HR Vocabulary You'll Hear Week One (40 Terms, Decoded)

60-Second Summary

Five categories of jargon: systems, comp, performance, legal, talent.
Most confusion lives between three pairs: ATS vs HRIS, RSU vs option, exempt vs non-exempt.
If a term has multiple legal definitions across jurisdictions, treat the term as ambiguous until proven otherwise.

Every profession has its private dictionary. HR's is bigger than most because three professions overlap inside it — legal, finance, and behavioral science. Here's the decode key for the 40 terms you'll meet first.

Systems and tools

Systems vocabulary

Term	Stands for / means	Watch out for
ATS	Applicant Tracking System (Greenhouse, Lever, Ashby)	Not the same as the HRIS
HRIS / HCM	Human Resource Information System / Human Capital Management — record of truth for employee data	HCM is the broader/upmarket version of HRIS
LMS	Learning Management System (training delivery)	Different from a talent-management system
TMS	Talent Management System — reviews, goals, succession	Sometimes bundled with HRIS
EOR	Employer of Record — third party that legally employs your overseas hire	Different from a PEO (which co-employs)
PEO	Professional Employer Organisation (US-centric co-employment)	EOR ≠ PEO
Payroll provider	ADP, Gusto, Deel — runs gross-to-net and files taxes	Separate from HRIS in most companies
eNPS	Employee Net Promoter Score (engagement pulse)	Trend matters more than absolute score

Compensation and equity

Comp vocabulary

Term	Means	Watch out for
OTE	On-Target Earnings — base + variable at 100% attainment	Used mostly in sales roles
TC / TCC	Total Cash Compensation — base + variable, no equity	Different from total comp
Total comp	TCC + annualised equity value	How equity is valued is contested
RSU	Restricted Stock Unit — share that vests over time, taxed at vest	No strike price
ISO / NSO	Incentive / Non-qualified Stock Option — needs to be exercised	Tax treatment differs
409A	US private-company valuation for setting strike	Required by IRS for option grants
Cliff	Period before any equity vests (usually 1 year)	Leaving on day 364 = 0 vested
Refresh	Top-up equity grant after initial vest	Usually written into year 3+ packages
Pay band	Min / mid / max for a role at a level	Not the same as the offer range

Performance and growth

Performance vocabulary

Term	Means	Watch out for
PIP	Performance Improvement Plan — formal 30/60/90-day support	Often used as cover for exit; should not be
Calibration	Cross-team session to align ratings	Most companies skip this and pay later
9-box	Performance × Potential matrix for succession	Only useful when applied honestly
HiPo	High-Potential — succession candidate	Hidden lists cause damage; be transparent
OKR	Objectives & Key Results — goal framework	Not a performance review tool
KPI	Key Performance Indicator — ongoing metric	Different from a goal
Stretch role	Role one level above current	Most growth happens here

Legal and compliance

Legal vocabulary

Term	Means	Watch out for
At-will	US — either party can terminate any time	Doesn't apply in most other countries
Exempt / non-exempt	US — whether overtime rules apply (FLSA)	Misclassification is the #1 wage-hour risk
1099 / W-2	US — contractor vs employee tax form	Doesn't make someone a contractor by itself
IR35	UK — contractor status test	HMRC determination, large fines
GDPR	EU data-protection regulation (affects HR data)	Applies to any EU resident's data
DPA	Data Processing Agreement — contract with HR vendors	Required under GDPR
EEO	Equal Employment Opportunity (US)	Often confused with DEI — different scope

Talent and lifecycle

Talent vocabulary

Term	Means	Watch out for
Headcount vs FTE	Bodies vs Full-Time Equivalents	Two part-time = 1 FTE
Backfill	Replacement hire for an exiting role	Different from a net-new hire
Time-to-fill	Open requisition → signed offer	Different from time-to-hire
Regret attrition	Departures of people you wanted to keep	Total attrition can mislead
Skip-level	Meeting between an employee and their manager's manager	Powerful when consistent
Stay interview	Conversation before someone resigns, not after	Higher ROI than exit interviews

Rule of thumb

If you're new and a term is used in three different meetings without definition, ask. Nobody will judge you in week one — but they will judge you in week six.

References

Lattice — HR glossary — Lattice
Holloway — Equity Compensation Guide — Holloway
SHRM — HR glossary — SHRM

Written by Pawan Joshi.Sources cited inline.

First published 16 Jun 2026See site changelog →