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What is Psychological Capital?

Updated on October 22, 2012

Dr. Fred Luthans

Positive Psychology and Positive Organizational Behavior

At the turn of the 21st century, Martin Seligman, former head of the American Psychological Association, recognized an imbalance in psychological research in the United States and abroad. From his point of view, researchers in the field of psychology had given too much attention to the negative side of personal psychology and too little attention to the positive, healthy side. In light of this problem, Seligman called for research in what came to be known as "positive psychology." This new wave of research was meant to examine the 'average man' (rather than the "abnormal man") with "an interest in finding out what works, what is right, and what is improving."

Following this new wave of research into positive psychology, organizational behavior scientists began to construct organizational and leadership models that looked for the positive antecedents relevant to optimal work performance. At the University of Michigan, organizational scholars e.g. Jane Dutton, Robert Quinn, Kim Cameron began what they aptly called "positive organizational scholarship."

Similarly, scholars mostly associated with the University of Nebraska's Gallup Research Center (e.g. Fred Luthans, Bruce Avolio and their colleagues) began a thread of research called "positive organizational behavior." For the most part, this later research concentrated on the development of conceptual frameworks for "authentic leadership" and "psychological capital." This hub gives a brief description of psychological capital.

Hope - Will Power and Way Power to Accomplish a Goal

The first component of positive psychological capital is hope. Hope in ordinary language tends to have the connotation of "wishing for the best." However, within the psychological capital framework, hope is operationally defined as the willpower (referred to as agency) and waypower ( or pathways) to set and accomplish goals. This definition of hope was first introduced by Dr. Charles Snyder and his colleagues. Hope in the psychological capital framework includes the wherewithal to devise pathways and alternate pathways to accomplish objectives and goals. Thus, 'hope" drives a leader or follower to their optimal performance in the workplace.

Self-efficacy - Personal Confidence to Successfully Complete a Task or Objective

The concept of self-efficacy is perhaps the most well-known and widely researched concept in the psychological capital framework. Self-efficacy ( or confidence) was introduced by social psychologist Albert Bandura and can be defined as the relative certainty an individual has that he or she can accomplish a given task. Self-efficacy is formulated through (a) past mastery of a task; (b) vicariously learning through observation of a respected other; (c) persuasion from a siginificant other; and (d) physiological and/or psychological arousal. A leader or follower within an organization or at a workplace will more likely fulfill their assigned roles if they have personal confidence that they can do so. Each persons level of self-efficacy will ebb and flow in conjunction with a given context.

Optimism - Personal Assurance of a Positive Outcome

Optimism is the third component of Fred Luthans' psychological capital. Optimism refers to the personal assurance an individual has that activities will result in a positive outcome. Luthans' and his colleagues looked to Martin Seligman and Charles S. Carver for conceptualization of optimism.

Seligman tied optimism to attribution theory, and defined it as “making an internal, relatively stable, and global attribution regarding positive events such as goal achievement, and an external, relatively unstable, and specific cause about negative events like a failed attempt at reaching a goal." In simple terms, Seligman suggested that optimists tend to interpret bad events as being only temporary, while pessimists interpret bad events as being permanent; and vice versa.

In contrast to Seligman’s focus on optimism through attribution theory, Carver and Scheier (2002) took an approach that linked optimism to expectancy theory whereby the expectation of a desirable outcome will result from increased effort. Thus, Carver and Scheier concluded simply, “optimists are those who expect good things to happen to them; while pessimists are those who expect bad things to happen to them."


Resilience - The Ability to Bounce Back in the Face of Adversity (or Severe Success)

Resilience is the fourth component of psychological capital. in this context, Luthans looked to Ann Masten for the operational definition. Thus, in this context, resilience refers to an individual's ability to rebound or bounce back from adversity or extreme success. A person who displays this quality is tenacious and as such keeps going in the face of seemingly impossible obstacles and odds.

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    • Millionaire Tips profile image

      Shasta Matova 

      5 years ago from USA

      I took several organizational behavior for my MBA, but it always felt like something was missing. I don't think they covered psychological capital, so thank you for bringing me up to date with my knowledge. Voted up.

    • ecoggins profile imageAUTHOR

      ecoggins 

      5 years ago from Corona, California

      Denise, thank you for your comment. Psychological capital did indeed spring from the positive psychology movement. It is good to hear that practicing psychologists are pursuing what works as much as they are what does not.

    • denise.w.anderson profile image

      Denise W Anderson 

      5 years ago from Bismarck, North Dakota

      It is interesting to note that the psychologists are studying well people as well as those with abnormal issues and that research is showing that those with what you call "psychological capital" are those with the basic elements of hope, self-efficacy, optimism, and resillience. These are the things that we try to instill in the self-improvement process for those that are wanting to make major life changes for the better.

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