– Dr. Iram Ahmed –
In the dynamic world of today, efficient human resource management is essential, yet it comes with a variety of management approaches and ideologies. The notion of “human capital” is certainly familiar to us. It alludes to an organization’s human resources, which include the employees’ abilities, skills, and expertise. Human capital, and more recently social capital, are being hailed in theory, study, and practice as a result of the growing acknowledgement of human resources as a competitive advantage in the modern global workforce. Psychological capital, however, is probably unfamiliar to most of us. It has been demonstrated to have a significant impact on employee wellness and productivity. However, business scholars and practitioners have thus far mostly disregarded positive psychological capital. The importance of “who I am” is equal to that of “what I know” and “who I know.”
Today’s leaders and their colleagues may improve individual and organizational performance by focusing on personal strengths and positive traits rather than dwelling on personal dysfunctions and failings. This will help them become more resilient, confident, and hopeful. According to this expanding body of research on Organizational behavior the concept of psychological capital brings a favourable environment for personal growth is one that possesses the qualities of self-reliance while overcoming obstacles (self-efficacy), optimism for future success (optimism), determination (hope), and accomplishment despite setbacks (resilience). Sustainable competitiveness is positively impacted by psychological capital. It is anticipated that psychological capital’s beneficial effects will lower expenses and lessen adverse effects within a company.Building psychological strength in employees is essential for creating a successful business in the current economic environment.
The idea of Psychological Capital or PsyCap for short, which was first created in an organizational setting, has been tied to both job and life happiness. As a source of competitive advantage, Luthans created the idea of Psychological Capital (PsyCap) under the general heading of positive organizational behaviour (POB), which is the “study and application of positively orientated human resource assets and psychological capacities.” Fred Luthans et al. (2007) stated, that psychological capital is “an individual’s positive psychological state of development” and is typified by high levels of HERO, which stands for hope, efficacy, resilience, and optimism. PsyCap, a fundamental concept for wellness and growing relies on gratitude & positive emotions. The four components of PsyCap, examines an individual’s overall worth, and attempts to motivate its application in training and leading.
Organizations were the original target of the Psychological Capital (PsyCap) idea. Fred Luthans, an innovator who proposed that psychological development, not intellectual progress, should be the primary goal of organizational growth. He maintained that as human resources are more unique than financial, structural, and physical resources, they can provide a competitive edge. Employees have two kinds of knowledge: explicit knowledge and tacit knowledge.Tacit information is distinct, cumulative, linked, and non-transferable to rivals.Therefore, it provides a sustained competitive advantage. Based on this notion, Fred Luthans recommended that instead of employing a trained temporary staff, businesses should engage in human capital management, including developing tacit knowledge. The concept of investing in people to get a competitive edge was revolutionary at the time.
PsyCap has state-like capabilities and resources that can be trained, HR professionals in businesses may provide supervisory additional training so they can function as role models for their subordinates. An individual is more likely to “weather the storm” in a demanding personal or dynamic organizational setting, and is more hopeful, effective, resilient, and cheerful. Together, the four resources that make up psychological capital function effectively. Business executives must build psychological capital because it promotes a resilient and upbeat workplace culture, empowers staff to overcome obstacles, welcome change, and do their best work, all of which contribute to the success of the company. By acting as a safety net against unforeseen expenses or economic downturns, a reserve of financial capital can contribute to long-term prosperity. By acting as a buffer against the emotional and psychological pressures of work that might negatively affect organizational and individual employee performance, a large store of psychological capital can also assist assure long-term economic success.
Employees’ professional and personal development may be encouraged and promoted by organizations and their leaders. They should offer chances for development, training, and skill enhancement. The organizations can genuinely acknowledge and honour the accomplishments of their staff, offer workers a fair amount of independence and flexibility, and educate team leaders on how they should demonstrate these behaviours. Employees’ overall state of mind can be improved along with their performance on the job by developing psychological capital. Instead of focusing on the elimination of negative psychological states, psychological capital concentrates on cultivating good psychological states. Although developing psychological capital may require some time, energy, and resources, studies indicate that the possible long-term advantages may much exceed the drawbacks. Employers must consider psychological capital as an extra type of capital that they should cultivate in order to assist guarantee long-term success.
Details of the Authoress
Dr. Iram Ahmed is currently working at Inderprastha Engineering College as an Asst. Professor, MBA Department. Prior to this she also held teaching position as a Lecturer and has also worked in corporate in the field of Human Resources. She holds Ph.D. in the area of Organizational Behaviour and possesses a Master’s degree qualification in Business Administration with Human resource management as major and marketing as minor.
Her research and consulting interest includes Psychological Capital, Work Behaviour, and Engagement. Dr. Ahmed has also presented papers in International conferences. Published papers in refereed Journal, related to Psychological Capital and other Organizational Behaviour aspects.
(Sources provided below)
References
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- Achor, S. (2011). The Happiness Advantage: The Seven Principles of Positive Psychology That Fuel Success and Performance at Work. London, UK: Random House.
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- Luthans, F. (2002). The need for and meaning of positive organizational behaviour. Journal of Organizational Behaviour, 23, 695-706.
- Luthans, F., Avolio, B. J., Avey, J. B., & Norman, S. M. (2007). Positive Psychological capital: measurement and relationsihp with performance and satisfaction. Personnel Psychology, 60, 541-572.
- Luthans, F., & Youssef-Morgan, C. M. (2017). Psychological Capital: An Evidence-Based Positive Approach. Annual Review of Organizational Psychology and Organizational Behavior, 4, 339-366.
- Luthans, F., & Youssef, C. M. (2004). Human, Social and Now Positive Psychological Capital Management: Investing in People for Competitive Advantage. Organizational Dynamics, 33(2), 143-160.
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- Youssef, C. M., &Luthans, F. (2007). Positive Organizational Behaviour in the Workplace: The Impact of Hope, Optimism and Resilience. Journal of Management, 33, 774-800.
Disclaimer: The views expressed by the author in this feature are entirely their own and do not necessarily reflect the views of INVC .
