28  Competency Mapping and Balanced Scorecard

28.1 What is a Competency?

The word competency entered HRM through David McClelland’s 1973 American Psychologist paper, “Testing for Competence Rather than Intelligence”. McClelland argued that traditional intelligence and aptitude tests poorly predicted job success; competencies — the underlying characteristics that produce outstanding performance — predicted it far better.

A competency is an underlying characteristic of a person that is causally related to effective or superior performance in a job.

TipWorking Definitions
Author Definition Foregrounds
Lyle & Signe Spencer (1993) “An underlying characteristic of an individual that is causally related to criterion-referenced effective or superior performance in a job.” Behaviour-driven
Richard Boyatzis (1982) “A capacity that exists in a person that leads to behaviour that meets job demands and produces desired results.” Capacity → behaviour
David McClelland The clusters of life outcomes that distinguish outstanding performers from average ones. Outstanding vs average
Hamel & Prahalad (1990; firm-level) “Core competence is the collective learning in the organisation, especially how to co-ordinate diverse production skills.” Strategic / organisational
Klemp “An underlying characteristic of a person that results in effective and/or superior performance in a job.” Causal
NoteBoyatzis — bringing competency into management

Richard Boyatzis’s The Competent Manager (1982) operationalised McClelland into a management framework. Boyatzis identified 21 generic management competencies and the Job Competency Assessment Method (JCAM).

28.2 Iceberg Model — Spencer & Spencer

Spencer & Spencer’s competency iceberg (1993) is the most-tested visual. Skills and knowledge sit above the waterline — easily seen, easily trained. Self-concept, traits and motives sit below — invisible, slow to change.

TipSpencer & Spencer’s iceberg — five layers
Layer Visibility Type Examples
Knowledge Visible (above water) Information one has Accounting principles
Skill Visible Demonstrated ability Excel, presentation
Self-concept Hidden (below water) Attitudes, values “I am a leader”
Traits Hidden Stable personality Conscientiousness
Motives Hidden Unconscious drive Need for achievement 

flowchart TB
  K[Knowledge<br/>Visible] --> SK[Skill<br/>Visible]
  SK --- W[~ Waterline ~]
  W --- SC[Self-concept<br/>Hidden]
  SC --> T[Traits<br/>Hidden]
  T --> M[Motives<br/>Hidden]
    classDef default fill:#003366,color:#ffffff,stroke:#ffcc00,stroke-width:3px,rx:10px,ry:10px;

Above the waterline — easier to train, hire for. Below the waterline — hire for, do not train for.

28.3 KSAO Model

A complementary US-public-service classification (Office of Personnel Management):

TipKSAO model
Letter What
K Knowledge
S Skills
A Abilities
O Other characteristics (personality, motivation, values)

28.4 Types of Competency

TipFive common competency typologies
Typology Examples
Generic / Core / Threshold Common to all employees in the organisation
Functional / Technical / Specific Function-specific (finance, marketing, R&D)
Managerial / Leadership Common to managerial roles
Behavioural Customer focus, teamwork, integrity
Differentiating / Distinguishing Separate outstanding from average performers
NoteThreshold vs Differentiating

Threshold competencies are the minimum required. Differentiating competencies are those that separate outstanding from average performers. Most modern competency frameworks distinguish the two.

28.5 Core Competence — Hamel & Prahalad (1990)

At the firm level, C.K. Prahalad and Gary Hamel’s HBR article “The Core Competence of the Corporation” (1990) defined core competence as the collective learning of the organisation, especially how to co-ordinate diverse production skills and integrate multiple streams of technology.

TipThree tests of a core competence (Prahalad-Hamel)
  • Customer value — significantly contributes to perceived customer benefits.
  • Competitive differentiation — competitively unique.
  • Extendability — applies to multiple products / markets.

Iconic examples: Honda’s small-engine mastery · Sony’s miniaturisation · Canon’s optics + microelectronics.

28.6 Competency Mapping

Competency mapping is the process of identifying the competencies required for a job and the level of proficiency required in each. It produces a Competency Dictionary and Competency Profiles for roles.

28.6.1 Process of Competency Mapping

TipEight-step competency mapping process
  1. Decide the position(s) to be mapped.
  2. Conduct job analysis — what does the role do?
  3. Identify performance criteria — what does success look like?
  4. Choose performance samples — outstanding vs average performers.
  5. Conduct Behavioural Event Interviews (BEI) — McClelland-Boyatzis technique.
  6. Identify competencies and their behavioural indicators.
  7. Develop competency dictionary and role profiles.
  8. Validate and apply — to recruitment, training, appraisal, succession.

28.6.2 Behavioural Event Interview (BEI)

The signature method, developed by McClelland and refined by Spencer & Spencer. Interviewees describe 5-6 critical incidents of past behaviour using questions like:

  • “Tell me about a time when…”
  • “What were you thinking?”
  • “What did you do?”
  • “What was the outcome?”

Analysis identifies recurring patterns of behaviour that predict superior performance.

28.6.3 Methods of Competency Identification

TipMethods of competency identification
  • Behavioural Event Interview (BEI) — McClelland-Spencer.
  • Repertory Grid (Kelly’s Personal Construct Theory).
  • Focus groups with high-performers.
  • Expert panel discussion.
  • Job analysis (Topic 24).
  • Critical Incident Technique (Flanagan 1954).
  • Surveys and questionnaires.
  • 360-degree feedback mining.

28.6.4 Lominger Architect — 67 Competencies (Lombardo-Eichinger)

The Lominger Leadership Architect (developed by Michael Lombardo and Robert Eichinger) provides 67 competencies grouped under six clusters (e.g., Strategic Skills, Operating Skills, Energy & Drive, Personal & Interpersonal Skills, Courage, Position Skills). Widely used by Korn Ferry.

28.7 Applications of Competency Mapping

TipWhere competency frameworks are used
  • Recruitment & Selection — competency-based interviews; STAR/BEI questions.
  • Training & Development — close competency gaps.
  • Performance Management — competency-based appraisal.
  • Career Pathing & Succession Planning — competency progression.
  • Compensation — competency-based pay (CBP).
  • Talent Management — high-potential identification.
  • Job Design — competency-anchored role profiles.
  • Organisation Development — culture change anchored to behaviours.

28.8 Balanced Scorecard — Kaplan and Norton

Robert S. Kaplan and David P. Norton’s Balanced Scorecard (BSC) — Harvard Business Review (1992), elaborated in The Balanced Scorecard: Translating Strategy into Action (1996) — measures organisational performance across four perspectives instead of just the financial one.

TipThe four perspectives of the BSC
Perspective Question Sample metrics
Financial How do we look to shareholders? ROI · Revenue growth · Profit
Customer How do customers see us? NPS · Market share · Retention · Quality
Internal Business Process What must we excel at? Cycle time · Defect rate · Innovation
Learning & Growth (Innovation) Can we continue to improve and create value? Training hours · Employee satisfaction · Knowledge bases 

flowchart TB
  V[Vision &<br/>Strategy]
  V --- F[Financial<br/>perspective]
  V --- C[Customer<br/>perspective]
  V --- I[Internal Process<br/>perspective]
  V --- L[Learning & Growth<br/>perspective]
    classDef default fill:#003366,color:#ffffff,stroke:#ffcc00,stroke-width:3px,rx:10px,ry:10px;

28.8.1 Why “Balanced”?

The BSC balances:

  • Financial vs non-financial measures.
  • Short-term vs long-term focus.
  • Lagging indicators (results) vs leading indicators (drivers).
  • External vs internal measures.
  • Past, present and future orientations.

28.8.2 Strategy Map — Kaplan-Norton (2004)

In Strategy Maps: Converting Intangible Assets into Tangible Outcomes (2004), Kaplan-Norton added the strategy map — a visual showing cause-effect links across the four perspectives. The chain typically reads bottom-up:

TipStrategy-map cause-effect chain

Learning & Growth (skills, culture, IT) → Internal Process (operational excellence, innovation, customer management) → Customer (value proposition delivered) → Financial (revenue + productivity).

28.8.3 Strategy-Focused Organisation — Five Principles (Kaplan-Norton 2001)

TipKaplan-Norton’s five principles of the strategy-focused organisation
  • Translate strategy into operational terms (BSC + Strategy Map).
  • Align the organisation to strategy.
  • Make strategy everyone’s job.
  • Make strategy a continual process.
  • Mobilise change through executive leadership.

28.8.4 Kaplan-Norton’s Six-Stage Execution Process

From The Execution Premium (2008):

TipKaplan-Norton’s six-stage execution loop
  1. Develop the strategy
  2. Plan the strategy (BSC + Strategy Map)
  3. Align the organisation
  4. Plan operations
  5. Monitor and learn
  6. Test and adapt the strategy

28.8.5 Implementing the BSC

TipBSC implementation steps
  • Define the vision and strategy.
  • Identify the four perspectives and strategic themes.
  • Develop objectives under each perspective.
  • Construct the strategy map with cause-effect links.
  • Define KPIs / measures for each objective.
  • Set targets for each measure.
  • Identify initiatives to drive targets.
  • Cascade the BSC to business units and individuals.
  • Review and align periodically.

28.8.6 Strengths and Limitations

TipBSC — strengths and limitations
Strengths Limitations
Balances financial + non-financial Designing it is complex
Aligns operations to strategy Risk of becoming a measurement exercise
Translates intangible to tangible Subjective weighting of perspectives
Communicates strategy widely Requires top-management commitment
Drives behaviour change Cultural fit challenges

28.9 HR Scorecard (Becker-Huselid-Ulrich 2001)

Brian Becker, Mark Huselid and Dave Ulrich’s HR Scorecard (2001) adapts the Balanced Scorecard for HR. The HR Scorecard is itself one of four BSC family members:

TipBSC family — four related scorecards
  • Balanced Scorecard — overall organisation.
  • HR Scorecard — HR function’s contribution.
  • Customer Scorecard — customer relationships.
  • Workforce Scorecard — employee outcomes and impact.

The HR Scorecard measures HR on:

  • HR Deliverables (what HR produces).
  • High-Performance Work System (HPWS).
  • HR System Alignment (with strategy).
  • HR Efficiency.

28.10 Other Performance Measurement Frameworks

TipOther strategy-execution / measurement tools
Framework Origin Key idea
Tableau de Bord France, 1930s Predecessor of BSC — operational dashboard
Performance Pyramid McNair, Lynch, Cross (1990) Vision → CSFs → operational metrics
EFQM Excellence Model European Foundation for Quality Management (1991) Enablers + Results
Six Sigma Motorola (1986), GE Defect reduction; DMAIC
OKR (Objectives & Key Results) Andy Grove (Intel); John Doerr at Google Set audacious objectives; measure with key results
KPI Frameworks Various Critical success-factor based metrics
Skandia Navigator Leif Edvinsson (1994) Intellectual capital measurement
Triple Bottom Line John Elkington (1994) People · Planet · Profit
Beyond Budgeting Hope & Fraser (2003) Replace fixed budgets with rolling forecasts
NoteTableau de Bord vs BSC

French firms used the Tableau de Bord (dashboard) from the 1930s — earlier than the BSC. The Tableau de Bord is bottom-up and operational; the BSC is top-down and strategic. Some Indian and European firms still distinguish them.

28.10.1 OKRs — Objectives and Key Results

Andy Grove at Intel developed OKRs in the 1970s; John Doerr brought them to Google in 1999. Each OKR has:

  • Objective — ambitious, qualitative direction.
  • 3-5 Key Results — measurable outcomes.

OKRs are typically graded on a 0-1 scale; 0.6-0.7 is good (objectives are deliberately stretching). Used at Google, LinkedIn, Twitter, Intel.

28.11 Practice Questions

Q 01 McClelland Easy

The concept of "competency" in HRM was introduced in 1973 by:

  • ABoyatzis
  • BDavid McClelland
  • CSpencer & Spencer
  • DHamel & Prahalad
View solution
Correct Option: B
David McClelland, "Testing for Competence Rather than Intelligence" (1973).
Q 02 Iceberg Medium

In Spencer & Spencer's competency iceberg, which is *above* the waterline?

  • AMotives
  • BTraits
  • CSelf-concept
  • DSkill and Knowledge
View solution
Correct Option: D
Skill and Knowledge are visible (above waterline). Self-concept, traits and motives are hidden.
Q 03 Boyatzis Medium

The book *The Competent Manager* (1982), which operationalised competencies for management, is by:

  • ARichard Boyatzis
  • BLyle Spencer
  • CC.K. Prahalad
  • DDave Ulrich
View solution
Correct Option: A
Richard Boyatzis (1982) — identified 21 generic management competencies.
Q 04 Core competence Medium

"Core competence" of the corporation — collective learning across diverse production skills — was articulated in 1990 by:

  • AMcClelland
  • BHamel & Prahalad
  • CPorter
  • DMintzberg
View solution
Correct Option: B
Gary Hamel and C.K. Prahalad, *HBR* (1990).
Q 05 Threshold Medium

"Differentiating competencies" are those that:

  • AAre minimum required for a job
  • BSeparate outstanding from average performers
  • CAre unique to senior managers
  • DAre organisation-wide
View solution
Correct Option: B
Differentiating separate outstanding from average; threshold are the minimum required.
Q 06 KSAO Easy

The KSAO competency model stands for:

  • AKnowledge · Skills · Abilities · Other characteristics
  • BKnowledge · Skills · Attitudes · Outcomes
  • CKnowledge · Stamina · Aptitude · Output
  • DKnowledge · Skills · Aptitude · Opportunity
View solution
Correct Option: A
KSAO: Knowledge · Skills · Abilities · Other characteristics. US Office of Personnel Management classification.
Q 07 BEI Medium

The Behavioural Event Interview (BEI) for identifying competencies was developed by:

  • AMcClelland
  • BBoyatzis
  • CFlanagan
  • DKelly
View solution
Correct Option: A
David McClelland developed BEI; Spencer & Spencer refined and standardised it.
Q 08 BSC Easy

The Balanced Scorecard was introduced in 1992 by:

  • APorter & Lawler
  • BKaplan & Norton
  • CHammer & Champy
  • DPeters & Waterman
View solution
Correct Option: B
Robert Kaplan and David Norton, *HBR* 1992.
Q 09 BSC perspectives Medium

The four perspectives of the Balanced Scorecard are:

  • AFinancial · Customer · Internal Process · Learning & Growth
  • BSales · Marketing · Operations · Finance
  • CShort-term · Long-term · External · Internal
  • DProfit · Cash · Growth · Risk
View solution
Correct Option: A
The classic four: Financial · Customer · Internal Process · Learning & Growth.
Q 10 Strategy map Medium

In a Kaplan-Norton Strategy Map, the cause-effect chain (bottom-up) starts with which perspective?

  • AFinancial
  • BCustomer
  • CInternal Process
  • DLearning & Growth
View solution
Correct Option: D
Strategy Map flows: L&G → Internal Process → Customer → Financial.
Q 11 Lagging Medium

In BSC vocabulary, *lagging indicators* are:

  • APredictive of future outcomes
  • BOutcome / result measures
  • CDriver measures
  • DSubjective measures
View solution
Correct Option: B
Lagging = results (e.g., revenue). Leading = drivers (e.g., training, R&D spend).
Q 12 HR Scorecard Medium

The HR Scorecard adapts the BSC to HR and was developed by:

  • AKaplan & Norton
  • BBecker, Huselid & Ulrich
  • CBeer & Spector
  • DPfeffer & Sutton
View solution
Correct Option: B
Brian Becker, Mark Huselid and Dave Ulrich, *The HR Scorecard* (2001).
Q 13 Tableau Hard

The "Tableau de Bord" — predecessor of the Balanced Scorecard — originated in:

  • AUSA, 1980s
  • BFrance, 1930s
  • CJapan, 1970s
  • DGermany, 1950s
View solution
Correct Option: B
Tableau de Bord — France, 1930s — operational dashboards. Predates BSC by ~60 years.
Q 14 Hamel-Prahalad Medium

According to Hamel & Prahalad, a core competence must pass all of the following tests EXCEPT:

  • ACustomer value
  • BCompetitive uniqueness
  • CExtendability to multiple markets
  • DLow cost
View solution
Correct Option: D
Three tests: Customer value · Competitive uniqueness · Extendability. Low cost is not on the list.
Q 15 OKR Medium

OKRs — Objectives and Key Results — were originally developed at:

  • AIntel (Andy Grove)
  • BGoogle
  • CMicrosoft
  • DAmazon
View solution
Correct Option: A
Andy Grove at Intel (1970s). John Doerr brought OKRs to Google in 1999.
Q 16 Strategy-focused org Hard

Kaplan & Norton's five principles of the strategy-focused organisation include all EXCEPT:

  • ATranslate strategy into operational terms
  • BMake strategy everyone's job
  • COutsource HR completely
  • DMobilise change through executive leadership
View solution
Correct Option: C
The five: Translate strategy · Align organisation · Strategy as everyone's job · Continual process · Mobilise leadership. Outsourcing is *not* one.
Q 17 Iceberg below Medium

In the competency iceberg, "motives" are:

  • AVisible and easily trained
  • BHidden and difficult to change — hire for them
  • CSkill-level competencies
  • DEasy to assess through interviews
View solution
Correct Option: B
Motives sit deep below the waterline — hidden, difficult to develop; hire for them, do not try to train them.
Q 18 Lominger Hard

The Lominger Leadership Architect framework identifies:

  • A21 generic management competencies
  • B67 leadership competencies in 6 clusters
  • CFour leadership styles
  • DFive career stages
View solution
Correct Option: B
Lominger (Lombardo-Eichinger; now Korn Ferry) — 67 competencies in 6 clusters.
Q 19 Skandia Hard

The Skandia Navigator (1994) measures:

  • AProject schedules
  • BIntellectual capital
  • CInventory turnover
  • DMarketing ROI
View solution
Correct Option: B
**Leif Edvinsson** at Skandia (1994) developed the Navigator to measure intellectual capital — human, structural, customer.
Q 20 Match concepts Hard

Match the concept with its author:

(i) Balanced Scorecard (a) McClelland
(ii) Competency Iceberg (b) Hamel & Prahalad
(iii) Core Competence (c) Spencer & Spencer
(iv) Testing for Competence (d) Kaplan & Norton
  • A(i)-(d), (ii)-(c), (iii)-(b), (iv)-(a)
  • B(i)-(a), (ii)-(b), (iii)-(c), (iv)-(d)
  • C(i)-(c), (ii)-(d), (iii)-(a), (iv)-(b)
  • D(i)-(b), (ii)-(a), (iii)-(d), (iv)-(c)
View solution
Correct Option: A
BSC — Kaplan & Norton; Iceberg — Spencer & Spencer; Core Competence — Hamel & Prahalad; Testing for Competence — McClelland.

28.11.1 Advanced Format Questions

AR 1Assertion-ReasonHard

A: Kaplan-Norton BSC has 4 perspectives.
R: Financial, Customer, Internal, Learning & Growth.

  • ABoth true; R explains A
  • BBoth true; R does not explain A
  • CA true, R false
  • DA false, R true
View solution
Correct Option: A
AR 2Assertion-ReasonMedium

A: Competency iceberg shows visible and hidden parts.
R: Spencer & Spencer (1993) classified competencies into KSAOs.

  • ABoth true; R explains A
  • BBoth true; R does not explain A
  • CA true, R false
  • DA false, R true
View solution
Correct Option: B
S 1Statement-basedMedium

BSC perspectives: (i) Financial. (ii) Customer. (iii) Internal process. (iv) Learning & Growth.

  • AAll four
  • B(i) and (ii) only
  • C(iii) and (iv) only
  • D(i), (ii), (iii) only
View solution
Correct Option: A
S 2Statement-basedHard

Iceberg model includes: (i) Knowledge (visible). (ii) Skills (visible). (iii) Traits (hidden). (iv) Motives (hidden).

  • AAll four
  • B(i) and (ii) only
  • C(iii) and (iv) only
  • D(ii) and (iv) only
View solution
Correct Option: A

28.12 Quick Recall

ImportantQuick recall
  • McClelland 1973 — “Testing for Competence Rather than Intelligence” — origin of competency in HRM.
  • Boyatzis 1982 — The Competent Manager; 21 management competencies.
  • Spencer & Spencer 1993 — Iceberg model: Knowledge + Skill (visible) vs Self-concept + Traits + Motives (hidden).
  • KSAO: Knowledge · Skills · Abilities · Other characteristics.
  • Threshold vs Differentiating competencies.
  • Core Competence — Hamel & Prahalad (HBR 1990): 3 tests — Customer value · Competitive uniqueness · Extendability. Honda engines, Sony miniaturisation, Canon optics.
  • Competency mapping — 8 steps; BEI (McClelland); Repertory Grid (Kelly).
  • Lominger (Lombardo-Eichinger) — 67 competencies, 6 clusters.
  • Balanced Scorecard — Kaplan & Norton (HBR 1992) — four perspectives: Financial · Customer · Internal Process · Learning & Growth.
  • Strategy Map (2004) — L&G → Process → Customer → Financial.
  • Five principles of strategy-focused organisation (Kaplan-Norton 2001): Translate · Align · Everyone’s job · Continual · Mobilise.
  • HR Scorecard (Becker-Huselid-Ulrich 2001) — HR adaptation of BSC.
  • Other frameworks: Tableau de Bord (France 1930s) · Performance Pyramid · EFQM · Six Sigma · OKR (Grove at Intel; Doerr at Google 1999) · Skandia Navigator (Edvinsson 1994) · TBL (Elkington 1994) · Beyond Budgeting (Hope-Fraser 2003).