The Additional Fields can be created if the out of the box set of fields available on the Employee setup screen is not enough to define all of the necessary attributes of an employee record.
The Additional Field first need to be created vis the steps documented on the linked page.
These fields then will appear under the Additional Fields tab on an employee record. The values in these fields can be updated by an administrator or can form part of the employee data import. The employees can then be assigned to time codes, expense type, accrual rules, policies, extracts, etc. based on these values, or it can be used for reporting purposes.