Contemporary Issues

in Lec-10
Human Resource -Psychological Capital
Management
What is Psychological Capital?
• Psychological capital refers to a set of resources a person can use to help
improve their performance on the job and their success.
• Psychological capital (PsyCap) is a theory in ‘positive organisational
behaviour’ (POB) which focuses on developing the person for them to
reach their full potential in order to increase performance and wellbeing
in organisations (Luthans, Luthans, & Luthans, 2004).
• PsyCap is believed to be a combination of four key resources that are
outlined in the HERO model (Luthans & Youssef-Morgan, 2017).
• These psychological resources are hope, efficacy, resilience and optimism.
• They are considered to be ‘state-like’, which means they can change and
be developed with interventions, rather than being traits that are seen as
fixed (Luthans, Avolio, & Youssef, 2007).
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H.E.R.O Model
H.E.R.O Model is defined as
• Hope
• Efficacy
• Resilience
• Optimism

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H.E.R.O Model
• Hope
• Set and clarify organizational and personal goals that are specific and
challenging.
• Stepping methods to break down goals.
• Develop alternative pathways.
• Acknowledge enjoyment in the process.
• People with high hope put more effort toward their goals than those with
low hope.
• They come up with alternative ways to meet their goals when the first try
doesn’t work.
• In other words, high hope-ers work hard to reach their goals and will adjust if
what they are doing doesn’t work.
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H.E.R.O Model
• Self-Efficacy
• Self-efficacy is an important part of psychological capital.
• It refers to a person’s confidence in their ability to control outcomes and
overcome difficult challenges.
• In other words, someone with high self-efficacy believes they have
control of what happens to them.
• These people know they can beat whatever challenges come their way.
• People like this don’t shy away from big goals and are motivated to
accomplish them.
• They aren’t discouraged by failures and believe they have the control to
fix it. Put simply, those high in self-efficacy believe in themselves.
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H.E.R.O Model
• Resilience
• The third part of psychological capital is resilience.
• The ability to bounce back from challenges, risks, and failures is
Resilience.
• Resilient people can adapt to changing and stressful situations
effectively.
• They are good at working through negative experiences and changes
happening around them.
• Most people call these types of people ‘strong’ after seeing them
come back from a hard situation.

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H.E.R.O Model
• Optimism
• Optimism is an individual difference variable that reflects the extent to which
people hold generalized favorable expectancies for their future.
• Higher levels of optimism have been related prospectively to better subjective
well-being in times of adversity or difficulty (i.e., controlling for previous well-
being).
• In research, optimism means a person’s expectation of positive outcomes.
• Simply, those high in optimism believe things are going to end well.
• Optimistic people are motivated to work towards their goals and deal with
issues right away.
• Similar to self-efficacy, optimistic people believe things will go well even when
things get hard. Optimistic people think things will be ok in the end.
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Leadership and PsyCap

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Leadership and PsyCap

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Benefits of Psychological Capital
• According to a recently published statistical analysis of 244 combined studies,
conducted between 2007 and 2020 (Loghman et al., 2023), as well as a previous
statistical analysis of 51 studies conducted prior to 2011 (Avey et al., 2011),
psychological capital results in:
• Higher job performance (both self- and supervisor-reported)
• Higher worker engagement
• Higher job satisfaction
• Lower rates of employees wanting to find a new job (turnover intention)
• Lower workplace burnout
• Positive health and relationship outcomes
• Higher subjective well-being
• Lower diagnoses of deficits, such as dysfunctional mental health and substance
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