It directly translates to "peace" and is used as a greeting similar to "hello" in English.
Here are some other Yiddish greetings:
* "גוטן טאג" (Guten Tag): Good day
* "גוטן אווענט" (Guten Ovent): Good evening
* "מאָרגן" (Morgen): Morning
* "צו דיר" (Tsu dir): To you (informal, often used between friends)
Keep in mind that "sholem" is the most universally used and understood greeting in Yiddish.