Positive Psychological Capital in the WorkplaceWhere We Are and Where We Need to Go - Oxford Scholarship Jump to ContentJump to Main Navigation
Designing Positive PsychologyTaking Stock and Moving Forward$

Kennon M. Sheldon, Todd B. Kashdan, and Michael F. Steger

Print publication date: 2011

Print ISBN-13: 9780195373585

Published to Oxford Scholarship Online: May 2011

DOI: 10.1093/acprof:oso/9780195373585.001.0001

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Positive Psychological Capital in the Workplace

Positive Psychological Capital in the Workplace

Where We Are and Where We Need to Go

(p.351) 23 Positive Psychological Capital in the Workplace
Designing Positive Psychology

Carolyn M. Youssef (Contributor Webpage)

Fred Luthans (Contributor Webpage)

Oxford University Press

Abstract and Keywords

This chapter begins with an assessment of where we are with the theory, research, and application of positivity in the workplace in general and positive organizational behavior (POB)/ psychological capital (PsyCap) in particular. Special attention is initially given to the traditional role of positivity in organizational research. It then presents an overview of a parallel development to POB/PsyCap—positive organizational scholarship (POS). The chapter discusses the similarities and differences between POB/PsyCap and POS, and then briefly critiques the positively oriented self-help fads found in the popular literature. It makes an in-depth examination and assessment of where we are on all aspects of positive PsyCap. The remainder of the chapter uses this platform to launch into where PsyCap needs to go, needed future theory building, research, and practice.

Keywords:   positive psychology, positive organizational behavior, psychological capital, positive organizational scholarship, positivity, organizational research

In order to restore more balance to the prevailing negativity, the positive psychology movement has emphasized positive character strengths, emotions, values, virtues, and cognitions at both self and interpersonal levels (e.g., see Lopez & Snyder, 2009; Peterson & Seligman, 2004; Snyder & Lopez, 2002). Although the initial research recognized the benefits of positivity on work performance outcomes, the vast majority of studies were concerned with relationships and health (e.g., see the meta-analysis by Lyubomirsky, King & Diener, 2005). Even though the field of management and organizational behavior over the years has given relatively more attention to the value of a positive perspective and constructs (see Luthans & Avolio, 2009 and Luthans & Youssef, 2009, which trace this history), the advent of positive psychology has also stimulated a refocus and testing of the applicability of new positive constructs in the development and effective management of human resources in today’s workplaces.

Luthans (2002a, 2002b) introduced this positive organizational behavior, or simply 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” (2002b, p. 59). POB is thus clearly distinguished not only from the positively oriented, faddish self-help literature in the popular business press but also from most of the other traditionally recognized positive constructs and approaches in the academic field of organizational behavior. This differentiation is attained through the definitional inclusion criteria that require a psychological capacity or resource to be theoretically grounded, measurable, state-like, open to development and management, and have performance impact (Luthans, 2002a, 2002b). To date, the psychological resources of efficacy, hope, resilience, and optimism have been identified to best meet these inclusion criteria and, when combined, have been termed psychological capital or simply PsyCap (Luthans, Luthans & Luthans, 2004; Luthans & Youssef, 2004; Luthans, Youssef & Avolio, 2007). This PsyCap is defined as “an individual’s positive psychological state of development that is characterized by: (1) having confidence (self-efficacy) to take on and put in the necessary effort to succeed at challenging tasks; (2) making a positive (p.352) attribution (optimism) about succeeding now and in the future; (3) persevering toward 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, p. 3).

The purpose of this chapter is to first assess where we are (“Taking Stock”) with the theory, research, and application of positivity in the workplace in general and POB/PsyCap in particular. Special attention is initially given to the traditional role of positivity in organizational research. Next, an overview of a parallel development to POB/PsyCap as covered in this chapter that is called positive organizational scholarship, or simply POS, is given attention. The similarities and differences between POB/PsyCap and POS are discussed. This is followed by a brief critique of the positively oriented self-help fads found in the popular literature. Then an in-depth examination and assessment of where we are on all aspects of positive psychological capital (PsyCap) is made. The balance of the chapter uses this platform of where we are to launch into where PsyCap needs to go, needed future theory building, research, and practice.

Taking Stock

As indicated, the importance of positivity in general and in the workplace in particular has deep historical roots. For example, the contents of Abraham Maslow’s seminal works (e.g., his 1954 classic on Motivation and Personality had a chapter titled “Toward a Positive Psychology”) and his final unpublished papers (see Hoffman, 1996) clearly indicate close similarities to the contents of this volume and other recent positive psychology references. From a psychology of health, happiness, and well being, to peak experiences and transcendence, and passing through creativity, gratitude, justice, and even realistic optimism, this historical legacy by no means reflects a “negative” psychology, but indeed attests to the fact that positive psychology is in fact at least decades, if not centuries, old. Similarly, from the recognized very beginning of the field of organizational behavior, the Hawthorne studies revealed that positive group dynamics, supervisory style, worker participation, and increased care and attention (i.e., the “Hawthorne effect”) can influence workers’ productivity and attitudes. These initiatives at Hawthorne clearly went beyond simply fixing what was wrong with employees and with the work environment in terms of improving physical working conditions such as light intensity or implementing rest pauses. The same can be said for Douglas McGregor’s (1960) pioneering Theory Y, a very positive alternative to the negatively oriented Theory X assumptions and approach to managing human resources.

In other words, it is not that positive psychology or the field of POB discovered the importance of positivity, but rather is simply calling for a refocus on positivity that cannot take place by solely extrapolating what is known based on a deficiency model. Positive and negative constructs are not simply polar opposites, neither in psychology (e.g., optimism vs. pessimism, Chang, D’Zurilla, & Maydeu-Olivares, 1994) nor in organizational behavior (e.g., job satisfaction vs. job dissatisfaction, Herzberg, Mausner, & Snyderman, 1959; organizational citizenship behaviors vs. counterproductive work behaviors, Sackett, Berry, Wiemann, & Laczo, 2006). We refer to this positive refocus as “old wine, old bottles… but perhaps a new restaurant” (Luthans & Avolio, 2009). This metaphor of a “new restaurant” is used to indicate that, although positivity has a long historical legacy in the organization sciences (“old wine, old bottles”), we would argue for a refocus with resulting new theory building, research, and application. This is opposed to the many management fads that tend to be surrounded with unsubstantiated claims of being “new wine,” or the common criticism of positivity movements in general as “old wine in new bottles.” With this “new restaurant” perspective (i.e., new context, under-recognized positive constructs) serving as a point of departure, we now take stock and assess some of the established as well as the recently emerging positively oriented constructs in the study of organizational behavior and human resource management.

The Role of Positivity in Traditional Organizational Behavior Research and Practice

Before the emergence of POB, over the years there were many established streams of research based on positive constructs (see Wright & Quick, 2009 for a comprehensive history of positive organizational research). These can be classified into positive traits, states, attitudes, and behaviors. Positive traits used in organizational behavior research included stable characteristics (p.353) that do not significantly vary over time or across situations such as intelligence or general mental abilities (e.g., Schmidt & Hunter, 2000), positive affectivity (e.g., George, 1991), the Big Five personality traits (Conscientiousness, Agreeableness, Extraversion, Emotional Stability, and Openness to Experience; e.g., Barrick & Mount, 1991), and core self-evaluations (self-esteem, generalized efficacy, locus of control, and emotional stability; e.g., Judge & Bono, 2001). Positive states are highly transient and situational, such as positive moods (e.g., George, 1991) or experiences of flow (Csíkszentmihályi, 2003), which contribute to the better understanding of organizational behavior. Positive work attitudes such as job satisfaction (e.g., see Wright, 2005) and organizational commitment (Allen & Meyer, 1990) incorporate the cognitions, emotions, and evaluations that can drive behavioral intentions and actual behaviors in the workplace. Positive behaviors are actions that are conducive to higher work productivity in general but also include organizational citizenship behaviors that represent those who go above and beyond the call of duty (Organ, 1988), as well as moral behavioral choices based on effective moral evaluations in ethically challenging situations (Jones, 1991). Behavioral management through positive reinforcement has also been established in organizational behavior research (Stajkovic & Luthans, 2003). This sampling is merely indicative of the widespread use of positive constructs in organizational behavior research over the years.

Stimulated by positive psychology and the perceived need to refocus on the positive in organizational studies, as indicated two parallel initiatives emerged—positive organizational scholarship (POS, Cameron, Dutton & Quinn, 2003) and positive organizational behavior (POB, Luthans, 2002a, 2002b). POS is defined as “the study of that which is positive, flourishing, and life-giving in organizations. Positive refers to the elevating processes and outcomes in organizations. Organizational refers to the interpersonal and structural dynamics activated in and through organizations, specifically taking into account the context in which positive phenomena occur. Scholarship refers to the scientific, theoretically derived, and rigorous investigation of that which is positive in organizational settings” (Cameron & Caza, 2004, p. 731). POB was defined in the introductory discussion and, despite the apparent similarities between POS and POB (e.g., positivity, scientific rigor, and organizational context), there are several differences at least in emphasis if not substance. First, POS primarily emphasizes group and organizational-level variables and processes, while POB tends to focus more on individual-level psychological resources, a perspective that it shares with positive psychology. Again, this distinction on the unit of analysis does not preclude either approach from moving between levels (e.g., see the recent studies by Peterson & Zhang, in press; Walumbwa, Luthans, Avey & Oke, in press, on collective psychological capital and many individual level studies in POS). Second, although POS and POB share several positive constructs, POB emphasizes in its inclusion criteria the measurability and performance impact (broadly defined) of its constituent psychological resources, while POS utilizes a wider variety of organizational phenomena as indicators of positivity and its outcomes, lending itself to a more qualitative or mixed-methods study approach and making it more of an umbrella term for an emerging domain of study and application.

In addition to the expanding positive organizational research in the academic domain, there is accelerating growth in the popular positive self-help literature. Again, positivity is not new here either, with classics such as Norman Vincent Peale’s Power of Positive Thinking or Dale Carnegie’s How to Win Friends and Influence People. Representative of the more recent blockbuster, best-selling self-help books are Steven Covey’s Seven Habits of Highly Effective People and Spencer Johnson’s Who Moved My Cheese? These positive messages have found their way to practicing managers’ minds, hearts, and bookshelves. They present intuitively appealing positive answers and practical guidelines to people-oriented challenges in the workplace. Management consultants have also utilized many of these approaches in employee selection, corporate training, and leadership and organizational development programs. Generally lacking evidence from theory and scientifically based research, these popular approaches too often lack sustainability and arguably take on the properties of a fad or “silver bullet” mentality.

On the other hand, the popular self-help literature does share some common characteristics with the academic literature in positive psychology, POS, POB, and PsyCap. Both tend to emphasize the internalization or mindset of positivity through self-awareness, self-evaluation, and self-development. At least implicitly, both tend to have an underlying cognitive-affective-social model advocating the importance of a holistic approach to understanding human behavior. (p.354) Most importantly, both are not only aimed at self-help, but they also share the goals and aspirations of increasing overall well-being and performance.

Despite these commonalities, on balance we would argue that the popular self-help literature suffers from a lack of scientific-based evidence. From reliance on anecdotal evidence, to flawed research design, to use of non-validated measures, to simplistic interpretation of survey data from convenience samples, to non-substantiated generalizations to populations that are significantly different from those studied, many management fads promoted by the popular literature at best lack sustainable impact and at worst have led practicing managers astray. However, a notable exception to this criticism of the practice literature is the Gallup Organization’s strengths-based management and employee engagement integrated stream of research, publication, and consulting practice (e.g., Wagner & Harter, 2006). The Gallup research has found its way to the academic positivity literature due to scientific rigor (e.g., see Harter, Schmidt & Hayes, 2002). This literature advocates that stable, hard-wired talents should be emphasized in selection and placement to enhance the fit between employees and their jobs. It promotes key factors such as clear expectations, recognition, social support, participation, learning and growth opportunities, and others. These factors, when practiced within a strengths framework where employees are positioned to work, learn, and grow along their areas of strength, can increase employee engagement, leading to increased productivity and well-being (Harter, Schmidt & Hayes, 2002).

Positive Organizational Behavior (POB) and Psychological Capital (PsyCap)

Besides recognizing the established and alternative positive approaches in the academic and practitioner literatures, the main intent of this chapter is to take stock of POB and PsyCap. As we indicated, POB focuses on theory-based positive constructs that can be validly measured, that are open to development and management in the workplace, and that have a measurable performance impact (Luthans, 2002a, 2002b). PsyCap combines the four criteria-meeting positive psychological resources of efficacy, hope, optimism, and resilience into a multidimensional core construct supported by theory (Luthans, Youssef & Avolio, 2007) and research (Luthans, Avolio, Avey & Norman, 2007). A 24-item PsyCap questionnaire (PCQ) has also been adapted from published measures and developed (see Luthans, Youssef & Avolio, 2007, pp. 237–238 for the full PCQ and go to www.mindgarden.com for free permission to use for research purposes) and validated (Luthans, Avolio et al., 2007).

First, the positive constructs selected for inclusion in PsyCap are deeply rooted in several well-established theoretical traditions (Luthans, Youssef & Avolio, 2007). For example, PsyCap efficacy draws from Bandura’s (1997) social cognitive theory and refers to “one’s conviction (or confidence) about his or her abilities to mobilize the motivation, cognitive resources, and courses of action needed to successfully execute a specific task within a given context” (Stajkovic & Luthans, 1998, p.66). Following Bandura’s (1997) emphasis on social cognitive capacities of symbolizing, forethought, observation, self-regulation, and self-reflection, efficacy or confidence can be built in a specific domain through mastery experiences, modelling and vicarious learning, social persuasion, and physiological and psychological arousal. Interestingly, while research supports that personal success, followed by vicarious (and modelling) success of relevant others, is most effective in building self-efficacy, more feel-good approaches that tend to rely on social persuasion (e.g., encouraging managers to support their employees with a “you can do it” attitude and language), physical arousal (e.g., eating right and exercising to increase physical fitness), and psychological arousal (e.g., listening to motivational speakers) are much more popular in practice.

PsyCap hope builds on the foundations of Snyder’s (2000) hope theory and is defined as “a positive motivational state that is based on an interactively derived sense of successful (1) agency (goal-directed energy) and (2) pathways (planning to meet goals)” (Snyder, Irving, & Anderson, 1991, p. 287). While the agency component, also referred to as willpower, may have some conceptual and practical similarities to self-efficacy, hope’s pathways or “waypower” component, which refers to the ability to generate alternative ways to achieve goals when faced with obstacles, is unique to hope. This goal-oriented and alternative pathways view is also unique to the research-based definitions of hope and stands in clear contrast to the everyday use of the word “hope” to indicate uncertainty (e.g., I hope I can do this) or unsubstantiated positivity (e.g., stay hopeful), which is finding its way to the practicing manager’s language as well.

(p.355) PsyCap optimism primarily draws from the positive psychology movement but is also rooted in established attribution and expectancy work motivation theories. It integrates positive general expectancies about the future (Carver & Scheier, 2002) with a positive explanatory style of past and current situations. Optimists attribute positive situations to internal, permanent, and pervasive causes and negative situations to external, temporary, and situational ones (Seligman, 1998). Optimism certainly shares some characteristics with efficacy and hope, e.g., positivity and psychological ownership or internalization (especially in relation to success). However, optimism is also distinguished by its generality, both in terms of scope, because it includes overarching positive future expectations (as opposed to efficacy being context specific, or hope being directed toward specific goals), and in terms of agency, since it utilizes both internal and external attributions. The external attributions are especially critical in negative situations in order for the individual to maintain positivity in times of failure. It is this latter aspect of externalizing negative events that has caused optimism to be particularly challenging in its applications to the workplace, due to its contradiction with notions of responsibility and accountability. This is why the qualifiers of “realistic” and “flexibility” are associated with PsyCap optimism (Luthans, Youssef et al., 2007).

PsyCap resilience draws from a long tradition in developmental and clinical psychology (Masten, 2001) and is defined as “the capacity to rebound or bounce back from adversity, conflict, failure, or even positive events, progress, and increased responsibility” (Luthans, 2002a, p. 702). Resilience is particularly distinguished from efficacy, hope, and optimism by being primarily reactionary in nature, but several aspects are also shared. For example, perseverance in resiliency is shared with efficacy, the emphasis on adaptive processes is shared with hope, and the balance between internal and external resources is shared with optimism. Although PsyCap resilience has been recognized as important, both in times of adversity and in positive events, the increased frequency and magnitude of economic setbacks suffered by organizations in recent times, and the resulting impact on personal and professional lives, have made resiliency surface as a very critical positive psychological resource.

The convergent and discriminant validity of the four constructs that constitute PsyCap support it as a multidimensional core construct (see Luthans, Avolio et al., 2007), and by the same token the convergence and divergence between PsyCap and other related positive constructs also support its overall construct validity (see Avey, Luthans & Youssef, 2010, for a comprehensive review and research support for the value-added contribution of PsyCap over other positive constructs). Three critical attributes of PsyCap distinguish it from other positive constructs and approaches. The first is that PsyCap’s level of analysis to date has been primarily the individual. Although PsyCap and its related models (e.g., authentic leadership, Avolio & Luthans, 2006) take into consideration organizational factors, such as those studied in POS (Cameron et al., 2003), these macro-level factors are primarily viewed as contextual variables that can facilitate, accelerate, or hinder PsyCap development. Also, recent research has demonstrated that PsyCap may play a mediating role in the supportive organizational climate-employee performance relationship (Luthans, Norman et al., 2008) and between authentic leadership and work groups’ performance and citizenship behavior (Walumbwa et al., in press). This latter study also indicated the positive impact that collective PsyCap has on group-level performance.

A second major differentiation is PsyCap’s state-like or developmental potential, which places it toward the state end of the much-debated trait-state continuum. On the trait end of the continuum, many of the “pure” traits discussed earlier or emphasized by much of the positive psychology literature may be genetically determined, “hard-wired,” or can be developed only through lifelong development or exceptional trigger (or jolting) experiences. On the other hand, PsyCap has been shown to readily lend itself to development and management through relatively short training interventions (Luthans, Avey, Avolio, Norman, & Combs, 2006; Luthans, Avey, Avolio, & Peterson, 2010; Luthans, Avey, & Patera, 2008). On the state end of the continuum, “pure” states (e.g., pleasures, moods or emotions), which continuously fluctuate over time and across situations, can be found. On the other hand, unlike these pure states, PsyCap has some evidence of relative stability (e.g., see Luthans, Avolio et al., 2007). Effective human resources management training needs to have a reasonable time span impact (about six months, according to Wright, 2007) in order to capitalize on PsyCap’s development and management, hence the term “state-like.” This positioning of PsyCap as “state-like” is also in line with recent findings (p.356) that, although an individual’s positivity may have a nature- and nurture-determined baseline or “set point,” and aside from the relatively small portion of positivity that is highly transient and circumstantial (e.g., income or location), there is significant room for managing one’s positivity through intentional everyday cognitive, affective, social, and spiritual activities that can alter attention, interpretation, and retention processes (Diener & Biswas-Diener, 2008; Lyubomirsky, 2007).

Third, and perhaps most critical to organizational behavior as an applied field, is PsyCap’s performance impact criterion. Positivity in general has been shown to improve performance in most life domains, including work (e.g., see Biswas-Diener & Dean, 2007; Diener & Biswas-Diener, 2008; Lyubomirsky, King, & Diener, 2005 for reviews). Most of the research to date on PsyCap has been devoted to testing the relationship with employees’ work-related outcomes. Even after controlling for various individual differences such as demographics, personality traits, core self-evaluations, person-organization fit, and person-job fit, PsyCap has been shown to positively relate to a wide range of desirable outcomes such as in-role performance, job satisfaction, work happiness, organizational commitment, organizational citizenship behaviors, psychological well-being over time, job search behaviors, and negatively to undesirable stress, counterproductive work behaviors, cynicism, absenteeism, and turnover (Avey, Luthans & Jensen, 2009; Avey, Luthans, Smith & Palmer, 2010; Avey, Luthans & Youssef, 2010; Avey, Wernsing & Luthans, 2008; Larson & Luthans, 2006; Luthans, Avey, Clapp-Smith & Li, 2008; Luthans, Avolio et al., 2007; Luthans, Avolio, Walumbwa, & Li, 2005; Luthans, Norman et al., 2008) and at the group level citizenship behaviors and performance (Walumbwa et al., in press) and business unit performance (Peterson & Zhang in press).

Not only has this growing body of research established the relationship between PsyCap and employee performance and desirable attitudes and behaviors, but preliminary utility analysis has also indicated robust (over 200%) return on investment in PsyCap development, or what we refer to as “Return on Development” (ROD; see Luthans, Avey et al., 2006 and Luthans, Youssef & Avolio, 2007, for quantitative utility analysis based on realistic corporate data). Furthermore, the return on PsyCap development is not limited to immediate in-role performance but has also been shown to impact a wide range of work-related outcomes, with established relationships to various long-term indicators of individual and organizational effectiveness and change (Avey, Wernsing et al., 2008; Avey, Luthans & Youssef, 2010). This broader, more holistic perspective of outcomes conceptualized for PsyCap (Youssef & Luthans, 2009) is in line with the essence of the positive psychology movement’s emphasis on the whole person, positive organizational scholarship’s emphasis on the contextualization and wider impact of positivity, and the increased emphasis on long-term effectiveness in management practice. For example, we have recently proposed that PsyCap can contribute to organizational virtuousness and can help virtuous business organizations in maintaining their success through crises, as well as during ordinary and even exemplary times (Youssef & Luthans, 2008).

When PsyCap Is Not the Answer

Positivity in general, and positive organizational research in particular, has not been without its critics (e.g., see Fineman, 2006; George, 2004; Hackman, 2009; Lazarus, 2003). From underlying assumptions of human benevolence, to cross-cultural differences in valuing positivity and what is considered positive, organizational behavior research and practice may find some of the tenets of positivity at least questionable, if not disproved. Indeed, extreme positivity has been shown to have disadvantages (Diener & Biswas-Diener, 2008). Illusions and self-deceit can result from overconfidence, false hope, or unrealistic optimism, leading to wasted resources, faulty strategies, threats to the survival of the organization, and even to the physical or financial safety and well-being of its employees (see Luthans & Avolio, 2009; Luthans, Youssef, & Avolio, 2007, which have a potential “pitfalls” section at the end of each chapter).

On the other hand, the value of a balanced perspective of workplace positivity is clearly evident. Similar to the field of psychology, a deficit approach (e.g., emphasis on employee incompetence, disengagement, stress, and other forms of negative deviance) is far too common but can be argued as justifiable to the problem-oriented decision-making and resource allocation processes in traditional management practice. In other words, it is not that negativity per se is necessarily wrong or hurtful to performance. Instead, it is the emphasis and the ratio of negativity to positivity that needs to be revisited. For example, positive psychologist Barbara Fredrickson’s (p.357) “tipping point” ratio of three positives to one negative for effective performance needs to be recognized in the management field (Fredrickson & Losada, 2005). She uses the analogy of a sailing ship where the mast must be at least three times the length/depth of the keel (i.e., 3 : 1) to perform well. However, without the keel the ship would flounder and fall flat. “Without negativity you become Pollyanna. You lose touch with reality. You’re not genuine” (Fredrickson, 2009, p.136).

Positivity alone is certainly not the answer and is not going to solve all individual, group, or organizational problems. Moreover, PsyCap per se cannot be expected to make employees happier and more productive when developed in isolation of its context. This context incorporates organizational-level variables such as the structure, strategy, and culture; employee-level factors such as personality traits and individual states; social interactions and relationships among managers and employees and their implications on effective leadership and social support; and the organization-employee interface that impacts perceptions of fit, work-life balance, and other critical determinants of personal fulfillment (and effectiveness) at work. Integration with the established organizational behavior literature on various constructs and approaches that may appear at least on the surface to be “negatively oriented” (e.g., unethical behavior, risk aversion, bureaucracy, stress, and negative attitudes) is also indispensible for a better understanding and effective management of positivity in the workplace (Avey et al., 2010; Youssef & Luthans, 2009).

Moving Forward

One clear direction for POB and PsyCap in moving ahead on their journey (not destination) is to heed the critics’ warnings about becoming exclusive, elitist endeavors. They cannot afford to be just fads and instead must be founded on and/or build upon the decades of existing research. They cannot become elusive exercises in chasing ill-defined emotions with only the feel-good appearance of positivity. Indeed, it is easy for positivity research to fall into these pitfalls, especially given today’s post-modern emphasis on hedonism. However, in line with our inquiry (rather than advocacy) position that we have taken with POB (see Luthans & Avolio, 2009), these warnings and criticisms have promoted further theory building and the development and testing of integrated conceptual frameworks in the POB/PsyCap literature (e.g., see Avey et al., 2010; Youssef & Luthans, 2009).

Future Directions for PsyCap Research

Although, as indicated above, a PsyCap measure has been determined and validated, has been clearly demonstrated to be related to important outcomes, and development interventions have been successfully implemented, as with any relatively new domain of study, these research results should be viewed as only the first steps. There remains the need for better understanding of the work-life interface that may hinder or facilitate, accelerate, or otherwise help shape an individual’s level of positivity, both in terms of and beyond PsyCap. Individual employees’ PsyCap levels are also likely to represent the building blocks of PsyCap in groups, organizations, and communities. In other words, future research needs to explore alternative approaches to measuring and developing PsyCap in various contexts and at multiple levels of analysis.

With respect to measurement, in most academic disciplines researchers tend to build expertise in one or a very few research methods. These methods tend to then become strongly associated with the areas of research interest of those researchers. So far, PsyCap research has been almost exclusively cross-sectional designs and quantitative analysis. However, with positivity being a complex integration of cognitive, affective, and social evaluations, many of which are subjective in nature (e.g., subjective well-being, see Biswas-Diener & Dean, 2007; Diener & Biswas-Diener, 2008; Lyubomirsky, 2007; Wright, 2005, 2007), it becomes critical to account for that complexity through qualitative methods or through methods that integrate both quantitative and qualitative approaches (i.e., mixed methods). While harder to “sell” in management research and practice, where the emphasis is on quantifying return on investment, qualitative methods may facilitate a richer understanding of the antecedents, processes, and consequences of positivity in general and workplace PsyCap in particular. Qualitative, alternative methodologies may help in the further development of more viable theoretical understanding of positivity and workplace PsyCap.

To date, PsyCap development has been empirically demonstrated in short workshop training interventions (Luthans, Avey et al.,2010) and (p.358) even when delivered online (Luthans, Avey & Patera, 2008). Preliminary experimental research has also demonstrated that such PsyCap training has a casual impact on improving participants’ performance (Luthans, Avey et al., 2010). The familiarity of corporate trainers and trainees with this type of “micro-intervention” has facilitated the initial acceptance and testing of developing PsyCap in employees and leaders. On the other hand, the salience of the context within which positivity in general and PsyCap in particular develops over time—including leadership effectiveness, supervisor and coworker support, employee job responsibilities and challenges, and the interface between work and other life domains—seems to indicate much untapped potential that can be realized from a broader range of PsyCap development approaches (see Avolio & Luthans, 2006). For example, given the effectiveness of one-on-one approaches in developing PsyCap’s constituent resources (e.g., vicarious learning or modelling in developing self-efficacy), the coaching approach that has been developed and implemented in developing happiness (Biswas-Diener & Dean, 2007) may also lend itself to PsyCap development. Moreover, positivity in general, and PsyCap in particular, should be taken into consideration and fully integrated in various human resource management programs such as job design, compensation, performance appraisal, succession planning, and team building.

In addition to future training and development opportunities, a critical aspect that is yet to be explored in positive organizational behavior research are the possible discontinuities. Although empirical findings to date are consistent in supporting desirable relationships between PsyCap and an increasing number of employee outcomes, various biases (e.g., systematic self-selection into or out of training interventions by participants who are higher or lower on PsyCap) may disguise the realities of those relationships. For example, occasional negative relationships, especially at high levels of PsyCap, may indicate curvilinear relationships in which extreme PsyCap may be “too much of a good thing,” a possibility that has been found in the positivity (see Fredrickson, 2009) and in particular the happiness (see Diener & Biswas-Diener, 2008) literature. Moreover, even though some studies may yield no statistically significant findings, especially at restricted ranges of PsyCap, such findings may indicate the existence of thresholds, saturation points, tipping points, trigger events, or other discontinuities that the sampling approach utilized may have missed. These discontinuities are worth studying in and of themselves for a better understanding of the role of positivity in general and the contribution of PsyCap in the workplace in particular.

Levels of analysis need to also be carefully considered, especially since PsyCap is now being studied at the group (e.g., collective PsyCap, Walumbwa et al., in press; Peterson & Zhang, in press) and organizational (e.g., virtuous organizations, Youssef & Luthans, 2008) levels. Although now underway, considerable cross-level collaboration potential is still untapped for researchers in positive psychology, positive organizational behavior, and positive organizational scholarship (e.g., see Wright & Goodstein, 2007). This research should take into account not only the co-presence of various levels of analysis but also the interaction across those levels.

Because of the state-like nature of PsyCap and the need for more evidence of a causal link between PsyCap and outcomes, a call has recently been made for longitudinal PsyCap research (Avey, Luthans, & Mhatre, 2008), and initial longitudinal research has found a relationship between employees’ PsyCap and their objective performance at multiple points in time (Peterson, Luthans, Avolio, Walumbwa, & Zhang, 2010). Such longitudinal research can facilitate the better understanding of the various discontinuities outlined earlier, as well as clarifying the trait-state distinction (e.g., the initial longitudinal study found within-person PsyCap variability over time, Peterson et al., 2010). This apparent malleability of PsyCap over time would in turn increase the effectiveness of human resource management initiatives by shedding more light on the most appropriate courses of action, e.g., the recruitment and selection of those with certain stable traits versus development of state-like PsyCap. This research on developable PsyCap could also lead to anticipation and even proactive design of trigger events that can foster and accelerate PsyCap. Over time PsyCap could be integrated within the larger framework of organizational strategy, structure, and culture. As for establishing a causal relationship between PsyCap and outcomes, the longitudinal studies can contribute, but of course true experimental designs are still needed. Like with the group- and organizational-level analyses of PsyCap, although research has started, more PsyCap longitudinal and experimental designed research is needed for the future.

(p.359) Finally, PsyCap has never been intended to be exclusive to the four psychological resources of efficacy, hope, optimism, and resilience. Other positive psychological capacities have also been investigated for their fit with the inclusion criteria, and some have been shown to be promising for future research (see Chapters 6 and 7 in Luthans, Youssef & Avolio, 2007). It is critical for PsyCap, and the positivity domain in general, especially at their current stages, to maintain openness and inclusiveness in order for these approaches to further develop toward their full potential. In light of the current economic turmoil and seeming ethical meltdown in the business environment, there is an unprecedented need for openness to new ideas and approaches that can enhance corporate effectiveness in general and that can specifically accomplish this goal through increased emphasis on the importance of human resources and their performance, attitudes, and behaviors (e.g., see Cascio & Cappelli, 2009). Expanding PsyCap research to include relevant positive constructs such as creativity, courage, wisdom, flow, spirituality, authenticity, gratitude, forgiveness, and others, as well as the relationships, interactions, and discontinuities within and between these and other constructs, will likely enhance our understanding of positivity in the workplace and help meet the daunting challenges that lie ahead.

Future Directions for the Application of Positivity and Psycap

Since positivity and PsyCap are relatively new to actual organizational practice, they may be approached by managers and decision makers with caution, faced with doubts, or most commonly just paid lip service to give an impression of openness to new ideas and a caring, humanistic attitude toward the people-side of the organization. Yet, especially in these turbulent times, it seems critical for managers to genuinely recognize the untapped potential of positivity in the workplace and to design ways of integrating positivity into the structures, strategies, and cultures of their organizations by investing in the PsyCap of their people. Recruitment, selection and placement, job design, reward systems, and training and development are all possible vehicles for the promotion of positivity and PsyCap in the workplace. The same is true for organizational-level processes such as organizational development and change, communication systems, and decision-making processes. Failing to recognize the importance of this “big picture” may result in losing the most positive employees to the competition or to entrepreneurial opportunities, leaving an organization with a rigid status quo and a cynical workforce that is resistant to change. In other words, as a recent study indicated, positive employees may lead to positive organizational change (Avey, Wernsing et al., 2008).

On the other hand, similar to the points raised earlier, it is also important for practicing managers to realize the contextual nature of positivity in actual practice. Some practical examples may help illustrate the opportunities and challenges in applying positivity and PsyCap. For instance, the positive impact of optimism on insurance sales employees has been recognized in the positive psychology literature (Seligman, 1998). On the other hand, consider the negative impact of a highly optimistic explanatory style in jobs that require high levels of financial prudence (e.g., auditors) or physically hazardous jobs where strict adherence to safety regulations is paramount. Only mild levels of optimism are desirable in such jobs, and managers may have to find ways to discourage extreme levels of optimism without appearing to be uncaring or callous.

Similarly, high levels of hope pathways may be conducive to creativity and innovation, especially in research and development. On the other hand, managers may have to put a stop to an endless stream of ideas to avoid false hope, to prevent escalation of commitment, or to reallocate resources toward more effective uses. High levels of confidence in marketing, sales, or customer service employees and the tools and approaches they utilize may also have to be toned down, for example, when managing in cultures that place a higher value on modesty and deference. A highly resilient employee may continue to bounce back and recover from setbacks that should have indicated to that employee that a job or a career change is warranted. In other words, the discontinuities and situational idiosyncrasies of positivity and PsyCap research are also likely to translate into challenges for the realities of organizational practice that managers need to recognize and manage.

There may be situations where employees may even need to learn to express different levels of positivity and PsyCap. For example, funeral home employees may need to learn to display less positivity, without allowing their solemn expressions to take reign over their emotional well-being in other life domains. Nurses and other helping professionals may need to convey (p.360) optimism when dealing with patients and families, but may need a more pessimistic explanatory style when attempting diagnosis and contemplating alternative treatment procedures. Lawyers may choose different approaches depending on their defense strategies. They may prepare themselves and their clients to appear more confident, hopeful, and resilient, or they may instruct them to express hesitation, sadness, or remorse. The literature on emotional labor is rich with examples where display rules force employees to express unfelt emotions, which can over time lead to estrangement or to “deep acting” where the expressed emotions eventually become internalized (Morris & Feldman, 1996). Parallels can be drawn between such display rules in emotional labor and what can become a stereotype of positivity that can take its toll on employees due to unreasonable expectations of expressing certain levels of positivity and PsyCap that may not match those actually experienced.

Linking Positivity and PsyCap Research and Practice

One of the most critical challenges facing management practice today is the significant discrepancy between managers’ knowledge and expressed beliefs and the behaviors they truly exhibit regarding human resources, or what is now commonly called the “knowing-doing gap” (Pfeffer, 1998; Pfeffer & Sutton, 2000). Unlike in psychology, where the primary emphasis is on humans, today’s managers may or may not believe (but they most often say they do) that human resources are vital and provide competitive advantage. Despite what they say, they may still question whether human resources make enough of a significant contribution to organizational effectiveness to justify the costs involved in planning, implementing, or evaluating human-oriented initiatives. Furthermore, even if they do believe in the importance of human resources, what they actually do about those beliefs, and the consistency with which they hold onto and act upon those beliefs, too often turns out to be a different matter. The analogous situation occurs in health care. Medical doctors may know the evidence concerning the significant impact that positivity has on health outcomes (Lyubomirsky et al., 2005) and even length of life (e.g., the famous Nun Study, Danner, Snowden & Friesen, 2001), yet they most often ignore this research in doing check-ups or diagnoses (e.g., Diener & Biswas-Diener, 2008). Despite the evidence indicating organizations that value their human resources rank higher on a multitude of efficiency and effectiveness criteria (e.g., see Pfeffer, 1998), many practicing managers are tempted to forego human-oriented initiatives and practices. Unfortunately, this is especially true when economic problems such as in recent times drive tighter budgets, or when organizational politics favor more readily quantifiable, financially visible initiatives.

There is a major gap between organizational behavior research and management practice. Frequently, practicing managers invest valuable time and resources implementing initiatives that are not necessarily consistent with established research findings. What many practicing managers perceive to be “best practices” may be unrelated, or unfortunately even contradictory, to solid research evidence. Reasons for this gap may include ignorance, fear, or resistance to change on the practice side, as well as perceptions that academic research may be too theoretical and thus inapplicable to everyday management practice. Limited access or motivation to establish linkages between research and practice may further drive academics to their “ivory tower,” or at least exacerbate the perception of such attitudes in the eyes of practicing managers with limited training on the scientific process. This has recently triggered the call for “evidence-based management” (Pfeffer & Sutton, 2006; Rousseau, 2006), where those missing linkages can be created, urging academic researchers to become “scientist-practitioners” and helping practicing managers become “practitioner-scientists.”

Positive organizational behavior research and practice represent a case-in-point for the above challenges. Over the years, organizational behavior research supports the importance of positively oriented human characteristics and constructs such as positive personality traits, positive work attitudes such as job satisfaction and organizational commitment, and positive organizational actions such as organizational citizenship behaviors. However, similar to mainstream psychology, management practitioners focus on problem, dysfunctional employees’ poor performance and on containing stress, conflict, absenteeism, and turnover. Too often they ignore the “soft” side of management altogether. Moreover, despite the exponential increase in positive organizational research, even positively oriented management practitioners continue to be led by an explosion of popular management (p.361) literature, which promotes a plethora of intuitively appealing “best practices” with limited if any grounding in scientific research or validated evidence.

Ways to Close the Knowledge–Practice Gap

Drawing from Pfeffer and Sutton (2006), we propose a three-dimensional action plan to help narrow the existing gap between positivity and PsyCap research and actual practice. First, positive organizational researchers need to work on translating their findings into a language that management practitioners can readily understand and use. This should not be such a daunting endeavor. This is because most academicians have already mastered such language through their daily teaching in the classroom, especially with MBA students, who in most cases are full-time managers and employees, being their primary audience. Unfortunately, there is often a clear dichotomy between teaching and research languages. Such language differences may be contributing to the dilemma that many academic researchers may be providing an inferior product and an outdated knowledge base to students in the classroom in order to keep their attention, appear relevant, and get good evaluations. It should not come as a surprise that many MBA-qualified managers lack knowledge of cutting-edge research. While scientific jargon may be necessary for communication in academic circles, a more amiable language may facilitate the transfer of research knowledge to practicing managers and reduce their “ivory tower” perceptions of academicians. The classroom would seem to be an excellent vehicle for the development of such language and the practice of its communication.

Second, unlike many character strengths in positive psychology, which may have terminal value, human-oriented positive organizational behavior constructs are primarily pursued due to their instrumental value. Although valuable in their own right, especially for socially responsible organizations, unless positively oriented human resource initiatives can show a quantifiable return on investment, limited financial resources are likely to be allocated to other more objectively measurable investments. Management research on quantifying the return on investment in various human resource practices has been open to criticism (Latham & Whyte, 1994). Additional research needs to be conducted on quantifying the return on investment in and development of human resources in general, and in positively oriented interventions in particular. Furthermore, positive organizational behavior research needs to emphasize the linkages with productivity, retention, stress reduction, and other quantifiable outcomes that would render the findings of such research directly useful for organizational decision making and resource allocation.

Third, it is unfortunate that human resource (HR) professionals often lack the research methods and statistical analysis skills to speak the language, let alone use the methods, of their more financially oriented counterparts. This deficiency leaves HR managers in an inferior position in terms of their power and decision-making scope, the budget allocations they receive, and even their personal compensation. In order for HR managers to be involved in strategic decision making and resource allocation, they need to enhance their methodological and quantitative skills (i.e., they must become practitioner-scientists). Unlike many professions, most management education, training, and development programs, especially those oriented toward human resource professionals, overemphasize the “soft” side of management (e.g., leadership, motivation, communication), at the expense of the “hard,” data-driven aspects of decision making (e.g., research methodology, statistical analysis, financial analysis). This may have further contributed to the commonly observed intimidation of human resource professionals with and resistance to quantitative measurement and assessment of human resource initiatives. This reluctance of HR professionals to use quantitative assessment tools may come across to more financially oriented decision makers as aversion to accountability and responsibility, and worse that there is no hard evidence of validity or real value to the organization. Professional human resource management education, training, and certification standards are slowly catching up but need to be more cognizant of the new realities of the demands and challenges found in today’s highly competitive environment.

Other venues for bridging the research-practice gap include initiatives that promote academic-practitioner interactions such as practitioner-oriented conferences, non-academic speaking engagements, and consulting opportunities. However, motivating academicians to actively engage in such initiatives would require significant structural and cultural changes by academic institutions to enhance the status of (and rewards from) practice-oriented activities and publications.

(p.362) In the final analysis, the positive force, now backed by an evidence-based, scientific process, is too important for organizations and management practitioners to ignore or write off as too soft or even “Pollyannaish.” Positivity in general and PsyCap in particular is certainly not the answer or “silver bullet” for today’s embattled organizations, but it can no longer be ignored if they expect to compete and even survive in the increasingly negative environment.


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