Yesterday, we discussed positive psychology and the growing shift from fixing problems to identifying and reinforcing strengths.

Professor Fred Luthans has applied positive psychology to the workplace via Positive Organizational Behavior (POB), which examines “human resource strengths and psychological capacities that can be measured, developed, and effectively managed for performance improvement in today’s workplace”

The aim of positive psychology, Luthans says, is to:

• shift the emphasis away from what is wrong with people to what is right with people,
• focus on strengths (as opposed to weaknesses)
• be interested in resilience (as opposed to vulnerability)
• be concerned with enhancing and developing wellness, prosperity and the good life (as opposed to the remediation of pathology).

Making the leap to POB can have a remarkable impact on how we do business. It pulls the intense focus away from under-performers, and it puts the attention instead on high performers, asking “how can we create more of this?” This raises the bar for everyone, and raising the bar triggers what psychologists call the Pygmalion effect—the phenomenon where greater the expectation is that you place on people, the better they perform.

Luthans and his colleagues have identified Psychological Capital (PsyCap) as the critical component in Positive Organizational Behavior. PsyCap is characterized by four qualities:

• Self efficacy:  having confidence to take on and put in the necessary effort to succeed at challenging tasks
• Optimism: making a positive attribution and expectation about succeeding now and in the future
• Hope: persevering toward goals and, when necessary, redirecting paths to goals  in order to succeed
• Resilience: when beset by problems and adversity, sustaining and bouncing back and even beyond to attain success

Psychologists associate these four qualities with higher performance, commitment, and satisfaction. In fact, research has found that higher PsyCap directly leads to metrics such as lower employee absenteeism, lower employee cynicism and intentions to quit, and higher job satisfaction, commitment, and organizational citizenship behaviors. Researchers also report significant relationships between level of PsyCap and:

• desirable employee attitudes (job satisfaction, organizational commitment, psychological well-being),
• desirable employee behaviors (citizenship)
• multiple measures of performance (self, supervisor evaluations, and objective).
• undesirable employee attitudes (cynicism, turnover intentions, job stress, and anxiety)
• undesirable employee behaviors (deviance).

This is more than abstract research mumbo-jumbo; it directly relates to bottom-line numbers. Here’s just one example: One study found that PsyCap accounted for 11% of the variance in both voluntary and involuntary absenteeism. Last year, the mean employee studied took 48 sick hours and had a $100 per hour average billing rate. With 179,000 employees, the total loss due to sick leave was $859.2 million per year—the study showed that the potential cost savings was approximately an $8.5 million savings!

I think one of the most interesting and exciting things about the four PsyCap qualities (Self-Efficacy, Optimism, Hope and Resilience) is that they are what is called “state-like”.  That means that all four of these critical qualities are malleable and open to development. Conversely, “trait-like” qualities, like the big five personality dimensions, are stable and difficult to change, but you can actually make an impact on these four things.

The next question should be “how can we impact these four traits and build positive PsyCap at our organization”? Well, among other things, research has found PsyCap can be enhanced by a supportive work climate.  Researchers at the Gallup Leadership Institute have developed an intervention model that consistently shows a 2% or greater increase in PsyCap. That intervention includes feedback and vicarious learning from peers, as “each participant saw peers work toward their goals or heard success stories about how goals were attained.”

Here are some tips on encouraging PsyCap in your organization:

• Self efficacy:  challenge people and set clear, measurable and achievable goals
• Optimism: broadcast their success and the success of others
• Hope:  give people a feeling of agency and help them to plan a way to succeed
• Resilience: give people the resources, relationships and emotional support to help them recuperate from stress, conflict, failure, or changes in responsibility

I wrote to Dr. Luthans to ask about this, and he confirmed the connection between good recognition and PsyCap: “Recognizing others [has] a strong positive impact and is part of the positive psychology notion of Receive by Giving. The giving is recognition to others, and the receiving is building PsyCap.” He advocates one-on-one, genuine recognition with a specific message such as “I know you stayed over quitting time to finish the project I gave you at the last minute, it is appreciated”, for maximum impact.

Self-Efficacy, Optimism, Resilience and Hope are powerful drivers of success.  What are you doing to build them in your organization?

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