plus commission. Salaried sales agents may work independently or they may work with other agents. They may make

direct sales or they may promote the insurer's product by pitching sales to middlemen. May also be known as salaried sales

representatives.

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Resource

Management

Salaried Sales

Distribution System

A method of distribution method, which uses the salaried employees insurance companies to sell and to service insurance

policies. Salaried sales staff may either work independently or they could work with agents and are frequently used for the

distribution of organization insurance products.

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Management

SalaryThis is the compensation, which is received by an employee, weekly, monthly or yearly as opposed to an hourly pay. Typically,

this applies to employees of higher levels with non-repetitive jobs that may or may not be supervisory in nature. These

positions are exempt from the Fair Labor Standards Act provisions.

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Resource

Management

Salary BudgetMoney designated, over a specific amount of time, with which to pay salaries. When structure adjustments and or individual

employee adjustments are being planned, the salary budget must be taken into consideration.

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Resource

Management

Salary CompensationCash payments made to an individual for services during a given year. These are payments made to employees in direct

exchange for their contributions to an organization. They do not include bonuses, stock options, life insurance, 401(k) plans, or

other benefits.

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Resource

Management

Salary Continuation

Plan

A sick leave and or disability plan providing for employees to receive up to 100 percent of their salary for a certain amount of

time, should they become sick or disabled.

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Salary IncreaseThe difference between an organization's current pay and what it plans to pay in the future. Salary increases can be given

based upon merit (such as pay for performance), cost-of-living increases, or matching what competing organizations pay. In

the latter case, wage surveys are used to determine the amounts of salary increases.

SHuman

Resource

Management

Salary Increase

Budget

Salary increase budget represents the difference, which exists, between a company's current pay and the goal it has or where

it foresees its pay levels reaching in the future.

SHuman

Resource

Management

Salary RangeUsually used to determine individual employee pay, this term refers to range of rates, from the minimum to the maximum for a


SHuman

Resource

Management

Salary Reduction

Plan

Salary reduction plans are ones in which deductions are made from the employees salary prior to the calculation of income for

tax purposes.

SHuman

Resource

Management

Salary StructureThe structure of job grades and pay ranges established within an organization. The salary structure may be expressed in

terms of job grades, job evaluation points or policy lines.

SHuman

Resource

Management

Salary Structure

Change

This term is employed to describe the adjustment of a wage structure. Typically, it is expressed as the average percentage

change between the range midpoints of the old structure and the new structure.

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Resource

Management

Salary SurveysSalary surveys are used by organizations to determine what the 'market rate' is for jobs or skills used in their organization.

Paying a competitive wage is important for attracting and maintaining an adequate workforce.

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Salary-Reduction

Plan

This is available in most companies and is a system where the employee has to the option to ask pay-roll to reduce the his or

her cash compensation and for the company to contributed the difference to the employee's pension plan, insurance plan or

any other benefit plans available to employees.

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Resource

Management

Sale Of Stock This is the exchange of shares in return for its cash value.

SHuman

Resource

Management

Sales Money, which is generated by a company form the sale of their services or goods.

SHuman

Resource

Management

Sales Channel A resource with which to access potential customers.

SHuman

Resource

Management

Sales CompensationThis is the amount, which is paid to members of the sales team of a company. This amount typically varies according to the

degree to which individual representatives attained or surpassed their set goals.

SHuman

Resource

Management

Sales Compensation

Plans

Sales compensation plans differ from the other types of compensation plans. Due to the fact that results are measurable in

sales related jobs, compensation for those kinds of jobs are typically incentive (or commission) based. Compensation plans for

sales type jobs may be fall into any of the following categories, Commission only, salary only plans, Commission-plus-draw

plans, Salary-plus-commission plans, and or Salary-plus-bonus plans.

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Management

Sales Cycle This is typically, the time from which a potential customer is identified and the time when the sale was closed.

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Sales Illustration Typically in graphic form, this is a tool used by agents to illustrate the benefits of the insurance policy he or she is trying to sell.

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Resource

Management

Salvage Value The estimated value obtainable for an asset, which has passed its useful life.

SHuman

Resource

Management

Sample

In terms of statistics, this unit, which is representative of a class drawn from and studied in order to estimate the characteristics

of an entire population. A random sample is where each member of the population has the same chance of being chosen.

Convenience sample, on the other hand, is when units are selected, not at random but on the basis of what is easily available

or accessible

SHuman

Resource

Management

Sampling ErrorsThese are possible errors, which may occur due to the lack of complete information in the analysis of jobs. May also be caused

by the misinterpretation of data or answers to survey questions. May be due to bias or the misuse of procedures used in

statistics.

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Resource

Management

Savings (Thrift) PlanSet up by employers, this is plan established for the purpose of systematically providing for capital accumulation by employees,

whereby the employees make a contribution and the employer matches the contribution according to a pre-established rate

and limit. See 401(k).

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Resource

Management

Savings Bank Life

Insurance (SBLI)

This is a type of life policy, which authorized savings banks sell to those who reside and or work within the state in which the

policy is offered. Three states, in the United States, permit SBLI (Connecticut, Massachusetts and New York).

SHuman

Resource

Management

Scanlon PlanThis is a profit sharing program whereby employees share in pre-established cost savings, which are due to employee effort.

Formal employee participation is necessary with the Scanlon Plan, as well as periodic progress reporting and an incentive

formula, all of which are pre-established.

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ScattergramAlso known as a scatter plot, this is a mathematical technique that displays a picture of the existing relationship between any

two variable. It does this by plotting two (x,y) points.

SHuman

Resource

Management

Scheduled Dental

Plan

This is a dental plan that pays fixed amounts of benefits for certain procedures according to a pre-established schedule. See

also combination dental plan and unscheduled dental plan.

SHuman

Resource

Management

Scheduled HoursThis represents the number of hours that an employee is scheduled to work in a given work period as opposed to the number

of hours actually worked.

SHuman

Resource

Management

ScopeThe set of quantifiable job characteristics that ascribe value to a job. Typical characteristics include number of subordinates,

size of budget managed, and sales volume of the organization.

SHuman

Resource

Management

Scope DataThese are particular numbers (usually sales or number of employees) used for selecting appropriate salary survey figures to

determine going rates for a job or organization of jobs.

SHuman

Resource

Management

Screening InterviewScreening interviews are used to qualify a candidate before he or she meets with a hiring authority for possible selection.

Screening interviews are usually quick, efficient and low cost strategies that result in a short list of qualified candidates. These

interviews save time and money by eliminating unqualified candidates via phone or email.

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Resource

Management

SEC

The SEC is the principal federal regulatory agency, which regulates the securities industry. The main function of the SEC is to

promote full disclosure and it exists to protect investors, in the securities market, against practices that are fraudulent and or

manipulative. SEC enforces several acts, including but not limited to the Securities Act of 1933, the Securities Exchange Act of

1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940 and the Investment Advisers Act.

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Sec Management

Compensation

Reporting

The annual reporting to the SEC by publicly traded corporations requires the reporting of the annual salary, bonus, and all

other payments to the company's five top executive officers.

SHuman

Resource

Management

Secondary Source Of

Job Information

This is a term employed, in job analysis, to describe any source of job related information other than the person whose job is

being analyzed and or his direct supervisor.

SHuman

Resource

Management

Second-To-Die Life

Insurance

Life insurance, which insures two people and the benefit is paid after the death of both participants. Typically, this is designed

to make funds available to cover estate taxes. See survivorship life insurance.

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Management

Section 3460In Canada, Section3460 of the Canadian Institute of Chartered Accounts (CICA) contain recommendations relating to

employer's accounting for obligations and pension costs. The recommendation made by Section3460 is that, for defined

benefit plans, the projected benefit method should be the determinant for pension costs for accounting purposes.

SHuman

Resource

Management

Section 401(K) Plan

In the United States, a deferred profit sharing and or stock-bonus plan permitting participants to decide the extent to which their

compensation is deferred. Contributions of participant are not taxable until that time when the funds are withdrawn.

Contributions of sponsor and investment earnings are both also tax-deferred. Also known as Cash or Deferred Arrangement

(CODA).

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Resource

Management

Section 403(B) Plan

This is a type of retirement plan, typically established by certain tax-exempt organizations (i.e., charities, churches and

hospitals). Section 403(b) plans are a creation of congress to serve as incentive to tax-exempt organizations, which ordinarily

would not benefit from the tax advantages of qualified pension plans. The section 403(b) plan enables such organizations to

offer their employees retirement compensation, albeit in a slightly different form. Educational organizations may also set up

section 403(b) plans. May also be referred to as a tax-deferred annuity (TDA) plan or a tax-sheltered annuity (TSA) plan.

SHuman

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Management

Section 415 LimitsThis the limit imposed on the amount of annual contribution that can be made on the behalf of a participant of a defined

contribution plan. There is also a limit placed on the amount of benefits payable to a participant of a defined benefit plan.

These limits are set under Section 415 of the Internal Revenue Code. See contribution limit and maximum benefit.

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Section 79Section 79 of the Internal Revenue Code provides that employer contributions to purchase company term life policy receive

preferential tax treatment. It also lists specifications that a plan is required to meet before being considered a nondiscriminatory

organization term insurance plan for tax purposes.

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Resource

Management

Secular Trusts

A secular trust is a part of a nonqualified deferred compensation plan. In a secular trust, the employer contributes to an

irrevocable trust to provide post-employment benefits to the executive. The executive has a nonforfeitable right to the assets of

the trust at the time the trust is established however, the employee is not entitled to these assets until an event such as the

employee's retirement, death, or termination of employment with the employer.

SHuman

Resource

Management

Securities And

Exchange

Commission (SEC)

The SEC is the principal federal regulatory agency, which regulates the securities industry. The main function of the SEC is to

promote full disclosure and it exists to protect investors, in the securities market, against practices that are fraudulent and or

manipulative. SEC enforces several acts, including but not limited to the Securities Act of 1933, the Securities Exchange Act of

1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940 and the Investment Advisers Act.

SHuman

Resource

Management

SegmentationThis is when an insurer divides general investment accounts into parts, corresponding to the insurance company's prime lines

of business.

SHuman

Resource

Management

Segregated AccountKnown as and called a 'separate account' in America, this is the Canadian version. A segregated account is an asset account

standing apart from the general account of a company.

SHuman

Resource

Management

Select Mortality Table

This table includes data exclusively on people who have recently purchased life insurance. Experience has shown that such

people have a lower mortality rate in the years immediately following their insurance purchase than those who have been

insured for a longer period, probably because they have recently passed a medical examination, and because they are

younger.

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Management

Self-AdministeredA type of benefit plan whereby the company is responsible for the administration of the plan in every way, including the

administration of claims and the investment of assets.

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Self-Administered

Organization

Insurance Plan

In this kind of organization insurance plan, the policyholder and not the insurance company performs the major part of the

administrative work necessary for the plan. The policyholder keeps detailed records of organization membership, handles

routine requests (e.g., for beneficiary changes and name and address changes etc.).

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Management

Self-Administered

Trusteed Plan

This is a retirement plan whereby contributions for the purchase of pension benefits are made to a bank (known as the

trustee), which in turn makes investments with the money and pays benefits to eligible employees from the monies

accumulated and interests earned.

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Resource

Management

self-directed work

team

A small independent, self-organized, and self-controlling group in which members plan, organize, determine, and manage their

duties and actions, as well as perform many other supportive functions.

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Resource

Management

Self-Funding (Self-

Insurance)

A method of funding a benefit plan, where the employer bears the risk for claims. An employer may contract, if it so wishes,

with a third party for it to pay claims on the company's behalf.

SHuman

Resource

Management

Self-Insured

Organization

Insurance

A type of insurance whereby the organization sponsor and not an insurance company, has the responsibility for the payment of

claims made by the insured parties. A company may be completely or partially self-insured. See also administrative services

only (ASO) contract.

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Resource

Management

Self-Insured Plans

There are two parts of any insurance policy. (1) Risk assumption. (2) Processing of the claims. In self-insurance, the

organization itself, takes on the risk of payment, typically by placing money that would have been paid as premiums into a fund

with which claims are paid. Self-insured plans are usually taken on by very large organizations because it would take only one

sizeable claim for a small fund to be wiped out.

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Management

selfless service

the proper ordering of priorities. Think of it as service before self. The welfare of the organization come before the individual.

This does not mean that the individual neglects to take care of family or self. Also, it does not preclude the leader from having

a healthy ego or self esteem, nor does it preclude the leader from having a healthy sense of ambition. It does, however,

preclude selfish careerism.

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Senior Professional in

Human Resources

(SPHR)

A designation for experienced HR professionals provided by the Human Resource Certification Institute (HRCI). See

www.hrci.org for initial SPHR certification. The ERI Distance Learning Center provides SPHR recertification credits. See our

Course Credit Map for a list of courses each approved for 1 SPHR recertification credit hour.

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Management

Seniority A privileged status attained by length of continuous service in a campany.

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Management

Separate Account

As its name implies, this is an account, which is separately maintained from the general accounts of a life insurance company.

The separate account facilitates the management of the non-guarantee insurance product funds. The maintenance of separate

accounts enables insurance companies to modify their investment strategies, while not adversely affecting general accounts

funds. In Canada, this is known as segregated account. See investment-sensitive life insurance and general account.

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Management

Separate Account

Contract

A pension plan funding channel, whereby the assets of the pension are invested through a separate account of the insurance

company. This kind of insurance policy, typically does not offer any guarantees as to investment performance. May also be

known as an investment facility contract.

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Resource

Management

Separate Health

Benefit Account

(401(H))

A method of funding used for health insurance benefits meant for retirees, which is either a part of defined benefit or a defined

contribution plan but in which the funds for the health benefits are held separately.

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Resource

Management

Separate Lines Of

Business

Organizations may seek to have different benefit plans for different segments of the company. They may do this by seeking to

establish separate lines of business. This is done by identifying all the property and services provided to customers during the

testing year and then designating which portion of the property and services is provided by each business. Employers may use

their discretion to determine their lines of business in a manner that conforms to their business operations.

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Management

Separation From

Service

Separation from service is a termination of employment for any reason other than a quit, discharge, retirement, or death,

regardless of the duration of such absence.

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Sequential ExerciseWhen an employee exercises stocks in the same order that he received them, it is known as 'sequential exercise'. Though, no

longer applicable, this was a stock option incentive requirement.

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Management

Service ProvidersService providers are people such as lawyers, accountants, third party administrators, and actuaries. They are not fiduciaries

as long as they stay within professional boundaries. However, fees paid to service providers must be reasonable compared to

the services received.

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Resource

Management

SettlementThe word settlement may refer to various things. An action, revocable in nature, which relieves a plan sponsor of the obligation

to pay pension benefit. See financial benefit.

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Resource

Management

Settlement

Agreement

An arrangement between an insurance company and a policyowner (or beneficiary) relating to the method in which the

insurance company will pay proceeds of the policy to the beneficiary. See settlement options.

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Resource

Management

Settlement Option

PaymentsPayments made, from time to time, by insurance companies, instead of lump sum payments of the proceeds of life insurance.

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Resource

Management

Settlement OptionsThese are the option given to Social Security Disability Income (SSDI) policyowners (or beneficiaries). In America, this is long-

term income program for those who are disabled yet who are under 65 and who have paid a particular amount of Social

Security tax for a specified amount of time.

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Management

seven tools of quality Tools that help an organization understand its processes in order to improve them

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Severance / Benefits

Continuation

This is a term employed to describe the continuation of the salary of an employee after he or she has been terminated, which

is paid either on a continuation basis or in a lump sum. The amount of the severance is typically contingent upon the length of

time the employee served the company.

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Resource

Management

Severance Pay

In most countries, though not the U.S., severance pay is mandatory any time an employee is terminated. The purpose of

severance pay is to soften the blow of unemployment, upon the termination of an employee. Typically, severance pay is equal

to one week's pay for each year worked for the severing company (may be more and it may be less). In the U.S. severance

pay is considered a welfare plans and is subject to the Employee Retirement Income Security Act's reporting, disclosure, and

fiduciary standards. Severance payments are taxable to employees and usually are subject to federal income tax withholding

and FICA.

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Resource

Management

Sex Discrimination /

Sexual Discrimination

Gender is one of the protected groups under the Civil Rights Act. Thus gender, in and of itself, may not be used in a whole

range of human resource decisions regarding employees. In addition, the Equal Pay Act prohibits paying men and women

differently for the same or substantially similar jobs, and Title IX prohibits discrimination by gender in educational institutions.

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Resource

Management

Sexual Harassment

In the United States, Title VII prohibits two kinds of sexual harassment: quid pro quo and hostile work environment. When a

quid pro quo case is proven, employers automatically are liable. Employers are liable only under certain circumstances when

hostile work environment is proven. Quid pro quo cases require that the unwelcome sexual demand on the employee be made

by someone with the ability to grant or deny an employee some benefit. Also, there must be a link between the demand for sex

and the granting or denial of the benefit. Hostile work environment cases must involve pervasive, unwelcome sexually charged

behavior that is directed toward an employee by someone in the workplace.

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Management

Shapes Of

DistributionThis a term employed to describe data, as charted on a graph.

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Resource

Management

Shareholder

Several definitions: 1) In terms of corporations, a shareholder is an individual who owns shares (of stock) in a company.

Ownership of shares of stock comes with the right to dividends when it is declared and voting rights in certain company matters

(e.g., board of directors). (2) May also be an individual who owns shares in a mutual fund. Both my also be known as

stockholder.

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Shareholder

Protection Formula

This is a formula used by companies and which is related to bonus plans whereby a pre-established percent of the profit is set

aside to be distributed to shareholders, before any of it is made available to employees as bonus awards.

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Management

Shareholders' EquityThis is the amount with which a company's assets surpasses its liabilities. It represents the net-worth of a company, its true

value. Also known as Net Worth.

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Resource

Management

Sherman Anti-Trust

Act (1890)

This Federal law was enacted in order to protect the general public from corporate monopolies. This law has, since 1908

applied to Unions, who have used the statute to ensure that competitive wages are paid.

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Resource

Management

Shift Differentials

(premiums)

Extra pay allowances made to employees who work on a shift other than a regular day shift, if the shift is thought to represent a

hardship, or if competitive organizations provide a similar premium. Shift differentials usually are expressed as a percentage

or in cents per hour.

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Resource

Management

Short-Form

Reinstatement

Application

This is an application designed to protect against the re-enrollment of insureds whose conditions have changed dramatically

since the last due date of their premium. This application is typically used for reinstatements, which were requested within a

relatively short period, (e.g., 30 to 90, days after the end of the grace period).

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Management

Short-Term

Assignment

(International)

A term employed by companies to describe assignments, which lasts over three months, known as 'business trip' but less than

a year, known also as 'expatriate assignment'. The premiums which become payable varies from company to company.

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Management

Short-Term Disability

Income InsuranceThis is insurance that provides benefit for both short term and long-term (the first part of long-term) disability.

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Short-Term Disability

Plan

A benefit plan, whose goal is to provide income to employees who are absent from work either through illness or an accident

but only when the employee is expected to return to his or her regular duties within a particular amount of time (typically 6

months).

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Management

Short-Term

IncentivesRewards, which are based on the achievement of short-term goals (typically 12 months or less).

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Management

SIC

The U.S. Standard Industrial Classification (SIC) system is a U.S. federally designed system that identifies companies by

industry with a standard numbering system. It provides other information and is used by securities analysts, market

researchers, and others. The SIC is being replaced by the North American Industry Classification System (NAICS). The current

SIC Division Structure may be found online at www.osha.gov/cgi-bin/sic/sicser5.

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Resource

Management

Sick Leave

Sick leave means providing pay for employees when not working due to illness or injury. It may start on the first day of illness

or after two or three days. In developing a sick leave policy the following points need to be considered: (1) When are

employees eligible? (2) Will proof of sickness be required? (3) What pay schedule will be used and will the employee receive

full pay? (4) How much sick leave can be accumulated and what is done about unused sick leave? (5) May sick leave be used

for taking care of family members?

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Management

Simple Plan First allowed in 1997, this is a kind of qualified retirement plan (IRA or 401(k)) for companies with over 100 employees.

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Resource

Management

Simplified Employee

Pension (SEP)

This is a pension plan that an employer may make contributions retirement income to, using individual retirement annuities or

accounts. Under the SEP employers may directly contribute directly to Individual Retirement Accounts, amounts, which have

been deferred by employees. Typically the SEP is cheaper to operate and therefore most commonly used by employers who

are unable to afford more complex pension plans.

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Management

Simultaneous Death

Act

This law is typically enacted on a state or province level and it provides that, should the insured and the first beneficiary both

die under such conditions that it is not possible to determine who died first, it will be deemed that the insured in fact survived

the first (primary) beneficiary (unless there exists a clause in the policy to the contrary.

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Single Premium

Annuity

This is an annuity, which is purchased with a single, one time payment / premium. May also be known as an immediate or a

deferred annuity.

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Management

Single Purchase

Annuity Contract


deferred annuity.

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Management

Single-Premium

Deferred Annuity

(SPDA)


deferred annuity.

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Management

Single-Premium

Method

This is an insurance premium payment arrangement for plans that are contributory in nature, where at the moment that the

loan is granted, all the premium that will be due for the insurance is paid, up front / in a lump sum by the borrower or added to

the principal amount of the loan. May be contrasted with monthly outstanding balance method.

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Management

Single-rate SystemA remuneration policy under which all employees in a given job are paid at the same rate instead of being placed in a pay

range. Generally applies in situations where there is little room for variation in job performance or skill level.

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Management

Six And Six Exclusion

This is a pre-existing condition exclusion clause typically found in credit disability insurance policies, which provides that a

disability will not be covered if the party insured was treated for the disability during the six months preceding the effective date

of the commencement of coverage. May frequently also provide that an insured party will not be covered if he or she becomes

disabled from the same ailment / condition within six month post commencement of coverage date.

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Management

Skewed DistributionThis is a series of data that is plotted and non-symmetric in nature, which has a tail of extreme values going in a single

direction.

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Skill-based PayA person-based remuneration system based on the repertoire of jobs an employee can perform rather than the specific job that

the employee may be doing at a particular time. Pay increases generally are associated with the addition and/or improvement

of the skills of an individual employee, as opposed to better performance or seniority within the system.

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Management

skills (competencies) Those abilities that people develop and use with people, with ideas, and with things, hence, the division of interpersonal,

cognitive, and technical skills.

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Management

Skills Inventory

Typically used by employment agencies, personnel departments and contract programming companies who wish to set up and

maintain a file for candidates and their associated qualifications. Once all the data is in place and information about a potential

candidate is entered along with particular job requirements, then a search can be done for the candidate or candidates who

meet the requirements.

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Management

SlopeThe slope of the line represents how much each unit change of the independent variable X changes the dependent variable Y.

The slope (m) tells you how hard it would be to run up the straight line, i.e. how steep it is. The larger "m" is, the steeper the

slope. A perfectly horizontal line has a slope of zero. A line that makes a 45-degree angle with its base has a slope of 1.

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Management

SlottingThe process of placing a position / a job into a hierarchy of jobs using other methods of evaluating jobs. This process entails

the comparison of one job to others, already exist in the hierarchy of jobs.

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Management

Small Business Job

Protection Act

(SBJPA)

This statute simplifies pension provision. SBJPA also extends the tax breaks provided by employers for educational

assistance, increases the federal minimum wage, provides special rules on employee/independent contractor determinations,

and allows employers to establish new qualified adoption assistance benefits for employees.

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Management

Small Estates

Statutes

These statutes makes it possible for an insurance company to pay fairly small amount of the policy proceeds to an estate

without having to get involved in court proceedings.

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Small Organization

Insurance Plan

A species of organization life insurance plan, which uses organization underwriting techniques but adds a certain degree of

simplified individual underwriting and is designed to insure groups of 2 to 25 people. Also known as baby organization plan.

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Management

Small-Group

IncentiveAny incentive plan, which focuses, primarily on the performance of a small group (typically a work team).

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Resource

Management

SOC

The SOC is a Canadian system used by statistical agencies to categorize workers into occupational groups so as to collect,

calculate, and disseminate data. Workers will be grouped into a particular classification of occupation (of which there are over

820) depending on their definition. To make classification easier, occupations will be combined so as to form 23 main groups,

96 sub-groups and 449 broad categories of occupations.

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Management

Social benefits FInancial help in time of sickness, old age, or uneployment.

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Management

Social Insurance

Supplement Policy

This is medical expense insurance, which is sold to provide for benefits, which compliment that available from a determined

government health insurance plan.

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Management

Social SecuritySocial Security is a federal government program that is part way between a tax plan and social insurance. Employers and

employees pay payroll taxes to fund its two programs - Old Age Survivors' and Disability Insurance

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Management

Social Security Act The Social Security Act is the Act passed in 1935 establishing the social security system in the United States.

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Social Security

Administration (SSA)

The Social Security Administration is the U.S. government bureau that administers the social security system. There are 12

regional offices, as well as offices in most major cities in the United States.

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Resource

Management

Social Security Level

Income Option

Under this option, employees may chose to have monthly annuity payments (before the age of 62 or 65) increased actuarially

and thereafter, that payments be decreased.

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Management

Social Security Tax

Generally known as FICA taxes, after the Federal Insurance Contribution Act, these taxes are imposed on wages paid to

employees to fund Social Security benefits for employees. Both the employer and the employee must pay FICA tax on an

employee's annual wages from the employer up to the Social Security taxable wage base. This tax is divided into 2

components: Medicare and the Old Age Survivors and Disability Insurance (OASDI) component.

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Management

Sole Proprietor A sole proprietor is the 100% owner of a business, which is not incorporated.

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Management

Sole Proprietorship

Insurance

This is a kind of life insurance on the life of the sole proprietor of a company. The purpose of this is to cover the cost of paying

salary of the person employed to run the business after the owner of the company dies, is disabled or in to compensate the

family of the owner for loss of possible / potential income, should the business fail after the disability or death of the sole

proprietor.

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Management

Soliciting AgentInsurance companies frequently work with a general agent or sometimes a branch manager. The soliciting agent actually

makes contact with potential customers, collects the first premium payments and delivers policies. See Insurance agent.

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Management

Special Vocational

Preparation (SVP)

The amount of time required by a typical worker to acquire skills for average performance. There are nine levels of time

duration required by a typical worker to acquire skills for average performance in the subject position, 9 being the highest and 1

being the lowest. For more information on SVP, please refer to the Dictionary of Occupational TiItles or U.S. Department of

Labor.

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Special Work

Location

Ordinarily, payment by the employer of room and board and/or transportation costs are considered taxable income. Exceptions

may be made for special work locations and remote locations. In addition, those employees living in northern areas of Canada

may be eligible for a tax deduction.

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Resource

Management

Specified Fringe

Benefits

Benefit plans for specific purposes including group-term life, accident and health, group legal services, cafeteria plans,

educational assistance programs, and dependent care assistance programs.

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Management

Spendable Income This is the total income minus housing expenses, taxes, savings, and life insurance.

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Management

Split Credit Credit is given to more than one individual.

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Management

Split Dollar Life

InsuranceThe employer and employee share in the expenses, equity and death benefits of the policy.

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Management

Split FundingThe use of two or more funding agencies for the same pension plan. An arrangement whereby a portion of the contributions to

the pension plan are paid to a life insurance company and the remainder of the contributions are invested through a corporate

trustee, primarily in equities.

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Management

Spot AwardsSpot Awards are a frequently administered ―alternative pay‖ program for non-exempt and exempt non-management personnel.

They are usually cash or gift awards delivered ―on-the-spot‖ for extraordinary performance, completion of a project, and/or

individual recognition. These awards are typically administered at the discretion of management.

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Spouse And

Children's Insurance

Rider

An additional rider to the life insurance plan that covers a spouse and child.

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Management

Springing Rabbi TrustTrusts might be 'springing,' meaning that assets are transferred to the trust upon a triggering event - usually a change of

control.

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Management

StackingNot paying benefits under a public pension plan. When there is no integration of two plans- private and public. This is

considered stacking.

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Management

Stakeholder Any party that has an interest ('stake') in a firm.

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Management

standard An established norm against which measurements are compared. The time allowed to perform a task including the quality and

quantity of work to be produced.

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Management

Standard And Poors

(S&P)Investment rating service.

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Management

Standard Deviation The square root of the variance. A measure of dispersion of a set of data from its mean.

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Standard Error Of

EstimateAn estimate of the variability or random error of the sample to the population.

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Management

Standard Industrial

Classification System

(SIC)

This federally designed system identifies companies by industry with a standard numbering system. It provides other

information and is used by securities analysts, market researchers, and others.

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Management

Standard

Metropolitan

Statistical Area

(SMSA)

A central city area and its surrounding suburbs and small jurisdictions.

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Management

Standard

Nonforfeiture LawState law stating what the minimum benefits a life-insurance policy can have.

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Management

Standard

Occupational Code

(SOC)

The SOC is a Canadian system used by statistical agencies to categorize workers into occupational groups so as to collect,

calculate, and disseminate data. Workers will be grouped into a particular classification of occupation (of which there are over

820) depending on their definition. To make classification easier, occupations will be combined so as to form 23 main groups,

96 sub-groups and 449 broad categories of occupations.

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Management

Standard Plan

TerminationThe termination of a plan that has sufficient funds to pay for any and all benefits the participants may be entitled to.

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Management

Standard Premium

RateThe premium rate for a person considered to be average in the chance of experiencing a loss.

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Standard Rate Designated rate for a specific job classification, established by evaluation or performance.

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Management

Standard Risk ClassIn life and health insurance, a person entitled to insurance protection without extra rating or special restrictions, a risk meeting

the same conditions as the tabular risks on which rates are based.

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Management

standard time The length of time that should be required to perform a task through one complete cycle. It assumes an average worker

follows prescribed procedures and allows time for rest to overcome fatigue.

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Management

Starting Rate Refers to the wage or salary to which an employee is assigned upon entering the job.

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Management

State Disability

Insurance Program

(SDI)

A plan for accident and sickness, or disability insurance required by state legislation of those employers doing business in that

particular state.

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Management

State Unemployment

Tax Act (SUTA)

The State Unemployment Tax Act (SUTA) provides that employers pay a payroll tax that supplies funds at the state level that

are used to provide benefits for unemployed workers. The amount paid by the employer depends upon the experience of

claims by former employees on the fund.

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Management

Statute Of Limitations State law that sets a time limit within which legal action must be taken.

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Statutory Accounting

Practices (SAP)

Principles required by statute that must be followed by an insurance company when submitting its financial statements to the

various state insurance departments. Such principles differ from the Generally Accepted Accounting Principles (GAAP).

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Management

Statutory BenefitsBenefits that are required by statutory law. In the United States, for example, workers' compensation, Social Security and

unemployment insurance are required, benefits vary among countries. Companies operating in foreign countries must comply

with host country compensation and benefits mandates.

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Management

Statutory Reserve In insurance, especially life, a reserve, either specific or general, required by law.

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Management

Statutory Stock

OptionsGives an employee a right to purchase company stock usually at a bargain price.

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Management

Step RatesStandard progression pay rates that are established within a pay range. Step rates usually are a function of time in grade and

are often referred to as ―automatic‖. However, they can be variable or can be used in conjunction with merit programs.

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Management

StockA certificate of ownership, a contract between the issuing corporation and the owner that gives the latter an interest in the

management of the corporation, the right to participate in profits and, if the corporation is dissolved, a claim upon assets

remaining from all debts that have been paid.

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Management

Stock Appreciation

Rights (SAR)

An executive can receive the difference between the stock option price and current market price of the company's stock

without buying any, often used in conjunction with an incentive stock option.

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Stock Bonus Plan

A qualified defined contribution plan established and maintained by an employer to provide benefits similar to those of a profit-

sharing plan, except that the contributions by the employer are not necessarily dependent upon profits and the benefits are

distributable in stock of the employer company. For the purpose of allocating and distributing the stock of the employer that is

to be shared among employees or their beneficiaries, such a plan is subject to the same requirements as a profit-sharing plan.

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Management

Stock Bonus

Planning

A qualified defined contribution plan established and maintained by an employer to provide benefits similar to those of a profit-

sharing plan, except that the contributions by the employer are not necessarily dependent upon profits and the benefits are

distributable in stock of the employer company. For the purpose of allocating and distributing the stock of the employer that is

to be shared among employees or their beneficiaries, such a plan is subject to the same requirements as a profit-sharing plan.

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Management

Stock Insurance

CompanyAn insurance company that is owned by people who buy shares of the company's stock.

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Management

Stock Option The right, but not the obligation, to buy company stock at a certain price within a particular period of time.

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Management

Stock Option

Incentive

A special benefit that some companies offer to their employees to purchase stock at a fixed price. Companies usually award

incentive stock options as a bonus for performance, or as an incentive to get you to work harder.

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Management

Stock OwnershipConsisting of one or more shares that have been purchased, which then entitles the owner to a share of the company, and

declared dividends.

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Management

Stock Purchase Plan

(Nonqualified)

A plan that allows senior management or other key personnel to purchase employer stock. Certain restrictions apply: (1) the

stockholder must be employed for a particular length of time, (2) the employer has the right to buy back the stock and (3)

stockholders cannot sell the stock for a specific time period. (Qualified) A program under which employees buy shares in the

employer's stock. The employer contributes a certain amount for each unit of employee contribution. Also, stock may be

offered at a fixed price (usually below market) and paid for in full by the employees.

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Stock Repurchase

InsuranceInsurance used to repurchase company stock from a deceased stockholder.

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Management

Stock Sale When a buyer takes ownership, full, of the company entirely.

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Management

Stock SplitA division made of the capital stock of a corporation to create more shares, primarily to improve marketability and heighten

investor interest. Stock splits are generally on a two-for-one basis (two shares of new stock are made exchangeable for one

share of old).

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Management

Stock Swap Allowing an executive to deliver already-owned stock, instead of paying cash, to exercise a stock option.

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Management

Stop-Loss ProvisionAn insurance provision stating that the insurance company will pay all expenses after a set amount of out-of-pocket expenses

has been paid.

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Resource

Management

Straight Life Annuity An annuity that lasts for the length of the annuitant's life and stops all payments at the time of death.

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Management

Straight Life Income

Option

An insurance option that states that benefit payments will be made to the beneficiary until the beneficiary dies and that at that

time all payments cease.

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Straight Life

InsuranceWhole life insurance on which premiums are payable for life.

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Management

Straight Line

DepreciationA method of calculating the depreciation of an asset, which assumes the asset, will lose an equal amount of value each year.

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Resource

Management

Strategic Business

Unit (SBU)Independent business unit within a company that markets its own products.

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Resource

Management

Strategic HRM The process of aligning human resources more closely to the strategic and operating objectives of the organization.

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Resource

Management

Strategic PlanningThe process of identifying an organization's long-term goals and objectives and then determining the best approach for

achieving those goals and objectives.

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Management

Strength Rating The overall physical strength required to perform a job is expressed as a strength rating.

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Management

stress The real or perceived demand on the mind, emotions, spirit, or body. Too much stress puts an undo amount of pressure upon

us and drives us into a state of tension. Controlled stress is good as it is what motivates us.

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Strikes To refuse to continue working because of an argument with an employer about working conditions, pay levels or job losses.

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Management

Subchapter S

Corporation

This is a type of corporation, which does not have its gains taxed at the corporate level but rather the tax is passed down to the

shareholders who then are required to report the gains on their individual tax returns.

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Management

Subject Matter Expert

(SME)

An individual who shows a high degree of expertise at performing a job, task, or skill in an organization. For example, a

customer service agent, account manager, or website programmer might qualify if the individual is an authority on the subject

matter.

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Resource

Management

Subpoena /

Subpeonas

To order (someone) to go to a court of law to answer questions or to order that (documents) must be produced in a court of

law.

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Management

SubrogationTaking over of a debt from the original creditor. In insurance, subrogation is the right of the employer or insurance company to

recoup benefits paid to a participant through a legal suit, if the action causing the disability and subsequent expenses was the

fault of another person.

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Management

Substandard Broker A broker that specializes in substandard risk.

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Management

Substandard

Premium RateA premium rate, generally higher than a standard premium, charged on a substandard risk.

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Substandard Risk

ClassA risk class with a greater chance of loss than the average person.

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Resource

Management

Succession PlanningSuccession planning is a process whereby an organization ensures that employees are recruited and developed to fill each key

role within the company. Succession planning ensures you can fill key roles from within your organization.

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Resource

Management

Successor Employers A successor employer is one who has taken over the assets and liabilities of another company.

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Resource

Management

Successor Owner A person designated to become the owner of a life insurance policy if the owner dies.

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Resource

Management

Suggestions Awards Allows employees a monetary or incentive reward for company savings ideas or a unique idea.

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Resource

Management

Suicide ClauseAn insurance provision that states that no benefits will be paid if the insured dies as a result of suicide. (This is often limited to

a set period of time following the issue of the insurance policy.)

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Management

Summary Annual

Reports (SAR)Summaries report on the financial status of an employee benefit plan, must be given to participants.

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Summary dismissal The act of dismissing personnel immediately, usually because the person has committed some act of Gross Misconduct.

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Management

Summary Plan

Description (SPD)

A requirement of ERISA for a written statement of a plan in an easy-to-read form, including a statement of eligibility, coverage,

employee rights and appeal procedure. It is provided to participants, beneficiaries and, upon request, the Department of Labor.

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Resource

Management

SuperannuationPlan or scheme that provides benefits in the event of retirement, death or disability. Can refer to private company plans as well

as industry or union funds. Frequently used in British Commonwealth countries.

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Resource

Management

Superimposed Major

Medical Plan

A medical plan used in conjunction with basic medical plans that provides coverage if expenses exceed what is covered by the

basic plans.

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Resource

Management

Superintendent Of

InsuranceThe head of the Bureau of Insurance.

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Resource

Management

supervising The ability to establish procedures for monitoring and regulating processes, tasks, or activities of employees and one's own

job, taking actions to monitor the results of delegated tasks or projects.

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Resource

Management

Supper Money A fringe benefit for employees working overtime. It is a monetary allowance provided for an evening meal.

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Management

Supplemental Death

Benefits

(Supplemental Life

Insurance)

This is an additional layer of coverage you may purchase to help financially protect your family if you die.

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Resource

Management

Supplemental

Disability BenefitsA benefit provided that goes beyond the company provided disability plans.

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Resource

Management

Supplemental

Executive Retirement

Plan (SERP)

This is an additional layer of coverage you may purchase to help financially protect your family if you die.

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Resource

Management

Supplemental Long

Term Disability PlansA long-term disability that goes above and beyond the standard plan.

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Resource

Management

Supplemental Major

Medical Insurance

This coverage is designed to insure expenses not covered by a basic medical plan. Covered persons are first reimbursed for

their medical expenses under the employer's basic plan, usually with no deductible or co-payment applied, to the extent that

the basic plan covers the expenses. Expenses not covered by the basic plan can be reimbursed under the supplemental major

medical plan, usually after the satisfaction of a corridor type deductible. After the covered expenses exceed the deductible, the

major medical plan takes over and typically pays a percentage, such as 80%, of the covered expenses in excess of the

deductible amount. There frequently is a limit on the amount of covered expenses that are subject to a coinsurance provision,

after which the covered expenses are reimbursed in full.

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Resource

Management

Supplemental Nurse

A Supplemental Nurse is employed by an agency and may work either short or long-term assignments in a hospital or other

health care facility. Supplemental Nurses provide specific nursing skills and may be referred to as a ―traveling nurse

professional.‖ Pay rates for these positions are usually better than per diem or staff rates with flexibility in scheduling or shift

preference.

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Supplemental

Organization Life

Insurance

Additional life insurance that is purchased to provide benefit coverage beyond the company sponsored plan.

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Resource

Management

Supplemental

Unemployment

Benefits (SUB)

Amounts provided under a labor contract as additions or supplements to the unemployment compensation provided by law.

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Resource

Management

Supplemental

Unemployment

Compensation

Benefits

Plan or scheme that provides benefits in the event of retirement, death or disability. Can refer to private company plans as well

as industry or union funds. Frequently used in British Commonwealth countries.

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Resource

Management

Supplementary

Benefit Rider

Benefits provided by a pension plan in addition to regular retirement benefits. Supplemental benefits vary according to the

terms of a plan and include such items as the payment of benefits in the event of terminations, death, disability or early

retirement.

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Resource

Management

Supplementary

Contract

A document or rider attached to an insurance policy and made a part of it, providing for an additional benefit or some

modification of a benefit already contained in the policy.

SHuman

Resource

Management

Supplementary

Contract With Life

Contiguous (WLC)

A supplementary contract or annuity in which the duration of the payment period depends on the lifetime of the beneficiary.

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Resource

Management

Supplementary

Contract Without Life

Contingencies

A supplementary contract or annuity where the proceeds of a life insurance policy are held at interest or paid in installments.

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Supplementary

Notice

The Fair Credit Reporting Act requires it. Notice to a consumer of the nature and scope of the investigation mentioned in the

pre-notice form that an insurance company has sent to the client.

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Resource

Management

Supplementary Shift

BonusA Supplementary Shift Bonus is sometimes used to reward employees who fill in for another employee who calls in sick.

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Resource

Management

Surgical ScheduleIn a basic medical expense health insurance policy, the list of cash allowances that are payable for various types of surgery,

with the respective maximum amounts payable based upon the severity of the medical procedure. The stipulated maximum

usually covers all professional fees involved (e.g., surgeon, anesthesiologist).

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Resource

Management

Surplus An excess amount. In financial terms, this is the remainder of assets left after debts, expenses, and liabilities are deducted.‖

SHuman

Resource

Management

Surrender Charge A charge for the cancellation of an insurance or annuity policy.

SHuman

Resource

Management

Surrender Cost Index

(SCI)

In life insurance, a method of comparing costs of similar policies by using an index that takes into account the time value of

money due at different times through interest adjustments to the annual premiums, dividends and cash value increases at an

assumed interest rate.

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Management

Survey An examination of opinions, behavior etc., made by asking people questions.

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Surviving Spouse A widow or widower.

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Management

Survivor Income

Benefit

A type of group life insurance, which provides income benefits if a 'qualified survivor' survives the insured. Usually the qualified

survivor category includes only the insured's spouse and children.

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Resource

Management

Survivorship Life

InsuranceLife insurance covering two people that do not pay benefits until both have died.

SHuman

Resource

Management

Suspension A form of disciplinary action resulting in an employee being sent home without pay for a specified period of time.

SHuman

Resource

Management

SVPSpecific Vocational Preparation is defined as the time required by the average worker to acquire techniques and to gain the

necessary knowledge and information in order to perform averagely in a particular job or work situation.

THuman

Resource

Management

Tactical Planning Deals primarily with the implementation phase of the planning process.

THuman

Resource

Management

TagA code within a data structure that gives instructions for formatting or other actions. World Wide Web documents are set up

using HTML tags, which serve various functions such as controlling the styling of text and placement of graphic elements and

providing links to interactive programs and scripts.

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Take Home Pay Pay actually received by an employee after adding on bonuses, but deducting taxes.

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Management

Talent ManagementTalent Management, often times referred to as Human Capital Management, is the process recruiting, managing, assessing,

developing and maintaining an organization‘s most important resource—it‘s people!

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Management

Tangible rewards Rewards which can be physically touched or held (i.e. a gift certificate, gifts in the form of merchandise, or a savings bond.)

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Resource

Management

Target BenefitsContributions are based upon an actuarial valuation designed to provide a target benefit to each participant upon retirement.

The plan does not guarantee that such benefit will be paid, its only obligation is to pay whatever benefit can be provided by the

amount in the participant's account.

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Management

Target Compa-ratioThe organization‘s planned average (or total) salary for the organization, group or individual at year-end as a percent of the

corresponding average (or total) midpoint.

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Management

Target Compensation Expected pay for a job or position. This would include all avenues of compensation. (Base pay, incentives, bonuses, etc.)

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Target Performance Expected sales results.

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Target Total

CompensationThe complete cash compensation available to sales representative, for achieving sales goals.

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Management

Task Actions to accomplish an objective.

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Resource

Management

Tax Deferred Annuity

(Tda)

Offered by savings and loans, brokers and others, it offers high interest rates when the account is opened, but future interest

rates are not guaranteed. Tax is deferred on the account until money is withdrawn.

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Resource

Management

Tax EqualizationA tax reimbursement system intended to ensure the expatriate neither gains nor loses, with regard to income tax, from

undertaking an expatriate assignment. A hypothetical tax amount is deducted and the company then meets any additional host

country tax liability on the entire package.

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Resource

Management

Tax Equity And Fiscal

Responsibility Act Of

1982 (TEFRA)

Lowered limits on contributions and benefits for corporate plans. Allowed certain loans from plans to be treated as distributions.

Reduced estate tax exclusion for retirement plan death benefits to maximum of $100,000. Repealed special Keogh plan and

subchapter S restrictions. Added 'top-heavy' plan requirements. Stopped employers and health plans from forcing employees

ages 65 to 69 to use Medicare rather than group health plan.

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Management

Tax ProtectionUnder this system, the expatriate pays no more in income tax than if they had remained at home, the company meeting the

host tax bill in excess of the assumed home country liability. No hypothetical tax deductions are made, thereby allowing the

expatriate to gain where the host country tax liability is lower than the home country assumed liability.

THuman

Resource

Management

Tax Reform Act Of

1986

Dictated extensive changes in the law governing the qualifications of pension and profit sharing plans and the tax treatment of

employers and employees. Imposed the comprehensive nondiscrimination rules of IRC Section 89.

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Tax Sheltered

Annuities (TSAs)

This describes special regulation under IRC Sections 501(c)(3) and 403(b) wherein employees of certain institutions may

reduce their income by permitting the employer to pay part of their earned income into a deferred annuity.

THuman

Resource

Management

Tax Sheltered

Annuity (TSA)

This describes special regulation under IRC Sections 501(c)(3) and 403(b) wherein employees of certain institutions may

reduce their income by permitting the employer to pay part of their earned income into a deferred annuity.

THuman

Resource

Management

Taxable BenefitsIn Canada, there are two criteria for determining if a benefit is taxable: (1) The person receiving the benefit must have received

the benefit as part of the employment relationship. (2) The person must receive or enjoy the benefit.

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Resource

Management

Taxpayer

Identification Number

(TIN)

Your social security number (SSN) for yourself as an individual, or your employer identification number (EIN) for your business.

THuman

Resource

Management

TCNThird Country Nationals are citizens of one country who are employed by a company headquartered in a second country to

work in a third country.

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Resource

Management

Telecommuting Working at home by using a computer terminal electronically linked to one's place of employment.

THuman

Resource

Management

Temporary Insurance

Agreements

An agreement that provides temporary insurance for a short period of time, such as during the period in which regular

insurance is being written.

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Temporary Life

AnnuityA series of payments, structured like an annuity that continues for a limited amount of time.

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Management

Ten-Day Free Look Free Examination.

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Resource

Management

Term Insurance Insurance in which the benefit is payable only if the loss occurs during a specific period of time.

THuman

Resource

Management

Term Or Period

Certain

A contract that provides an income for a specified number of years, regardless of life or death. If an annuitant dies, his or her

beneficiary will receive payments for the remaining number of specified years.

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Resource

Management

Term Policy DividendA life insurance policy dividend option under which policy dividends are used as a net single premium to purchase one-year

term insurance.

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Management

Termination

ExpensesThe cost of processing death benefit claims and cash surrenders.

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Management

Termination

IndemnityObligation by law for payments on separation based on age, service or reason for termination.

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Territory Area a salesperson covers.

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Management

Testamentary

DispositionHow the terms of a will divide the testator's (will writer's) estate, including specific gifts to named beneficiaries.

THuman

Resource

Management

theory of constraints

(TOC)

A management philosophy developed by Dr. Eliyahu M. Goldratt that is broken down into three interrelated areas - logistics,

performance measurement, and logical thinking. Logistics include drum-buffer-rope scheduling, buffer management, and VAT

analysis. Performance measurement includes throughput, inventory and operating expense, and the five focusing steps.

Logical thinking includes identifying the root problem (current reality tree), identifying and expanding win-win solutions

(evaporating cloud and future reality tree), and developing implementation plans (prerequisite tree and transition tree).

THuman

Resource

Management

Third Country

National (TCN)Citizens of one country who are employed by a company headquartered in a second country to work in a third country.

THuman

Resource

Management

Third Party

Administration (TPA)

The party to an employee benefit plan that may collect premiums, pay claims and/or provide administrative services. Usually

an out-of-house professional firm providing administrative services for employee benefit plans.

THuman

Resource

Management

Third Party

Administrator

The party to an employee benefit plan that may collect premiums, pay claims and/or provides administrative services. Usually

an out-of-house professional firm providing administrative services for employee benefit plans.

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Resource

Management

Third Party

ApplicationAn insurance application submitted by a person or party other than the proposed insured.

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Third Party

Beneficiary

A person not a party to a contract, yet who has legally enforceable rights under the contract. Such a person might be a life

insurance beneficiary, a mortgagee holding an assignment, or a member of a group insurance plan.

THuman

Resource

Management

Third Party

Endorsement

A method of marketing individual insurance to groups. In the third-party endorsement method, a life insurance company makes

an agreement with an organization (such as a club, a business, or a professional association) to sell individual insurance to

members or employees of the organization. The organization endorses the insurer's products, but the group members are free

to buy the products or not.

THuman

Resource

Management

Third Party Insurance Insurance coverage applied for by someone other than the proposed insured.

THuman

Resource

Management

Three Factor

Contribution MethodA method for calculating policy dividends, considering separately the contributions arising from interest, mortality, and loading.

THuman

Resource

Management

Threshold A starting-point Example, on the threshold of a new career.

THuman

Resource

Management

Thrift PlansA defined contribution plan to which employees make contributions on an after tax basis, usually as a percentage of salary.

The employer also makes incentive matching or partially matching contributions on behalf of the participating employees.

THuman

Resource

Management

Tiered Pay PlanA remuneration system that differentiates salary based on time of hire (i.e., new employees are paid less than current

employees for performing the same or similar jobs) as well as on nature of work performed.

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Time Off With PayCompensation that is paid to the employee, based on pay for holidays, vacation, sick leave, lunch periods, and other approved

time off.

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Resource

Management

Time Span Of

DiscretionA non-economic definition of job value.

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Resource

Management

Timing Of Payment When payment is received early, current, or deferred.

THuman

Resource

Management

Top Hat PlansAn unfunded deferred compensation plan or welfare plan that is maintained to provide deferred compensation for a select

group of management or highly compensated employees.

THuman

Resource

Management

Top Heavy PlansA qualified plan in which the share of benefits allocable to key employees is more than 60%. The plan may be subject to

special accelerated vesting provisions and minimum contribution rates.

THuman

Resource

Management

Tort A civil wrongdoing that creates a claim that‘s to be tried in court before a jury.

THuman

Resource

Management

Total Annual Cash

CompensationThe sum of all cash payments made to an individual for services during a given year.

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Total Cash

CompensationThe sum of all monetary payments made to an individual for services (i.e., employment) during a given year.

THuman

Resource

Management

Total CompensationThe sum of all payments made to an employee for a specific time period (usually annual) including base salary, incentives, and

bonuses (and/or other variable pay such as commissions).

THuman

Resource

Management

Total Direct

CompensationIn executive compensation, total annual cash compensation plus the annualized value of long-term incentives.

THuman

Resource

Management

total employee

involvement

An empowerment technique where employees participate in actions and decision making that were traditionally reserved for

management.

THuman

Resource

Management

Total Needs

Programming

A basis for selling life insurance in which the agent takes into consideration all the prospect's financial needs, calculates the

amount of money required to take care of all those needs, determines the amount of money required to take care of all those

needs, determines the amount of funds that will be available when the prospect dies, and calculates the amount of life

insurance required to provide the difference.

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Resource

Management

Total Net PayThe amount paid to an expatriate consisting of the sum of his or her base salary, expatriation premium and allowances less the

tax equalization factor.

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Resource

Management

Total Payroll The sum of wages paid at the opening of business on the first day of the plan year or the last day of prior year.

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total quality

management (TQM)

Describes Japanese style management approaches to quality improvement. It includes the long term success of the

organization through customer satisfaction and is based on participation of all members of the organization in improving

process, products, service, culture, etc.

THuman

Resource

Management

Total RemunerationThe sum of the financial and nonfinancial value to the employee of all the elements in the employment package (i.e., salary,

incentives, benefits, perquisites, job satisfaction, organizational affiliation, status, etc.) and any other intrinsic or extrinsic

rewards of the employment exchange that the employee values.

THuman

Resource

Management

Total Shareholder

Return (TSR)The total return of a stock to an investor (capital gain plus dividends).

THuman

Resource

Management

Totalization

Agreements

Social security arrangements between countries intended to protect the social security benefits of employees who move

between countries and ensure single country social security coverages for employees on assignment.

THuman

Resource

Management

Traditional Net Cost

Method (TNC)

An insurance policy cost comparison method that is prohibited by the NAIC Model Life Insurance Solicitation Regulation

primarily because it ignores the time value of money.

THuman

Resource

Management

Training and

development

A process dealing primarily with transferring or obtaining knowledge, attitudes and skills needed to carry out a specific activity

or task.

THuman

Resource

Management

Training Needs

Analysis

A method of analyzing how employee skill deficits can be addressed through current or future training and professional

development programs, as well as determining the types of training/development programs required, and how to prioritize

training/development.

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trait A distinguishing quality or characteristic of a person. For a trait to be developed in a person, that person must first believe in

and value that trait.

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Management

TransferA Transfer is the movement of an employee to a job having the same value as the one that was occupied at the time of the

move. A transfer will typically not provide an adjustment in pay since it is a lateral, rather than an upward move as in a

promotion.

THuman

Resource

Management

Travel Accident

BenefitHealth insurance policies that limit the payment of benefits to losses that result while traveling, usually by common carrier.

THuman

Resource

Management

Treasury SharesCommon stock that has been issued and reacquired (purchased) by the corporation from the public at the current market

price.

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Resource

Management

Treasury Stock

Method

The method used in calculating diluted earnings per share whereby common stock equivalents such as unexercised stock

options exist. Generally accepted accounting principles require that this method be used in calculating and reporting.

THuman

Resource

Management

Tri-Modal A distribution having three modes.

THuman

Resource

Management

Triple IndemnityA type of accidental death benefit coverage that pays an additional benefit equal to twice the policy's basic death benefit if the

accident is sustained while the insured is a passenger in a public conveyance operated by a licensed common carrier, such as

a bus, train, or airplane.

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Trust AgreementIn a trusteed pension plan, the contract between the plan sponsor and the trustee that describes the trustee's authority and

responsibilities for investing and administering plan assets. Trust agreements are also found when group insurance is provided

through a multiple-employer trust (MET).

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Resource

Management

Trust Fund Assets held in a trust.

THuman

Resource

Management

Trust Fund PlanA pension plan in which all contributions are sent to a trustee who then invests the contributions and makes any benefit

payments.

THuman

Resource

Management

Trusteed Pension

Plan

A pension plan in which the corporation's contributions to the plan are placed in a trust for investment and reinvestment, as

distinguished from a plan in which the benefits are secured by life insurance.

THuman

Resource

Management

TrusteesA person, bank or trust company that has responsibility over financial aspects (receipt, disbursement and investment) of funds.

Where a bank or trust company, a board of trustees does not exercise this responsibility in which the individual trustee has but

one vote usually exercises it.

THuman

Resource

Management

Turnover Describes changes in the work force resulting from voluntary or involuntary resignations.

THuman

Resource

Management

TwistingIn life insurance, inducing an insured through misrepresentation to drop an existing policy in order to take a similar policy from

the selling agent. Twisting is cause for license revocation in most states and is an offense that is against the law in many

states.

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Resource

Management

U.S. Adopted Child

Health Care Mandate

Under COBRA, group health plans must treat adopted children like biological children covered by the plan, and plans are

precluded from applying pre-existing condition exclusions to an adopted child where no such exclusion applies to a newborn

biological child.

UHuman

Resource

Management

U.S. Minimum Wage The lowest wage, determined by law or contract, that an employer may pay an employee for a specified job.

UHuman

Resource

Management

U.S. Permanent

Resident Alien Status

A green card holder who is considered a permanent resident alien. They are entitled to all the rights, privileges and obligations

of an American citizen except the right to vote.

UHuman

Resource

Management

Ultimate Mortality

Table

A table of data that excludes the first 5 to 10 years of experience of those who have purchased life insurance. A Mortality Table

shows the number of deaths per 1000 within a grouping of people. Experience has shown that people have a lower mortality

rate in the first years after they purchase insurance, and this can skew the data. By excluding this information the Ultimate

Mortality Table is believed to give a more accurate portrayal of actual mortality rates.

UHuman

Resource

Management

Unallocated FundingA method of funding a pension plan in which the pension funds as a whole are held and managed by a funding agency, often

an insurance company, and are not allocated to specific plan participants.

UHuman

Resource

Management

Unappropriated

Earned SurplusThe amount of an insurer's surplus remaining after determination of an insurer's reserves, capital, and other surplus amounts.

UHuman

Resource

Management

Unbundled Insurance

Product

The process, of an insurance product, in which the mortality, investment, and expense factors used to calculate premium rates

and cash values are each identified in the policy.

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Unclaimed Benefits There are no payees to be found in the collection process of claims.

UHuman

Resource

Management

Unclaimed Property

Statutes

Statutes that regulate the disposition of funds for which no owner can be found. Insurers typically hold unclaimed property for

seven years. If the rightful owner is not found during this time, the property is turned over to the state.

UHuman

Resource

Management

Underfunded Pension

PlanA pension plan that has a negative surplus.

UHuman

Resource

Management

Underwater Options An outstanding option where the option price is above the stock's current market price.

UHuman

Resource

Management

Underwriter

Several definitions 1) the company that receives the premiums and accepts responsibility for fulfilling the policy contract, (2) the

company employee who decides whether or not the company should assume a particular risk or (3) the agent who sells the

policy. (Investments) With respect to a mutual fund, the entity responsible for marketing the shares of the fund. See also

Investment Banker.

UHuman

Resource

Management

UnderwritingThe process of identifying and classifying the potential degree of risk represented by a proposed insured. (Investments) The

procedure by which investment bankers channel investment capital from investors to corporations and municipalities.

UHuman

Resource

Management

Underwriting

DepartmentThe department in a life and health insurance company that selects the risks that the company will insure.

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Underwriting

ImpairmentsFactors that increase an individual's risk above that which is normal for his or her age.

UHuman

Resource

Management

Underwriting

Requirements

Printed instructions that indicate what evidence of insurability is required for a given situation and which of several optional

information sources will be needed to provide underwriters with necessary information.

UHuman

Resource

Management

Unemployment

Compensation

Payments made under state-administered programs to workers who are unemployed and meet the requirements of the law

involved to qualify for such payments. The requirements usually are (1) that the worker not be unemployed voluntarily. (2) That

the worker has worked in employment that is 'covered' by the law. (3) That the worker be willing and able to take employment

offered him or her. (4) That an initial period (the waiting period) of unemployment elapse before compensation is due.

Programs are entirely employer financed except in four states that require small employee contributions.

UHuman

Resource

Management

Unemployment

InsuranceIn Canada, a federal statute that provides unemployment insurance to almost all persons who are employed in Canada.

UHuman

Resource

Management

Unemployment

Insurance ActIn Canada, a federal statute that provides unemployment insurance to almost all persons who are employed in Canada.

UHuman

Resource

Management

Unexercised Options

/ SARS

The rights that have not yet been exercised. They may consist of both exercisable (vested) and non-exercisable (non-vested)

rights.

UHuman

Resource

Management

Unfunded

Commitments To

Executives

A nonqualified compensation plan in which future Financial commitments have been made to an executive organization. The

compensation plan has not been secured with funds that have been put aside for that purpose.

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Management

Unicasting Over a network, communication between a sender and single user.

UHuman

Resource

Management

Uniform Accident And

Sickness Insurance

Act

Model legislation governing health insurance contracts, in Canada. It has been agreed upon by the Canadian Council of

Insurance Regulators (CCIR) and enacted with minor variations by all the common law jurisdictions.

UHuman

Resource

Management

Uniform Distribution It looks 'flat' when graphed. A symmetrical distribution in which the frequency in each interval is about the same.

UHuman

Resource

Management

Uniform Life

Insurance Act

Model legislation governing life insurance contracts, in Canada. It has been agreed upon by the Canadian Council of Insurance

Regulators (CCIR) and enacted with minor variations by all of the common law jurisdictions.

UHuman

Resource

Management

Uniform Pension Plan

(UPP)

A prototype pension plan (see prototype plan), in Canada, developed by members of the Canadian Life and Health Insurance

Association and approved by the appropriate Canadian regulatory authorities.

UHuman

Resource

Management

Uniform Resource

Locator (URL)

An acronym for Uniform Resource Locator, a URL is the address for a resource or site (usually a directory or file) on the World

Wide Web and the convention that web browsers use for locating files and other remote services.

UHuman

Resource

Management

Unilateral Contract A contract in which only one party promises to do something.

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Management

Uni-Modal Distribution having only one mode.

UHuman

Resource

Management

Uninsurable Risk

ClassIndividuals with a risk of loss so great that an insurance company will not offer them insurance.

UHuman

Resource

Management

Union Welfare FundA union organized fund, and one or more employers to which contributions are made by the employer(s) so that organization

benefits can be made available to the union's members.

UHuman

Resource

Management

Unions Groups of workers who have formed incorporated associations relating to the type of work that they perform.

UHuman

Resource

Management

Unit-Benefit Formula A method of calculating benefits for a defined benefit pension plan based on years of service.

UHuman

Resource

Management

Unit-Credit Funding

Cost MethodThis is a funding method where with a single, one time payment / premium.

UHuman

Resource

Management

Universal Life

Insurance

A whole life insurance product whose investment component pays a competitive interest rate rather than the below-market

crediting rate.

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Resource

Management

Unjustifiable

dismissal

The act of terminating an employee‘s employment agreement for a reason that the Employment Relations Authority or

Employment Court regards as unjustifiable.

UHuman

Resource

Management

Unscheduled

AbsenceAny unanticipated time lost from work.

UHuman

Resource

Management

Unweighted Mean A simple arithmetic average of individual means.

UHuman

Resource

Management

Upgrading The advancement of a job to a higher grade or salary range.

UHuman

Resource

Management

Uplink In satellite communications, a link from an earth station to an orbiting body.

UHuman

Resource

Management

UploadOften confused with download, uploading a file means loading it from your computer onto a remote one. Most people do a lot

more downloading than uploading.

UHuman

Resource

Management

Upside Potential

(Leverage)A percent of target total compensation or as a multiple of dollars at risk.

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Management

UsabilityThe effectiveness, efficiency, and satisfaction with which users can achieve tasks in a particular environment of a product.

High usability means that a system is easy to learn and remember, efficient, visually pleasing, fun to use and quick to recover

from errors.

UHuman

Resource

Management

Usual, Customary

And Reasonable

(UCR)

Based on the average fee charged by all doctors in a given geographic area. Many insurers pay the (UCR) amount and the

balance of any overcharges or costs of any disallowed services are the insured's responsibility.

UHuman

Resource

Management

Usury Laws Charging of an interest rate that is illegally high.

UHuman

Resource

Management

Utilization ReviewThe evaluation of medical necessity, efficiency or quality of health cares services, prospectively, concurrently, or

retrospectively. The term utilization review is more limited to the physician's diagnosis, treatment and billing amount.

UHuman

Resource

Management

Utilization Review

OrganizationIndependent review organizations, insurance companies or in-house programs providing utilization review services.

VHuman

Resource

Management

Validity How well a given criterion actually measures or predicts. Also see reliability.

VHuman

Resource

Management

Valuation DateDesignated time of closing (monthly, quarterly, etc.) for determination of account balances in a defined-contribution or defined

benefit plan.

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Resource

Management

Valuation Mortality

TablesMortality tables developed and published as industry-wide standards for computing the values of policy reserves.

VHuman

Resource

Management

Valuation Premium The net annual premium used to calculate reserves.

VHuman

Resource

Management

Value Added

ServicesCustom training needs and or analysis.

VHuman

Resource

Management

Valued Contract A contract under which the amount of the benefit is set in advance.

VHuman

Resource

Management

values Ideas about the worth or importance of things, concepts, and people.

VHuman

Resource

Management

Variable Annuity

Annuity expressed in terms of benefit units instead of fixed dollar amounts. Annuity in which the amount of each periodic

payment fluctuates according to some variable factor. Under an equity annuity plan, payments vary according to the value of a

specific portfolio of common stocks and similar investments. Under a cost-of-living plan, benefits are adjusted to reflect

variations in a specific index, such as the Consumer Price Index of the Bureau of Labor Statistics. An insured variable` annuity

is one under which the benefit varies according to the investment results of an insurance company's separate account.

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Resource

Management

Variable Life

Insurance

A form of whole life insurance under which the death benefit and the cash value of the policy fluctuate according to the

investment performance of a separate account fund. Most variable life insurance policies guarantee that the death benefit will

not fall below a specified minimum. A minimum cash value is seldom guaranteed. Because the policy owner assumes

investment risk under variable life insurance policies, these products are considered securities contracts. In the United States,

variable life insurance policies must be registered with the Securities and Exchange Commission (SEC), and only agents who

have passed the National Association of Securities Dealers (NASD) examination may sell this product. In Canada, variable life

insurance policies are considered life insurance contracts, and agents do not need a special license to sell these products. See

also investment-sensitive life insurance.

VHuman

Resource

Management

Variable Pay Rewards based on performance rather than rewards based on time spent on the job or the value of the job.

VHuman

Resource

Management

Variable Premium

Life Insurance

A type of nonparticipating whole life insurance that allows premium rate modifications throughout the life of the policy and

guarantees that the premium rate will never exceed a stated maximum rate.

VHuman

Resource

Management

Variable Universal

Life Insurance

A form of life insurance (also called Universal Life II or flexible life) offering a guaranteed death benefit that combines the

flexible premium features of universal life with the investment component of variable life.

VHuman

Resource

Management

VarianceA measure of variability based on squared deviations of individual observations from the mean value of the distribution. Its

square root is the standard deviation.

VHuman

Resource

Management

Venture Capital FirmAn organization that provides funding for new ventures and business ideas, typically by offering funds in the form of a loan that

can be converted to equity.

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Resource

Management

Vested Benefit Accrued benefits of a participant that have become nonforfeitable under the vesting schedule adopted by the plan.

VHuman

Resource

Management

Vested Benefit

Obligation (VBO)The actuarial present value of vested benefits.

VHuman

Resource

Management

Vested TermineesAn employee who has a full vested right to benefits under one or more pension/capital accumulation plans payable at a later

date, whose employment has been discontinued.

VHuman

Resource

Management

Video ConferencingA discussion between two or more groups of people who are in different places but can see and hear each other using

electronic communications. The telecommunication network carries pictures and sound and such conferences can take place

across the world.

VHuman

Resource

Management

Video On Demand

(VOD)

A system by which viewers can watch video programs on their own television sets at the time they choose. The programs are

supplied by cable or ISDN.

VHuman

Resource

Management

Virtual Classroom Where online learning takes place and where learners and instructors interact.

VHuman

Resource

Management

Virtual CommunityA virtual community is a community of people sharing common interests, ideas, and feelings over the Internet or other

collaborative networks.

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VHuman

Resource

Management

Virtual Private

Network (VPN)

A network which has the appearance and functionality of a dedicated line, but which is really like a private network within a

public one, because it is still controlled by the telephone company, and its backbone trunks are used by all customers.

VHuman

Resource

Management

Virus

A program that infects a computer by attaching itself to another program, and propagating itself when that program is

executed. A computer can become infected by files downloaded over a network, or by the installation of new software or floppy

disks that are infected with viruses. Some viruses are only pranks, and perform harmless actions like displaying a screen with

a joke message on it. Others can destroy files or wipe out a hard drive.

VHuman

Resource

Management

Virus Detection

ProgramA software program that scans, detects, and cleans computer viruses.

VHuman

Resource

Management

Vision Care Benefits An insurance plan that provides participants with eye examinations, lenses, frames, and fitting of glasses.

VHuman

Resource

Management

Vocational

RehabilitationProviding a disabled or laid-off individual with training in a specific trade to prepare them for alternate employment.

VHuman

Resource

Management

Vocational

Rehabilitation Act of

1973

This act is intended to promote job access for qualified individuals with disabilities.

VHuman

Resource

Management

Voice Over IP (VOIP) Any technology providing voice telephony services over IP connections.

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VHuman

Resource

Management

Void Contract A contract that is not valid.

VHuman

Resource

Management

Voir DireVoir dire questions deal with challenges to your suitability for acceptance by the court as a person qualified to give expert

testimony.

VHuman

Resource

Management

Voluntary BenefitsSpecific benefits that the employer administers and the employees pay for. Commonly used for benefits that employee's want

but which the employer views as nonessential to the business.

VHuman

Resource

Management

Voluntary Employee

Benefit Association

Usually covered by IRC Section 501(c)(9), it serves as the base of an employer-sponsored employee benefit plan. It is a tax-

exempt fund that pays death, health, accident or other benefits to members, their dependents and/or beneficiaries.

VHuman

Resource

Management

Voluntary Exit

Incentive ProgramThe plan provides an incentive for employees close to retirement to retire early.

VHuman

Resource

Management

Voluntary Plan

TerminationThe termination of a pension plan with the curtailment or termination being initiated by the plan sponsor.

VHuman

Resource

Management

VortalA vortal is a portal - the posh word for a gateway to the Internet - which specializes in one industry. In the jargon of the

business schools, a site like this is vertically integrated, hence vertical portal, or vortal.

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WHuman

Resource

Management

W-2 Form Wage and Tax Statement.

WHuman

Resource

Management

W-4 Form The Employee's Withholding Allowance Certificate.

WHuman

Resource

Management

Wage The total of salary and also commissions, or bonuses, paid by an employer for services.

WHuman

Resource

Management

Wage And Price

Controls

Wages and prices are limited to some low percentage of growth through government regulation until they are deemed to be

under control.

WHuman

Resource

Management

Wage Contour Developed by labor economist John Dunlop, a way of considering an external wage structure.

WHuman

Resource

Management

Wage curveDepicts pay rates currently being paid for each job within a pay grade in relation with the rankings awarded to each job during

the job evaluation process.

WHuman

Resource

Management

Wage DifferentialDifferences in wage rates (for similar jobs) that can occur because of location of company, hours of work, working conditions,

type of product manufactured, or a variety of other circumstances.

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WHuman

Resource

Management

Wage drift The gap between the Collective Agreement rate and the rate actually paid. Evidence of geographical variations in wage levels.

WHuman

Resource

Management

Wage Level The average of all salaries paid to workers in an occupation, department, organization, or industry.

WHuman

Resource

Management

Wage Movement A decrease or increase in the wage levels for a particular position or occupation in a market.

WHuman

Resource

Management

Wage Rate The money rate paid to an employee per hour.

WHuman

Resource

Management

Wage StructureUsually established within an organization, this is the levels or hierarchy of job and pay ranges. The salary structure is also

referred to as job grades, job-evaluation points and or policy lines.

WHuman

Resource

Management

Wage Survey A survey of a labor market to determine the going rates for benchmark jobs.

WHuman

Resource

Management

Waiting PeriodSeveral definitions: 1) The duration of time between the beginning of an insured person's disability and the start of the policy's

benefits. (2) The period between employment or enrollment in a program and the date when an insured person becomes

eligible for benefits.

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WHuman

Resource

Management

Waiver Of Coverage Relinquishing the right to a benefit, especially in regard to health benefits, flexible benefits or early retirement window plans.

WHuman

Resource

Management

Waiver Of Deductible

Provision

A provision in some major medical coverage that waives the initial deductible if the medical expenses are the result of an

accidental injury.

WHuman

Resource

Management

Waiver Of Premium

For Disability Benefit

(WP)

A rider which the insurer promises to give up its right to collect the policy's premium if the policy owner becomes unable to

work because of an accident or injury.

WHuman

Resource

Management

Waiver Of Premium

For Payer Benefit

A rider often included in juvenile policies which provides that the insurer will give up its right to collect the policy's premiums if

the adult policy owner dies or becomes disabled.

WHuman

Resource

Management

Walsh-Healey Public

Contracts Act Of

1936

A federal law requiring that pay be at least be the federal minimum wage with certain employers holding federal contracts for

the manufacture or provision of materials, supplies and equipment.

WHuman

Resource

Management

War Exclusion

Provision

A life insurance policy provision that if death were connected with war or military service, it would limit the insurer's liability to

pay a death benefit.

WHuman

Resource

Management

Web-Based Training

(WBT)

Web-based training (sometimes called e-learning) is anywhere, any-time instruction delivered over the Internet or a corporate

intranet to browser-equipped learners.

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WHuman

Resource

Management

WebpageA document on the World Wide Web, consisting of an HTML file and any related files for scripts and graphics, and often hyper

linked to other documents on the Web.

WHuman

Resource

Management

Website Locations where files are located on the World Wide Web that can be viewed through an Internet browser.

WHuman

Resource

Management

WeekenderWeekenders are found in health care environments. These are usually nurses (but may be other health care professionals)

that work two 12-hour shifts over a weekend. Weekenders typically do not receive benefits but are paid at the regular base rate

plus a substantial premium of 50% or more of base rate.

WHuman

Resource

Management

Weekly Indemnity

Plan

A short-term disability income insurance plan which pays a weekly benefit equal to a dollar amount or a percentage of the

insured person's earnings.

WHuman

Resource

Management

Weighted AverageThe average of the total population or number of incumbents reported. For each job, it is computed by multiplying each

company's average salary by their number of incumbents, adding these values, and dividing by the total number of incumbents

for each job.

WHuman

Resource

Management

Weighted MeanReflects equally the number of incumbents in a survey. If companies participating are truly representative of the market, then

the data should reflect the market value of the job. The weighted mean answers the question, 'On average, what are

incumbents in a particular job paid?'

WHuman

Resource

Management

Welfare Benefit PlansERISA defines welfare benefit plans to include medical, surgical, or hospital care, sickness, accident, disability, death,

unemployment, vacation benefits, training programs, day-care centers, scholarship funds, prepaid legal services, or financial

assistance for employee housing.

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WHuman

Resource

Management

Wellness ProgramsEmployer-sponsored programs and activities designed to promote and maintain the physical and psychological health of

employees.

WHuman

Resource

Management

what-if-analysis The process of evaluating alternate strategies by answering the consequences of changes to the way a job, task, etc. is

changed.

WHuman

Resource

Management

Whistle blower

Whistle blower protection is contained in the Protected Disclosures Act 2000. The Act provides protection to employees

against retaliation for reporting illegal acts of employers. An employer may not rightfully retaliate in any way, such as

discharging, demoting, suspending or harassing the whistle blower. Employer retaliation of any kind may result in the whistle

blower bringing a personal grievance against the employer.

WHuman

Resource

Management

WhiteboardSimilar to a dry erase board, it is an electronic version. It provides a virtual classroom to view what an instructor, presenter, or

fellow learner writes down.

WHuman

Resource

Management

Whole Life AnnuityA term for a series of periodic payments, each is made only if a designated payee is alive, with the payments continuing for

that payee's entire life.

WHuman

Resource

Management

Whole Life InsuranceInsurance payable to a beneficiary at the death of the insured, whenever that occurs. Premiums may be payable for a specified

number of years (limited payment life) or for life (straight life). The premiums may remain level or decrease (by accumulating

cash in the initial years of the policy).

WHuman

Resource

Management

Wide-Area Network

(WAN)A computer network that spans a relatively large geographical area. Also called 'WAN.'

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WHuman

Resource

Management

Windfall An unexpected legacy, or other gain.

WHuman

Resource

Management

Window Pension

PlansPrograms that provide incentives for voluntary retirement.

WHuman

Resource

Management

Window PeriodThe 10-day period, when insiders may exercise their stock-appreciation rights for cash without violating Securities and

Exchange Commission rules.

WHuman

Resource

Management

Wireless Application

Protocol (WAP)A global standard for developing applications over wireless communication networks.

WHuman

Resource

Management

Wireless Markup

Language (WML)

XML based language that allows a smaller version of WebPages' text to be viewed on cellular phones and personal digital

assistants.

WHuman

Resource

Management

Withdrawal Formal withdrawal or separation from an alliance or contract. See also lapse.

WHuman

Resource

Management

Withdrawal ProvisionA life insurance provision that permits the policy owner to reduce the amount in the policy's cash value by taking up to that

amount in cash.

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WHuman

Resource

Management

Withholding Income tax withheld from employees' wages and paid directly to the government by the employer.

WHuman

Resource

Management

Witness Duty LeaveAllowing employees to take time off from work to appear before a court of law or other judicial proceeding if they are

subpoenaed or a party to the action.

WHuman

Resource

Management

Work CoachingCoaching (work coaching) is a method used by managers and supervisors to provide positive or constructive feedback to

employees to help them continue excellent performance or identify ways to improve performance.

WHuman

Resource

Management

work sample The use of number of random samples to determine the frequency with which certain activities are performed.

WHuman

Resource

Management

Work-Design

VariancesDifferences that exist in similar jobs within two or more organizations.

WHuman

Resource

Management

worker efficiency A measure (usually computed as a percentage) of worker performance that compares the standard time allowed to complete a

task to the actual worker time to complete it.

WHuman

Resource

Management

Workers'

Compensation

Government-mandated insurance that provides benefits to covered employees and their dependents if the employee suffers

job-related injury, disease, or death. For more information, see DLC Course 63: Workers' Compensation .

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WHuman

Resource

Management

Working Capital Assets available for use in the production of further assets.

WHuman

Resource

Management

Work-life BalanceHaving a measure of control over when, where and how an individuals works, leading to their being able to enjoy an optimal

quality of life. Work-life balance is achieved when an individual‘s right to a fulfilled life inside and outside paid work is accepted

and respected as the norm, to the mutual benefit of the individual, business and society.

WHuman

Resource

Management

Works CouncilsA council representing employer and employees of a plant or business to discuss working conditions etc. May also be a

committee representing the workers elected to negotiate with management about grievances and wages etc.

WHuman

Resource

Management

WorkstationA general-purpose computer designed to be used by one person at a time and which offers higher performance than normally

found in a personal computer, especially with respect to graphics, processing power and the ability to carry out several tasks at

the same time.

WHuman

Resource

Management

WorkweekGenerally a fixed period of 168 hours (7 consecutive 24-hour periods). The employer establishes the workweek. It may begin

on any day of the week and at any hour of the day. Under FLSA, a workweek is 40 hours long with no daily hour limit.

WHuman

Resource

Management

World Wide Web

(WWW)

A collection of Internet sites that offer text and graphics and sound and animation resources through the hypertext transfer

protocol.

WHuman

Resource

Management

World Wide Web

Consortium (W3C)

Also called W3O, this is the main body that creates standards for the World Wide Web. Based at the Massachusetts Institute

of Technology (MIT), it also produces reference software.

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WHuman

Resource

Management

Written Plan Defined by plan instruments or required under the law of a foreign country, or both.

XHuman

Resource

Management

XML Extensible

Markup LanguageIt allows programmers to define and use their own tags. XML is for the programmer only.

YHuman

Resource

Management

Year Book A school publication that is compiled usu. By a graduating class and that serves as a record of the yars‘ activities.

YHuman

Resource

Management

Year Of Service As defined by ERISA, a 12-month period during which an employee completes at least 1,000 hours of service to the employer.

YHuman

Resource

Management

Year's Basic

Exemption (YBE)

The first 10 percent of an employee's annual earnings up to the amount of the Year's Maximum Pensionable Earnings (YMPE).

As defined by the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) in Canada.

YHuman

Resource

Management

Year's Maximum

Pensionable Earnings

(YMPE)

The maximum amount of employment earnings that, after deducting the Year's Basic Exemption, can be used to determine an

individual's benefits under the Canada Pension Plan and Quebec Pension Plan.

YHuman

Resource

Management

Years of Experience Total years of directly related experience in a position for any and all employers.

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YHuman

Resource

Management

YRT (Yearly

Renewable Term

Insurance)

Insurance that allows an individual to continue the coverage at the end of the year for a specified number of years.

ZHuman

Resource

Management

Z-Score The position of a variable as it relates to the mean of the entire dataset.

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