Psychological capital: a review of current trends.

Author:Khandelwal, Preetam
 
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Positive Psychology

The term "positive psychology" was first introduced by Abraham Maslow (1954) in his book Motivation and Personality. After more than four decades, it was revived by Martin Seligman as it became the theme of his term as president of the American Psychological Association in 1998. The positive psychology movement (Seligman & Csikszentmihalyi, 2000; Snyder & Lopez, 2002) emerged because it was felt that not enough focus was given to the strengths and the positive characteristics of people, groups and society as opposed to negative traits, destructive behavior and psychological disorders. This encouraged new research and applications well beyond the discipline of traditional psychology.

Origin & Definition

The positive psychology movement also led to a surge of interest and refocus on positive-oriented research in organizational behavior (OB) studies. This was spearheaded by Luthans (2002a, 2002b),who formally defined positive organizational behavior (POB) as "the study and application of positively oriented human resource strengths and psychological capacities that can be measured, developed, and effectively managed for performance improvement in today's workplace" (Luthans, 2002b: 59). The five broad perceived needs for initiating focused research on POB has been discussed by Youssef and Luthans (2011) which include the following:

Balanced Approach: Given that OB from the beginning was dominated by research on negativity there was a felt need to overcome this historical imbalance. This required an approach focusing equally on the impact of positivity and negativity in the workplace.

Evidence-based Positivity: OB must focus on taking a theory and research-driven approach along with valid and reliable measures as crucial selection criteria for psychological resources to be included in its domain for study and application.

Uniqueness: Organization research needed to adapt new perspectives, constructs and approaches for meeting the challenges of the emerging 21st century environment.

Developmental Approach: In organizational aspects, the focus has usually been on selecting individuals with stable traits for high productivity with the assumption that they will continue to be high performers. POB on the other hand adopts a developmental approach and seeks to build, develop and foster positivity in the workplace.

Performance Orientation: Finally, POB recognizes and addresses the need for focus on performance by highlighting psychological resources that can have a measurable impact on performance and thus ensure returns for the organization.

Is POB then merely a framing of existing OB theories in a positive note? The answer to this question is no, since POB sets conditions for inclusions which are more than just a reframing of existing OB concepts. Thus, POB, like positive psychology, does not claim to discover new significance of positivity but rather calls attention to theory development, research and application of positive traits, behavior, and states in organizations (Luthans & Youssef, 2007).It follows in the footsteps of positive psychology, which focuses on individual's positive strengths and psychological capabilities. The field of POB has since then received considerable attention from researchers who gave a renewed emphasis on the importance of a positive approach at the work place. As of now, self-efficacy, hope, optimism and resilience have met the inclusion criteria for POB research which together represent psychological capital (PsyCap), the currently most relevant, construct developed by Luthans and Youssef (2004).

Psychological Capital (PsyCap)

PsyCap has been defined as, "an individual's positive psychological state of development characterized by: (1) having confidence (efficacy) to take on and put in the necessary effort to succeed at challenging tasks; (2) making a positive attribution (optimism) about succeeding now and in the future; (3) persevering towards goals and, when necessary, redirecting paths to goals (hope) in order to succeed and (4) when beset by problems and adversity, sustaining and bouncing back and even beyond (resilience) to attain success" (Luthans, Youssef & Avolio, 2007:3).

The findings of Avey (2014) suggest that PsyCap is a multidimensional and multi-established construct (i.e., established first in multiple other domains). On the scale that ranges from pure traits at one end to pure states at the other, PsyCap is conceptually placed close to state end of a scale (Youssef & Luthans, 2011). This is because compared to pure states such as transient positive pleasures/moods or fleeting positive emotions, PsyCap shows relatively greater stability over a period of time (Luthans& Youssef, 2007).The four constructs of PsyCap are illustrated in fig.1.

Self-Efficacy: Based on the theory and research of Albert Bandura, self-efficacy is stated as self-confidence, an ability to gather the motivation, cognitive assets and action necessary to perform within a given situation(Luthans & Youssef, 2004).According to Stajkovic and Luthans (1998 :66) self-efficacy is "the employee's conviction or confidence about his or her abilities to mobilize the motivation, cognitive resources or courses of action needed to successfully execute a specific task within a given context". This positive belief, or basically confidence, is exactly in line with the POB approach (Luthans, 2002a).

Hope: Snyder et al. (1991:570) defines it as "a cognitive set that is based on a reciprocally derived sense of successful: (a) agency (goal-directed determination) and (b) pathways (planning of ways to meet goals)". Hope is similar to the other positive capacities but in depth study supports its conceptual uniqueness and discriminant validity. Specially the pathways factor of hope makes significant difference with its common usage and the remaining PsyCap capacities (Luthans, Luthans & Luthans, 2004). Thus, hope is not just the positive anticipation but also having plans to achieve the goals.

Optimism: This is defined by Seligman (1998) as a positive explanatory style that attributes positive events to internal, permanent, and pervasive causes and negative events to external, temporary, and situation-specific ones. Optimistic individuals take credit for favorable events in their lives, lifting their self-esteem and morale. It also permits them to disconnect themselves from negative life events, guarding themselves from self-blame, depression, guilt and despair.

Resilience: Drawn from developmental psychology, resilience refers to the capability of individuals and groups to bounce back from adverse or stressful situations (Luthans, 2002a). Resilience is different from the other three components of PsyCap as it is reactive rather than proactive.

Measurement of Psychological Capital

The Psychological Capital Questionnaire (PCQ) was developed (Luthans, Youssef, Avolio, 2007) as a valid and reliable measure (Luthans, Avolio, Avey, Norman, 2007). It has been tested in a diverse representative sample (Caza, Bagozzi, Woolley, Levy & Barker Caza, 2010) and is equally valid and reliable across cultures and gender. The short (12-items) version (Caza et al, 2010) may be also an equally valid and more efficient measure of PsyCap. Meta analytical work not only reported that PsyCap has relationship with performance measured in multiple ways, but little difference was found between objective measures, supervisor evaluations, or self-reports (Avey, Reichard, Luthans & Mhatre, 2011). In a review (Dawkins, Martin, Scott & Sanderson, 2013) focusing on the psychometric profile of PsyCap, it was found that the internal reliability of PsyCap has been consistent across studies. However, it has been suggested that reliance on a composite PsyCap score, without prior indepth analyses of the construct by way of confirmatory factor analysis (CFA) and structured equation modeling (SEM), could decrease the importance of studying an individual's PsyCap profile.

As PsyCap is a higher order construct, there are chances of common method variance (CMV) between sub components. The suggested solution to this is to partial out the variance of a marker variable, as well as the variance of an unmeasured latent CMV factor, using different methods to measure each sub-dimension of PsyCap and measuring each sub-dimension at a different point in time (Newman, Ucbasaran, Zhu & Hirst, 2014). As data on PsyCap at individual level has been collected from single source at a single point in time and is self-reported it might result in social desirability response bias and CMV. These problems can be solved by considering alternative measures of PsyCap (Newman et al.,2014) such as asking partners, supervisors and other acquaintances to rate the PsyCap of employees (Demerouti, Van Eeuwijk, Snelder, Wild 2011).

PsyCap is now also studied as a team-level and organizational level construct. Walumbwa, Luthans, Avey& Oke (2011) developed a measure of 'collective' PsyCap and McKenny, PirolaMerlo, Sarros& Islam (2013) proposed a measure of organizational-level PsyCap using computer-aided text analysis.

Positive Outcomes

Research has consistently demonstrated that PsyCap is positively related to a variety of job...

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