Motivation and emotion/Book/2018/Psychological capital

Psychological capital:
What is psychological capital, what are its benefits, and how can it be developed?

Overview

The term psychological capital (or simply PsyCap) was coined by Luthans in 2002 to describe the characteristics of an individual's positive psychological state of development. PsyCap theory emerged from the field of positive psychology which seeks to understand and facilitate optimal growth, flourishing and development in healthy individuals (Seligman & Csikszentmihalyi, 2000). Drawing on the findings of positive psychology, Luthans extended the theory to a workplace context under the label of positive organisational behaviour which is the study and application of positively oriented human resource strengths and psychological capacities (Luthans, Youssef, & Avolio, 2007). Until recently, the literature has predominantly focused on developing PsyCap in a work environment, however, the concept is increasingly being extended to other realms of life including sports and academic environments.

What is psychological capital?

Psychological capital (PsyCap) is the positive psychology that we as individuals inherently have - it is who we are. PsyCap theory seeks to understand positive attitudes and behaviours to enhance performance (Luthans et al., 2007). PsyCap theory is comprised of the following four psychological constructs, each of which can be developed:

hope - persevering towards goals
self-efficacy - having confidence to take on, work toward and achieve goals
resilience - bouncing back from stress and growing as a result, and
optimism - making a positive attribution about succeeding in life (Luthans et al., 2007).

PsyCap theory provides a framework for people to think about who they are and what unique strengths and attributes they have to contribute. Research suggests that boosting PsyCap is an evidence-based method of helping people to challenge their assumptions and beliefs to promote positive thinking patterns and can lead to an increase in well-being and overall satisfaction with both life and work (Avey, Reichard, Luthans, & Mhatre, 2011).

According to Luthans (2002), developing each of the psychological resources that underpin this theory is possible because they are state-like rather than trait-based constructs. This is an important distinction to make because a trait is conceptualised as unchanging whereas a state can be manipulated by learning new adaptation strategies (Reich, Zautra, & Stuart Hall, 2010).

Case study - part 1: Developing PsyCap in the workplace

Michelle is the CEO of a company that employees 90 people. She recently attended an impressive presentation on how psychological capital can enhance performance, engagement and well-being in the workforce. Convinced by the vast amount of research on the benefits of PsyCap, Michelle decided that training her staff to develop PsyCap would boost productivity to ultimately give her company a distinct competitive advantage. She had noticed that morale was low in some teams and a recent in-house survey had confirmed that job satisfaction was particularly low in the ICT department. Michelle's goal was to increase performance and create a more positive workplace culture by improving staff attitudes. Once she established that the organisation had the capacity to sustain and boost staff motivation following the initial intervention, she contracted a group of professionals to administer the training.

The four constructs of PsyCap

Figure 2. Hope, efficacy, resilience and optimism are the four constructs underpinning PsyCap

The four constructs of PsyCap (aka the HERO within) are hope, self-efficacy, resilience, and optimism. They are defined in the literature as first-order positive psychological resources which, when combined, form the second-order, core construct of PsyCap (Luthans & Youseff, 2017). Considerable research has been published on each of the four constructs that underpin PsyCap (Lopez & Snyder, 2009; Bandura, 1977; Seligman & Csikszentmihalyi, 2000).

H = Hope

Hope is a multifaceted cognitive task which requires the capacity to set goals, endorse a mastery belief and grow self-efficacy (Snyder, Irving, & Anderson, 1991). The authors describe hope as being comprised of two aspects which are reciprocally-derived including a sense of successful agency (goal-directed determination) and pathways (planning to meet goals). Snyder et al. (1996) later developed The State Hope Scale to measure an individual’s ability to persevere toward and use multiple pathways to achieve their goals .

Marques, Lopez & Pais-Ribeiro’s (2011) research suggests the psychological strength of hope can be cultivated and maintained over time. The authors conducted a study with 31 students from a community school, a matched comparison group of 31 students, and two secondary groups (guardians and teachers of the students’ intervention group) to investigate the effectiveness of a five week hope-based intervention. The results indicate the intervention group had enhanced hope, life satisfaction and self-worth with measurable benefits observed up to a year later.

E = Self-efficacy

Self-efficacy refers to the extent to which individuals believe they have the ability to perform a behaviour. People who are high in self-efficacy believe in their ability to master a task, while people with low self-efficacy may avoid difficult tasks. Bandura (1977) first introduced the concept self-efficacy as a part of social cognitive theory in which he argued that cognitive processes are key to explaining the mechanisms of observational learning (Chance, 2014). Luthans et al. (2007) describe self-efficacy as an aspect of self that is learned over time and argues that it can be positively changed or developed with a short intervention.

R = Resilience

Reich, Zautra and Hall (2010) describe resilience as having two aspects. First, is the notion of recovery in which resilience is seen as the ability to bounce back from stress and quickly regain equilibrium. The second dimension is the ability to sustain the recovery trajectory and grow as a result of a healthy reaction to the stressor. Ann Masten (1990) proposed a model of resilience in which adaptation to stress is a dynamic process involving internal capacities and strengths, and external resources. Masten's work provides support to the theory that resilience is a state that can be developed to increase well-being.

O = Optimism

Research into psychological capital emerged from the field of positive psychology which seeks to understand the conditions and processes that contribute to the optimal functioning of people, groups and institutions (Gable & Haidt, 2005). Seligman's (2000) research on positive psychology was pioneering in recognising how emotional states such as optimism - the tendency to make positive attributions about succeeding - can be taught and learned to increase well-being. Learned optimism can be developed using the process of cognitive reappraisal through which an individual can retrain their explanatory style which refers to how they habitually explain the causes of events (Peterson & Park, 2007).

Case study - part 2: An intervention to develop H.E.R.O

The PsyCap micro-intervention was delivered using a range of empirically tested development exercises which have been found to significantly increase PsyCap (Luthans et al., 2011). The training covered goal design, pathway generation and overcoming obstacles with the aim of teaching the participants how to design creative ways to achieve goals. To build hope, the participants were asked to identify a goal they wanted to achieve and could commit to. The goal had to be specific, measurable and challenging yet achievable in order to tap in to their potential. The next step was to break the goals down into smaller, more manageable milestones which allows people to see gradual progress and is an important step in creating agency and pathways to develop hope. The final aspect of the training was designed to build optimism which was achieved by teaching the participants how to prepare for obstacles by anticipating worst case scenarios and then putting preparations in place to overcome them.

Pre and post scores were recorded using the Psychological Capital Questionnaire 24 (PCQ-24) which measures each of the four PsyCap constructs by six items on a 24 item self-report scale (Luthans et al., 2007).

Quiz questions

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The benefits of PsyCap

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The benefits of PsyCap in the workplace

The benefits of developing PsyCap are evident in the literature with numerous studies finding support for the concept including a recent meta-analysis of the impact of positive psychological capital on employee attitudes, behaviours, and performance (Avey et al., 2011). The meta-analysis, which included 51 samples (N = 12,567, r =.26), indicated that there is a significant positive relationship between PsyCap and desirable employee attitudes, behaviour and performance. The authors also found a significant negative relationship between PsyCap and undesirable employee attitudes and behaviours such as cynicism, turnover, job stress, anxiety and deviance.

Figure 3. The benefits of developing PsyCap in the workplace

Healthy workplaces deliver greater productivity and increasing PsyCap within the workforce may give an organisation a competitive advantage (Luthans et al., 2007). Until recently, PsyCap research has predominantly focused on human resource development and performance management but the concepts can be applied more generally to improve engagement and well-being.

The benefits of PsyCap in an academic environment

Research on PsyCap is increasingly being extended to settings beyond the workplace including a number of recent studies which have focused on the benefits of PsyCap an academic environment. Datu and Valdez (2016) found a significant positive association between PsyCap and academic engagement, flourishing, interdependent happiness and positive affect in a study on 606 high school students in the Phillipines. The authors study makes an important contribution in exploring the benefits of PsyCap in a non-western context as there is limited research in this area. Riolli et al. (2012) also conducted a study on 141 organisational behaviour business students in the US to measure the effect of PsyCap on mediating stress and psychological and physical well-being. The authors found that PsyCap buffered the stress and negative outcomes related to psychological symptoms and health problems and also increased satisfaction with life. These findings support the notion that PsyCap is a valuable resource which can reduce stress and increase psychological well-being in student populations.

Case study: The benefits of PsyCap for an individual

Greg was struggling to complete his Ph.D. He felt overwhelmed by the challenge and did not think he was capable of delivering the task on time. Greg's supervisor, however, believed in him and knew he was capable of completing the project. The supervisor wanted to support Greg and help him regain his confidence so he suggested he attend a PsyCap training course to improve his self-efficacy and regain his previously optimistic attitude. Greg learnt a range of practical skills during the training which he applied once he was back in his office to reduce his stress and anxiety. He eventually completed his thesis on time which further developed his confidence in his ability to take on and succeed at challenging tasks.

Conclusion

Research and theoretical evidence suggests that PsyCap has many benefits and can be developed to improve personal growth. The psychological capital that we as individuals have acts as a protective factor with several studies finding a link between high PsyCap and a reduction in stress and anxiety. The key message is to utilise the knowledge gained through research on PsyCap to improve health and well-being and reduce stress in the population.

The benefits of PsyCap are well researched in the work environment where individuals who are high in PsyCap display increased job satisfaction, performance and productivity. In addition, having high PsyCap at work appears to have positive flow on effects for employees with research finding it improves well-being and satisfaction in other life domains. Although further research is needed, this finding provides support for using evidence-based interventions to develop PsyCap in order to create healthy work environments.

PsyCap is an emerging theory and there are unresolved problems in the literature. Research shows that hope, self-efficacy, resilience and optimism particularly influence PsyCap behaviour, however, there are a range of other constructs that may also contribute. Therefore, future research could focus on this area to further study the benefits of developing other psychological resources. In addition, research into the benefits of PsyCap in a more diverse range of settings and cultures would also be beneficial as this is a limitation in the existing literature.

References

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. Human resource development quarterly, 22, 127-152. https://doi.org/10.1002/hrdq.20070

Bandura, A. (1977). Self-efficacy: Toward a unifying theory of behavioral change. Psychological Review, "84", 191-215. https://doi.org/10.1037/0033-295X.84.2.191

Chance, P. (2014). Learning and behaviour. Belmont: Cengage Learning.

Datu, J., & Valdez, J. (n.d.). Psychological Capital Predicts Academic Engagement and Well-Being in Filipino High School Students. The Asia-Pacific Education Researcher, 25, 399–405. https://doi.org/10.1007/s40299-015-0254-1

Gable, S. L., & Haidt, J. (2005). What (and why) is positive psychology?. Review of general psychology, 9(2), 103.

Lorenz, T., Beer, C., Pütz, J., & Heinitz, K. (2016). Measuring psychological capital: construction and validation of the compound PsyCap scale (CPC-12). PloS one, 11, e0152892. https://doi.org/10.1371/journal.pone.0152892

Luthans, F. (2002a). The need for and meaning of positive organisational behaviour. Journal of Organisational Behaviour, "23", 695-706.

Luthans, F., Avey, J., Avolio, B., Norman, S., & Combs, G. (n.d.). Psychological capital development: toward a micro‐intervention. Journal of Organizational Behavior, 27, 387–393. https://doi.org/10.1002/job.373

Luthans, F., Youssef, C. M., & Avolio, B. J. (2007). Psychological capital. New York, NY: Oxford University Press.

Luthans, F., & Avolio, B. J. (2014). Brief summary of psychological capital and introduction to the special issue.

Luthans, F., Avolio, B., Luthans, F., & Avolio, B. (n.d.). Brief summary of psychological capital and introduction to the special issue. Journal of Leadership & Organizational Studies, 21, 125–129. https://doi.org/10.1177/1548051813518073

Luthans, F., & Youssef-Morgan, C. M. (2017). Psychological capital: An evidence-based positive approach. Annual Review of Organizational Psychology and Organizational Behavior, 4, 339-366.

Marques, S. C., Lopez, S. J., & Pais-Ribeiro, J. L. (2011). “Building hope for the future”: A program to foster strengths in middle-school students. Journal of Happiness Studies, 12(1), 139-152.

Masten, A. S., Best, K. M., & Garmezy, N. (1990). Resilience and development: Contributions from the study of children who overcome adversity. Development and psychopathology, 2(4), 425-444.

Peterson, C., & Park, N. (2007). Explanatory style and emotion regulation. Handbook of emotion regulation, 159-179.

Reich, J., Zautra, A., & Hall, J. (2010). Handbook of adult resilience. New York: Guilford Press.

Riolli, L., Savicki, V., & Richards, J. (2012). Psychological capital as a buffer to student stress. SciRes, 3, 1202-1207. http://dx.doi.org/10.4236/psych.2012.312A178

Seligman, M. E., & Csikszentmihalyi, M. (2000). Positive psychology: An introduction (Vol. 55, No. 1, p. 5). American Psychological Association.

Snyder, C. R., Irving, L. M., & Anderson, S. A. (1991). Hope and health: Measuring the will and the ways. In C. Snyder, & F. D.R., Handbook of social and clinical psychology: The health perspective (pp. 285-305). Elmsford, NY: Pergamon.

Snyder, C. R., Sympson, S. C., Ybasco, F. C., Borders, T. F., Babyak, M. A., & Higgins, R. L. (1996). Development and validation of the State Hope Scale. Journal Of Personality And Social Psychology, 70, 321-335. doi:10.1037/0022-3514.70.2.321

Youssef‐Morgan, C. M., & Luthans, F. (2015). Psychological capital and well‐being. Stress and Health, 31, 180-188. https://doi.org/10.1002/smi.2623

External links

Psychological capital (YouTube, 9:18 mins)
Mind Garden (A website to access psychological assessments such as Psychological Capital Questionnaire 24 (PCQ-24) and other resources)
Luthans on PsyCap (TedED, 2:03 mins)

	Based on empirically sound theory and research
	Trait like and can therefore be developed
	Measurable
	Aligned with positive psychology
	Able to explain work attitudes and performance