There are LOTS of different ways to schedule "shift work" depending on the needs of the industry. In short, shift work is the idea of making use of the fact that your factory is available 24 hours a day and not just during the times between 9 in the morning and 5 in the afternoon. Shift work allows you to schedule in a way where a company's production capabilities are maximized because they are always "on."
The most common way to schedule shift work is by dividing the day into three "chunks," most commonly 12AM to 8AM, 8AM to 4PM, and 4PM to 12PM. Workers work only one of the shifts and rotate in and out of stations.
This is only one example, though. Shift work can take many different flavors depending on company needs. For example, some businesses run four 12 hour shifts instead of 5 eight hour ones. Some split the day up (waiters, for example) with a break in the middle (in the case of waiters, because there aren't many customers between lunch and dinner!) The link below will take you to a giant lists of possibilities.
Your reference to "circadian rhythm" has to do mostly with the 12AM to 8AM shift. The circadian rhythm, when referred to as an ergonomics topic, is a complicated biological "clock" inside of people that governs the sleep/wake cycle. Most people are "wired" to be awake during the day and asleep at night. When you get people to work a 12AM to 8AM shift, you are keeping them up when their body is wired to be asleep. Their body must adjust to the new pattern, but in the meantime, it will be difficult for the worker. The worker may have insomnia during the day and have trouble staying awake (or being alert) during their shift. Driving home after the shift can also be a dangerous thing and lead to "falling asleep at the wheel." The adaptation time varies by individual, and while some drugs are available to help the process (legal ones,) time is usually the best adapter. Some people may never feel right working at night and will choose to quit or transfer to an earlier shift.