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Why it pays to invest in positive psychological capital

Positive psychological capital

Time to nurture your inner HERO

Estimated reading time 8 min
WHY IT PAYS TO INVEST IN POSITIVE PSYCHOLOGICAL CAPITAL - A CONCEPT OF ORGANIZATIONAL PSYCHOLOGY

Positive psychological capital (PsyCap for short) describes a core construct for well-being that is based on appreciation and positive emotions. Originally related to an organizational context, a pronounced PsyCap also contributes to increased general life satisfaction.

In the following blog post, we outline the four resources of PsyCap, look at the construct in the context of leadership behaviour and individual willingness to change within organizations and describe valuable exercises and tips on how you can strengthen your positive psychological capital.

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THE FOUR RESOURCES - STRENGTHENING YOUR INNER HERO WITH HOPE, SELF-EFFICACY, RESILIENCE AND OPTIMISM

The PsyCap goes beyond traditional human and social capital and describes the characteristics of four specific resources of each person:

  • Hope
  • Self-efficacy
  • Resilience
  • Optimism

The acronym HERO is derived from the original English words Hope, Self-Efficacy, Resilience and Optimism.

PsyCap is defined as a positive developmental state of an individual's above-mentioned resources, i.e. as a rather temporary and situation-specific characteristic that can be developed and changed. This state variable can therefore be influenced more strongly than trait-related, usually permanent personality traits.

The pioneer of this construct is Fred Luthans (2004), who believes that growth in organizations should focus on psychological rather than pedagogical development.

He argues that the psycap of employees serves as a competitive advantage, as this resource is less easily imitated by competitors than physical, structural or financial resources. Positive psychological capital is associated with a number of desirable effects in the way employees feel and behave.

Luthans emphasizes PsyCap as a key indicator of performance, job satisfaction and employee retention. People with a high PsyCap tend to be intrinsically motivated, strive for individual development and show growth in areas of work such as creativity and innovation. Furthermore, negative correlations with cynicism, intentions to quit, stress and anxiety have been empirically proven.

Why it pays to invest in positive psychological capital

Influencing the PsyCap of employees
PSYCAP & LEADERSHIP

The PsyCap as a psychological, individual resource of an employee can be influenced by management behavior. An influence can be due to the role model function of a manager, among other things. If employees perceive their manager's behavior as positive and motivating, it is possible that they will try to imitate it or be inspired by it.

Certain leadership styles also shape the PsyCap of employees. For example, servant leadership, which focuses on the individual development and empowerment of employees, has an influence on increasing their positive psychological capital: in order to support employees in reaching their full potential, the manager promotes their self-confidence, inspires their trust and provides information, resources and feedback.

She motivates her team by signaling confidence in their abilities and a general positive expectation. This persuasion can lead employees to achieve a higher sense of self-efficacy or self-confidence. Servant leaders are characterized as leaders who care about the well-being of their employees and offer (emotional) support through their empathy. This perception of support leads to increased resilience, as employees experience support rather than reprimand as a result of mistakes. Intrinsic hope and lived optimism can also be triggered by the skills of a servant leader.

The reaction of employees
PSYCAP & WILLINGNESS TO CHANGE

The topic of readiness for change is also closely linked to the PsyCap concept. It helps to understand attitudes and behaviours towards organizational change. As already pointed out, the construct is understood as a state variable that can strengthen or weaken over time in different contexts, i.e. it can be shaped accordingly. The functioning of the construct is to be understood as follows: A person's prevailing psychological resources encourage positive and proactive engagement with their environment, which in turn expands them further. New relationships and expertise can thus be developed as employees' actions take them beyond their conventional habitus. Psychological resources are particularly crucial in times of turbulence and change. Individuals with high levels of positive psychological capital strive for development and success, regardless of the obstacles or changes they face. It is important that employees are aware of their own abilities in order to face challenges optimistically and thus positively and, as a result, demonstrate an increased willingness to change.

In addition to an increased individual willingness to change, people with a pronounced positive psychological capital also have the ability to cope better in crisis situations than people with a lower PsyCap. The resilience dimension in particular is certainly a resource that has been demanded of many people and organizations in recent months as a result of the coronavirus crisis. The focus has increasingly shifted to psychological and mental resilience. As the soul's immune system, resilience helps us to deal with challenging situations as an emotional defense mechanism. As resilience is one of the PsyCap's resources, it can also be trained and improved over the course of a lifetime. Small exercises and routines that are established in everyday life can help to increase not only resilience but also the other components of the PsyCap: optimism, hope and self-efficacy.

questions & answers
Brainstorming

How to strengthen your PsyCap and that of those around you
Exercises & tips from our day-to-day consulting work

It should be noted that positive psychological capital has different levels of effectiveness. On the one hand, the PsyCap shows positive effects on an emotional level and contributes to health, well-being, positive emotions and satisfaction. On the other hand, it shows a strengthening of aspects such as productivity, flexibility, employee engagement and general performance on the organizational/work-related level.

Let yourself be inspired by the short exercises and tips for managers and their employees to promote a general awareness of the construct and to raise awareness in your organization or in your private environment for strengthening positive psychological capital.

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Sonja Neubauer - LEITWERK Consulting
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Sonja Neubauer
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Source references:

  • Avey, J. B. (2014): The left side of psychological capital: New evidence on the antecedents of PsyCap, in: Journal of Leadership & Organizational Studies, 21. Jg. (2), S. 141–149.
  • Avey, J. B./Reichard, R. J./Luthans, F./Mhatre, K. H. (2011): Meta-Analysis of the impact of positive psychological capital on employee attitudes, behaviors, and performance, in: Human Resource Development Quarterly, 22. Jg. (2), S. 127–152.
  • Avey, J. B./Wernsing, T. S./Luthans, F. (2008): Can positive employees help positive organizational change? Impact of PsyCap and emotions on relevant attitudes and behaviors, in: The Journal of Applied Behavioral Science, 44. Jg., S. 48–70.
  • Coggins, E. D./Bocarnea, M. C. (2015): The impact of servant leadership to followers’ psychological capital: A comparative study of evangelical Christian leader-follower relationships, in the United States and Cambodia, in: Journal of Leadership, Accountability and Ethics, 12. Jg., S. 111–144.
  • Kirrane, M./Lennon, M./O’Connor, C./Fu, N. (2016): Linking perceived management support with employees’ readiness for change: the mediating role of psychological capital, in: Journal of Change Management, 17. Jg. (1), S. 1–20.
  • Liden, R. C./Wayne, S. J./Zhao, H./Henderson, D. (2008): Servant leadership: Development of a multidimensional measure and multi-level assessment, in: The Leadership Quarterly, 19. Jg. (2), S. 161–177.
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