HR Terms Demystified

Human Resources (aka HR), like most industries, has created its own jargon, abbreviations, and initialisms to short-cut long terms and names to make things simpler to write and reference. This is a great time saver, but makes things a heck of a lot more confusing for people outside the industry to understand what’s being referenced and how those things can be beneficial to their small business.

Clients ask me all the time, “What the heck is ___?” so I’ve set out to demystify things. Below are the top 5 HR-related terms that I’ve seen stir up the most head tilts in my work.

1. What the heck is a … PEO ?

P.E.O. stands for Professional Employment Organization and is an employment structure where employers partner with an external organization to create a co-employment relationship for their employees. In this relationship, the PEO and the employer share employer responsibilities including state specific compliance requirements, reporting and filings and access to a plethora of benefits including health insurance, commuter benefits and 401K options.   

This offering is ideal for employers looking to hire in multiple states and/or want to offer an array of benefits to their employees.

2. What the heck is the…ADA ?

The term ADA is short of the Americans with Disabilities Act. A federal civil rights law that prohibits discrimination against individuals with disabilities in all areas of public life, including jobs, schools, transportation, and all public and private places that are open to the general public. Although compliance is only required for employees with 15+ employees, it is best practice to include inclusive hiring practices and provide needed accommodations no matter how many employees you have!  

When people can show up to work as their full selves it builds a culture of care where people feel supported and seen which leads to happier more engaged employees.

3. What the heck is an… HSA?

HSA stands for Health Savings Account, a pre-tax savings account that employees can use on health-related expenses. Note that you can only set up these types of accounts if you’re employees are enrolled in a high-deductible healthcare plan (HDHP). Ah! Two terms in one post! 

Contributing to an HSA is a great way to donate towards the cost of your employees health-related needs if you can’t cover a full plethora of benefits.   

4. What the heck is a… PIP?

PIP stands for Performance Improvement Plan. This is a tool managers can use to assess misalignment in performance or behavior and help define goals to help an employee become more successful in their role. Typically it is not used for things easily addressed or corrected in regular check-ins, but is used to convey the seriousness of a behavior or performance issue that is having a serious impact on the team, clients, and/or a company.

BIG NOTE: A PIP should NOT(!!!) be used as a predetermined termination notice. If there’s open communication, the goals of the plan are clear and measurable, and reasonable time is allowed for change to happen, an employee can complete the plan and still be a successful part of your company. I’ve seen it happen! 

5. What the heck are… OKRs?

OKRS stands for Objectives and Key Results. Although not exclusive to the HR world, this goal-tracking and measuring model is used to connect individual and company-wide goals within an organization. These goals (objectives) are set on a quarterly basis and are measured by working towards pre-defined, key results. This model helps align each team member's work goals with those of the entire company and offers transparency around what the priorities are for a given team or team member.

OKRs can be a very useful tool for managers who are grappling with connectivity and shared purpose when they support very differing roles (say a therapist and an administrative assistant). They are also a great tool for assessments and performance conversations. 

Thanks for following along! I’d love to hear your feedback on these or any other HR terms that you’ve been curious about in the comments below.

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