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Psychological Capital: How Savvy Employers Invest For The Future


You have heard of human capital but do you and your organisation know about psychological capital? Psychological capital[1] refers to a positive state-like human capacity or ability. It consists of a series of psychological resources which together contribute to an individual’s positive psychological state and capacity for development and success.

Components of psychological capital

The components of psychological capital as described by Luthans[1] are:

  • self-efficacy (having the confidence to take on and put in the necessary effort to succeed at a challenging task)
  • optimism (making a positive attribution and expectation about succeeding now and in the future)
  • hope (persevering towards goals and where necessary redirecting paths/revaluating goals in order to succeed
  • resilience (when beset with problems and adversity, sustaining or bouncing back and even beyond to achieve success[1].

Psychological capital exerts its influence because its component psychological attributes are potent predictors of cognitions, attitudes and behaviours of employees.

Research has shown that when combined these factors represent a core factor which has been shown to predict several important performance outcomes in the workplace[2]. These include:

  • lower employee absenteeism
  • less employee cynicism
  • greater retention of staff
  • higher job satisfaction
  • and greater organisational commitment[2].

Savvy employers work hard to provide a supportive work environment which nurtures and enhances psychological capital because they know it is good business. Additionally, Luthans argues that organisations with employees who have high psychological capital are much more flexible and cope better in the face of rapid organizational change[3] – a reality for many companies today.

We can all learn how to be more positive

Critics may ask how much these attributes (such as a capacity for hopefulness) are hard-wired in our genes? Luthans argues that there is a capacity for everyone to grow their psychological capital and he has demonstrated gains for individuals who have attended short training sessions in both classroom and field settings. Luthans argues that we can all learn how to be more positive and that ‘positivity breeds positivity’.

Cognacity provide a range of services including individual coaching and company level training to nurture and build resilience.


  1. Luthans, Youseff and Avolio, Psychological Capital, Oxford University Press, 2007.
  2. Luthans, F., Avolio, B.J., Avey, J.B., & Norman, S.M. (2007). Positive psychological capital: Measurement and relationship with performance and satisfaction. Personnel Psy-chology., 60, 541–572
  3. James B. Avey , Luthans F. & Wernsing S. (2008) Can Positive Employees Help Positive Organizational Change? Impact of Psychological Capital and Emotions on Relevant Attitudes and Behaviors ,The Journal of Applied Behavioral Science, Vol. 44, 1, 48-70‏

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