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Psychological Capital - What is it?

Introducing Positivity to Your Workplace

Psychological Capital - What is it?

Introducing Positivity to Your Workplace

Psychological capital is an essential concept to understand what drives positive organisational behaviours. As human resources practitioners, we are eager to study the application of positively oriented human strengths and psychological capacities that predict performance improvement in today’s workplace.

Foundation of Psychological Capital - HERO

In general, there are four types of resources that are integrated as psychological capital (PsyCap): Hope, Efficacy, Resilience, and Optimism, combined as HERO.

Hope is one’s motivational state that generates goal-directed energy and pathways to achieve goals. People with hope are determined to pursue goals and are able to seek alternatives to achieve goals.

Efficacy is depicted as one’s confidence in their own abilities to execute a task. Meanwhile, successful experience, modelling from significant others, social persuasion and positive feedback also play essential roles in boosting efficacy development.

Resilience is the capability to rebound from adversity, which shows a person having a positive adaptation pattern.

Optimism is an explanatory style that attributes positive events to personal causes and interprets negative events associated with external causes. Optimistic persons often expect good things to happen.

Together, HERO helps maintain an internalized sense of control and intentionality during the process of pursuing goals. Apart from the commonalities, HERO has its discriminant validity that makes each of the resources unique. For instance, resilience is usually reactive to encountering situations, while the other 3 resources are not.

Measuring Psychological Capital

To measure psychological capital, self-report and projective assessments are usually adopted. Particularly, the PCQ-24 self-report is almost used in each research, participants are required to rank on the scale based on different contexts. An example template is shown below:

To minimize the problem of social desirability and faking, the implicit measures in the assessment are intentionally designed to make the purpose of the survey less obvious to the participant.

How leaders develop people’s Psychological Capital?

Leaders play a significant role in Psychological Capital development. Leaders have to transform themselves first in order to act as a model to their employees. Also, an open and appreciative mindset is required to build employees’ strengths and trust. To illustrate this idea, you can easily tell that psychological capital is unlikely to develop under rigid organizational structure and toxic leadership patterns. Therefore, only if employees feel supported, recognized and appreciated by the leader and company, they will be more authentic and innovative, thus leading to a desirable outcome.

As a result, the positive outcomes brought by PsyCap for organisations such as productivity increase, satisfaction boost, workplace engagement and well-being improvement, will obviously be shown, thus making work overall a more meaningful and a place that people are eager to spend time and energy.

Not only the mental aspects can be benefited, study also found that PsyCap is positively related to physical health outcome (e.g optimal BMI level and cholesterol levels). It is also believed that undesirable attitudes and behaviours (e.g. cynicism, turnover, deviance) can be reduced by the increase of psychological capital of employees.

How do everyone develop their psychological capital?

To develop psychological capital comprehensively, all four aspects of HERO have to be trained. We can basically focus on the following processes:


  • Goals and pathways design
  • Implement scenario and obstacle planning


  • Experience success
  • Model relevant others
  • Receive positive feedback


  • Avoid risks
  • Identify and build assets


  • Interpret and attribute events positively
  • Develop positive expectancy

There are also various team-building skills to assist in the development of psychological capital:

  • SMART goal-setting method
  • Goal setting exercises (list out the specific goal, barriers, solving ways)
  • Do three positive interactions every day
  • Keep a diary of three things to be grateful for each day
  • Use contingent positive reinforcement (e.g. recognition, appreciation)
  • Balance well-being (e.g. relationships, exercise, meditation)

What’s more in Psycholoical Capital?

People often say that positivity can become contagious. Unsurprisingly, upward spirals, ripple effects and contagious effects can also be applied to psychological capital development.

Scholars examined that the psychological capital of subordinates can produce a positive impact on a leader’s psychological capital even under physical distance and interaction infrequency during a pandemic.

However, people may also be interested in how different members in a group can contribute to each others’ psychological capital, whether the lowest psychological member may drag the team down or the higher psychological member may become the critical mass to pull the team up is still left unknown. The contagion mechanism through which psychological capitals spread upward, downward or laterally remains largely unexplored.

Furthermore, despite the advantages of Psychological Capital, potential harm or conditions still need to be further explored. Some evidence suggests that too much of a good thing will give rise to defects, namely overconfidence, false hope and unrealistic optimism.

Psychological Capital


To sum up, psychological capital is an evidence-based positive approach for business leaders to look into human strengths. Despite the fact that many directions remain unexplored in-depth, the foundation of psychological capital, generally about positivity, as a valuable resource for individuals, teams and companies cannot be denied.



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