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HR, Compensation and Benefitsbeqom's HR Terms and Definitions glossary overview page was made to help you navigate the world of HR, Compensation and Benefits.
Application Programming Interface; refers to a connector between two software applications that allows them to communicate with each other and send data back and forth. A compensation application may provide APIs to communicate with other systems such as HR, CRM, ERP, etc.
Amounts to be held in reserve to pay expected future compensation that will be due and payable at specific points in time. This is important for the Finance group in their financial planning and reporting, as it represents a liability and has an impact on cash flow. A compensation system should be able to forecast needed accrual amounts.
Revenue recognition rule by the US Financial Accounting Standards Board (FASB), with a similar rule (IFRS 15) being issued by the International Accounting Standards Board (IASB), dealing with revenue for contracted goods or services that are delivered over time, such as software subscriptions. In dealing with the complexities brought about by these time-based revenue recognition rules an automated system can greatly reduce administrative time and effort while improving accuracy.
A computer technology, often used in conjunction with Machine Learning, that can analyze massive amounts of information and be used to support compensation tasks like establishing localized pay scales, ensuring pay equity, removing bias from compensation decisions, predicting performance, optimizing costs, and improving the employee experience, among others. Use of AI-driven compensation technology can mitigate the risk of employee turnover. (See also Machine Learning.)
Increase in the commission rate for higher attainment levels. For example, commission rate might be 3% on the first 200k of revenue, 4% on the next 200k, then 5% for everything over 400k. Or can be based on quota attainment, for example, 3% up to 80% of quota, 4% from 81-120% of quota, and 5% over 120% of quota. Also known as a "kicker".
The degree to which a measurable target or quota has been achieved, expressed as a percentage. Often a factor in sales incentive or bonus calculations.
Pays based on accomplishing specific activities or milestones; does not involve a quota. For example, a rep might be paid $500 for each sale of Product X, or $100 for each net new customer contract.
A performance review which is performed on each anniversary of an employee's hire date, and may be tied to a pay increase. See also Focal Point Review.
Many compensation processes require review and acceptance of pay decisions. These approvals may follow a simple reporting hierarchy, or may be more complex if there are matrixed responsibilities where multiple approvers need to sign off on a pay decision. Approvals (and rejections), along with any reason codes or commentary, should be recorded and tracked in a traceable way to allow for auditing and compliance.
Wages paid for work for a specified amount of time, usually expressed as an hourly rate. Does not include overtime or incentives.
A structured framework outlining an organization’s approach to employee pay, including base salary, bonuses, incentives, and benefits. A well-designed compensation plan ensures internal equity, market competitiveness, and compliance. Managing complex compensation plans effectively often requires dedicated compensation technology to ensure accuracy, transparency, and alignment with business strategy.
A specialized technology solution designed to streamline the planning, execution, and analysis of compensation programs, including salary structures, bonuses, incentives, and pay equity. By automating complex calculations, ensuring compliance, and providing data-driven insights, compensation management software enhances accuracy, efficiency, and transparency, supporting organizations in making equitable and strategic compensation decisions.
The strategic process of designing, administering, and optimizing employee pay structures to align with organizational goals, market conditions, and regulatory requirements. Effective compensation management ensures fairness, transparency, and motivation while minimizing compliance risks. Best practice involves leveraging dedicated compensation management technology to enhance accuracy, efficiency, and data-driven decision-making.
The strategic rethinking and restructuring of human resources functions to align more closely with organizational goals and evolving workforce needs. It often involves modernizing processes, systems, and structures—such as performance management or compensation frameworks—and may include adopting technologies that support data-driven decision-making and pay equity.
An organizational environment where individuals and teams consistently meet or exceed expectations through accountability, continuous improvement, and alignment with strategic goals. It is often reinforced by transparent performance management and equitable compensation practices, which together help motivate employees, recognize contributions fairly, and sustain long-term organizational effectiveness.
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