Add Value By Investing in Psychological Capital

Brandon Young, Ph.D., Insights Consultant & Organizational PsychologistEmployee Engagement, Leadership1 Comment

Considering the US is the unhappiest it’s been since the World Happiness Report was first published in 2012, a focus on positivity may be in order. While the topic of positivity may sometimes feel like a stale self-help book, there is a wealth of rigorous scientific research illustrating the relationship between positivity and well-being across a variety of life domains. Fortunately, positivity can be measured, developed, and managed for performance enhancement at work (Luthans, 2002). Much of what we know about positivity in the workplace comes from research on the evidence-based psychological capital (PsyCap) approach.

PsyCap is an individual’s positive psychological state of development and consists of four psychological resources (Luthans, 2002; Luthans, Youssef, & Avolio, 2007):

  1. efficacy or confidence to undertake and exert the effort required to tackle challenging tasks;
  2. optimism about succeeding in the present and the future; 
  3. hope in the sense that one has goals, and directs energy toward those goals in order to succeed;
  4. and resilience to bounce back and persist in the face of adversity.

Why should employers pay attention to PsyCap?

A recent meta-analysis supports the positive relationships between PsyCap and employee attitudes (e.g., job satisfaction, organizational commitment, psychological well-being), employee behaviors (e.g., citizenship), and multiple objective and subjective measures of performance (Avey, Reichard, Luthans, & Mhatre, 2011). This study also found significant negative relationships with undesirable employee attitudes (cynicism, turnover intentions, job stress, anxiety) and behaviors (deviance). Like psychological safety, PsyCap is linked to creative performance, problem solving and innovation (e.g., Sweetman, Luthans, Avey, & Luthans, 2011; Luthans, Youssef, & Rawski, 2011). Additionally, PsyCap is related to health outcomes such as BMI and cholesterol levels, as well as satisfaction with one’s health (Luthans, Youssef, Sweetman, Harms, 2013) and satisfaction with relationships and diagnosed mental health issues and substance abuse post military deployment (Krasikova, Lester, Harms, 2015). These health and relationship issues can spill over into the workplace and have significant impact on productivity.

How can organizations influence PsyCap?

Job demands can often create distress leading to exhaustion, anxiety, and impaired health; fortunately, PsyCap can minimize stress and anxiety and can be changed and developed. Job and organizational characteristics such as rigid structures, limited autonomy, toxic leadership, poor team dynamics, and insufficient resources can hinder PsyCap and its positive outcomes (Luthans & Youssef, 2017). Alternatively, PsyCap is manifested when employees feel supported, empowered, recognized, appreciated, rewarded, allowed to be authentic and innovative, and treated fairly. How do your employees feel? Have you asked them?

Leader behaviors are critical to how employees experience the workplace and can influence development of PsyCap. Further, leader positivity (or negativity) is contagious and can trickle down to followers enhancing their PsyCap and performance (Avey, 2011). Newmeasures research indicates that leader behaviors such as the following are influential to employee engagement:

  • Promoting career and skill development – Do managers know and understand the career goals of their employees? Do they have regular, meaningful feedback conversations and set and track goals with employees? Have clear career paths, opportunities for job rotation or enlargement, or less formal opportunities for growth been identified and openly communicated?
  • Encouraging new ideas and inviting input in decision making – Where are new ideas needed most (e.g., customer experience, products/services, process improvement)? Are new ideas and suggestions welcomed? Is reasonable risk tolerated? Do employees understand how new ideas and input are prioritized and responded to? Are ideas rewarded or publicly recognized?
  • Communicating an inspiring vision – Do managers and employees feel the organization is on the “right track?” Do leaders and managers share an optimistic view with employees? Are employees reminded how they contribute to organizational success?
  • Providing recognition and appreciation – Do you know how your employees like to be recognized? When was the last time you provided “on the spot” recognition for excellent work? Have you thanked your employees lately?
  • Encouraging and providing time for work-life balance and well-being – Do managers know what work-life balance means to each of their employees? Are work processes and activities efficient? Do leaders model work-life balance? Is it “okay” to take time off and leave the office behind?

Considering these same behaviors can influence hope, efficacy, resilience, and optimism, it may be worthwhile to discuss some of these topics with your employees.  You may not be able to remedy everything but listening and responding are a great start.

  • Anonymous says:

    Men and women are at risk of different fitness factors. In societies where women earn less than guys or are less knowledgeable, they will be at more risk than guys for bad fitness.