HR Admins can configure dropdown lists by clicking on the Tool icon that is displayed adjacent to it. 

Configure dropdown options

On clicking the Tool icon, a popup appears that lists all the current options. You can modify the list or add new options. When the list is ready, click Done.

Modify lists

HR Admins may also configure most dropdown options from the Configure menu. They have been organised by the screen where they appear in CiviHR. 

Modify dropdowns from configure menu