Corporate Heros: Psychological capital and performance improvement
Just as organizations benefit from a healthy stash of financial capital, human performance is enhanced by reserves of psychological capital (PsyCap) that supply the strength and capability to carry on, even in tough times. A spin-off the positive psychology movement (see Positive Psychology: Shifting from what’s wrong to what’s right), PsyCap is defined as an individual’s strength, perceptions, attitudes toward work, and general outlook on life (Luthans, Youssef, et al., 2007) and consists of four capacities (HERO): hope, efficacy, resilience, and optimism, as outlined below:
Hope. Individuals with hope can set goals, self-motivated to achieve goals and to change course as needed to determine alternate strategies for goal achievement (Snyder, 2000). In an organizational setting, those higher in hope can use planning to predict obstacles and identify different ways to achieve their targeted goals. They can set goals, predict potential obstacles, and adjust their strategy as needed to continue toward goal achievement.
Efficacy. Based on Bandura’s social cognitive theory, efficacy refers to a worker’s confidence in his or her ability to get things done using motivation, cognitive resources, or specific courses of action. Those high in efficacy are confident and persistent, and when faced with challenges, willing to put forth the effort to achieve their goals (Luthans et al., 2007).
Resilience. When faced with adversity, resilient individuals can bounce back quickly and effectively (Masten, 2001). In organizational settings, resilient individuals recover from change, regardless of whether it is positive or negative in nature. They bounce back when faced with negative outcomes like adversity, uncertainty, conflict, or failure, and even positive ones like a promotion or increased responsibility. Masten identified three ways to promote resilience: 1) reduce risk exposure by identifying factors that create adversity that can be eliminated or changed, 2) increase resources to counterbalance risk, and 3) mobilize and facilitate powerful protective systems. Resiliency increases with practice, and individuals become more resilient each time they successfully recover from a setback, creating a positive cycle of improvement.
Optimism. Optimism refers to the positive belief that a desirable outcome will result from increased effort. Optimists continue to put forth effort even when faced with growing adversity, leading them to perform better than pessimists. Optimism is the foundation of Seligman’s approach to positive psychology, and he supports the development of an optimistic orientation as a requirement for a meaningful life (Seligman, 2002).
Psychological Capital and Performance
Extensive research has proven the value of PsyCap in workplace performance. Research has shown that individuals high in PsyCap are also high performers, committed to the mission of their organization, and have a sense of empowerment. Given that PsyCap contributes to so many beneficial outcomes, how do we raise psychological capital when reserves are low? Two strategies that show promise are training and performance coaching. Because PsyCap is “state-like” it is open to development. Luthans, Avey & Patera (2008) increased PsyCap with a two-hour web-based training program. Coaching also shows promise as a way to increase PsyCap and its components (Iverson, 2016).
Measuring Psychological Capital
An added benefit of basing your HPI practice on PsyCap intervention is the availability of valid and reliable instruments to measure the construct. PsyCap is measured with the PsyCap Questionnaire (PCQ), developed and validated by Luthans, et al. (2007). The 24-item PCQ and a 12-item reduced version are available at Mind Garden.
You may view the 24 questions of the PCQ in this handout. Scroll to Page 3 to see the questions.
Questions for Discussion
- What are your thoughts about the accuracy of Psychological Capital and PCQ for you and your organization?
- How might you use this tool to increase performance?
Iverson, K.M. (2016). Measuring the Magic: The Thrive Model of Evidence-based Executive Coaching. O D Practitioner, 48 (4) 20-26.
Luthans F., Youssef, C. M., & Avolio, B. J. (2007). Psychological capital. New York, NY: Oxford University Press.
Masten, A. S. (2001). Ordinary magic: Resilience processes in development. American Psychologist, 56(3), 227.
Seligman, M. E. (2002). Positive psychology, positive prevention, and positive therapy. In C. R. Snyder & S.J. Lopez (Eds.), The handbook of positive psychology (pp. 3–12). New York, NY: Oxford Press.