Pacific B usiness R eview (International)

A Refereed Monthly International Journal of Management Indexed With Web of Science(ESCI)
ISSN: 0974-438X(P)
Impact factor (SJIF):8.603
RNI No.:RAJENG/2016/70346
Postal Reg. No.: RJ/UD/29-136/2017-2019
Editorial Board

Prof. B. P. Sharma
(Principal Editor in Chief)

Prof. Dipin Mathur
(Consultative Editor)

Dr. Khushbu Agarwal
(Editor in Chief)

A Refereed Monthly International Journal of Management

A Study on the Developmental aspects of Psychological Capital in Indian Context

 

Iram Ahmed

Ph.D. Scholar,

Department of Management,

School of Management and Business Studies,

JamiaHamdard University

 

Dr. Nudrat Moini Rahman

Assistant Professor,

Department of Management,

School of Management and Business Studies,

JamiaHamdard University

 

Abstract

Since the last decade, in order for any human to live a more productive and meaningful life efforts by organization are made at workplace. The efforts for better understanding of the functioning of humans by a positive lens has been applied to the workplace. Consequently, “positive organizational behavior (POB) has been developed” (Bakker and Schaufeli, 2008). As said by Luthans, “POB is a study where the positive oriented human resource strengths and psychological capacities are contributed to organizational outcomes”. Avey et al. stated that “an increase in research till date indicates that psychological capital (PsyCap), has a positive effect on important work attitudes, behaviors and work performance”. The study aims to find: whether leadership, work climate and job content will contribute in the development of PsyCap of employees. Whether leadership, work climate and job content are having any relation amongst each other. The findings were there is no impact of leadership and job content on the development of PsyCap and work climate has an impact on the development of PsyCap. And there is correlation between leadership, work climate and job content regarding the development of PsyCap of the employees.

Keywords: Effective Organizational Performance, Job Content, Leadership, Psychological Capital, Work Climate.


Introduction

Psychological Capital is a positive construct that has come to the fore from the field of positive organizational behavior. “POB is a study where the application of positively oriented human resource strengths and psychological capacities contribute to organizational outcomes, such as employee attitudes, behaviors and performance” (Luthans and Youssef, 2007c). “An increase in the body of research till date has indicated that psychological capital (PsyCap), has a positive effect on important work attitudes, behaviors and performances, which include job satisfaction, organizational commitment, absenteeism, turnover intention, organizational citizenship behavior (OCB) and work performance” (Avey et al., 2009; Avey, Luthans, Smith, and Palmer, 2010; Luthans, Avolio, Avey and Norman, 2007a; Walumbwa et al., 2010).

For the better understanding of the development of Psychological Capital research, however, the studies have suggested that more research work is needed to better perceive the concept of PsyCap. The purpose of this study is to enrich our understanding of the unique effect on PsyCap of work life, which contributes to the literature in three ways.

Firstly, “a proposed area for conceptual development of PsyCap is an expansion to encapsulate the other capacities to meet the POB criteria” (Youssef &Luthans, 2007). “Researchers have advocated and identified various psychological capacities for their possible inclusion in PsyCap” (Luthans, Youssef et al., 2007). They have been categorized into four domains, cognitive, affective (humor), social and higher-order strengths. Despite theoretical identification of possible supplements to the PsyCap framework, to date empirical assessment relating to the ‘fit’ of any of these additional constructs is yet to be published. Consequently, “expansion of the PsyCap network is keenly cited as a future research direction, so that PsyCap can reach its full potential” (Youssef &Luthans, 2011; 2012).

Secondly, “the existing PsyCap literature has focused almost exclusively on assessment and development of PsyCap at the individual level: however, given that work teams are becoming increasingly important to both organizational structure and success; with 83 percent of managers identifying teams as a key ingredient to their organization’s success (CCL, 2006), a small number of studies have begun to examine the potential of a group or team level version of the construct”. “As teams are a type of work group that has a certain level of interdependency that enables the achievement of collective goals, it is theorized that team members are exposed to emotional contagion processes whereby a collective form of psychological capital is developed and similar processes have been demonstrated with team affect”. Like, “organizational social capital, a collective construct reflecting the quality of social interactions such as shared trust” by Leanna & van Burren, 1999.

Lastly, “a recent meta-analysis (Avey, Reichard, Luthans, &Mhatre, 2011) found dozens of empirical studies that yielded significant predictive validity of PsyCap in individual outcomes; however, this meta-analysis also revealed a major omission in the theoretical development and empirical research on PsyCap”. “Avey, Reichard, and colleagues (2011) note they found very few studies that measured anything pertaining to the formation of PsyCap”. In other words, few have considered what the antecedents of PsyCap are. After an extensive literature review they also note “there has been no systematic method of examining PsyCap, which suggests this may be a fruitful area of future research”

Moreover, the findings from international research settings are not consistent. “The present study will be conducted with employees from India and will answer Luthans and Youssef’s (2007c) call for testing the external validity of PsyCap in a wide range of settings with an aim to understand its contextual applicability and limitations”.

Review of Literature

Ever since Psychology has emerged, it has mainly focused on the ailments of human beings and fixed what is wrong. “Whereas Positive psychology, focuses on people’s strengths and how to promote positive functioning” (Snyder & Lopez, 2007). Positive psychology is defined as “the scientific and applied approach to uncovering people’s strengths and promoting their positive functioning” (Snyder & Lopez, 2007, p. 3). Psychology in the field of OB focuses on what is right with people rather than their ailments. Similar to this ground is Positive emotional states such as contentment and wellbeing.

“Organizational behavior tends to emphasize the negative aspects of behavior in the workplace, by shifting the focus to strengths and positive capacities, it will improve the understanding of the workplace” (Luthans, 2002). “This shift is referred to as Positive organizational behavior (POB), and is defined as “the study and application of positively-oriented human resource strengths and psychological capacities that can be measured, developed, and effectively managed for performance improvement in todays’ workforce” (Luthans, 2002, p. 59). POB is “the study which tells what’s going correct in the organization”. “It is the amalgamation of positive psychology and organizational behavior (as illustrated in Figure 1), POB can be taught, developed, and changed within the workplace”.

Figure 1: Positive organizational behavior is the merger of positive psychology and organizational behavior.

Psychological Capital, is defined as “a fundamental concept of positive organizational behavior. (Luthans et al. 2007a) coined the term Psychological Capital, or PsyCap, describing efficacy, optimism, hope, and resiliency all together”. “Psychological Capital is a positive and developmental state where an individual is high at efficacy, optimism, hope and, is resilient. PsyCap has out with human capital such as knowledge and skills” (Luthans, Youssef, &Avolio, 2007b). “PsyCap has also gone beyond social capital such as relationships and networking”.

Self-efficacy. The first construct of PsyCap is self-efficacy. The PsyCap’s self-efficacy component has been derived from Albert Bandura’s social cognitive theory, where self- efficacy is “people's beliefs about their capabilities to produce designated levels of performance that exercise influence over events that affect their lives” (p. 71). “Self-efficacy and efficacy are used interchangeably in PsyCap”. “Five cognitive processes in efficacy are mentioned by Bandura which are fundamental in PsyCap, they are symbolizing, forethought, observation, self-regulation, and self-reflection”. “Efficacy is variable and domain-specific in the concept of PsyCap”. It is based on proficiency, persuasion, and always has scope for betterment.

Hope. Another construct within PsyCap is hope. “Hope is more than wishful thinking or a positive attitude, it does not only involve willpower but is also a path to accomplish goals” (Luthans et al., 2007a). PsyCap hope is based on the definition by Snyder et al. (1991) of “a positive motivational state that is based on an interactively derived sense of successful (1) (goal-directed energy) agency, and (2) pathways (planning to meet goals)” (p. 287). The first component of hope, is the “cognitive capability of setting goals and aiming to accomplish them through determination”. “Also known as willpower”. “The second component of hope is pathway, it creates alternative paths to reach the goal as needed”.

Optimism. Third construct of PsyCap is Optimism, it is not just being hopeful and confident about the future. “The occurrence of certain events, both positive and negative, contributes to PsyCap optimism” (Luthans et al., 2007a). According to Luthans et al. (2007a), optimism is “an explanatory style that attributes positive events to personal, permanent, and pervasive causes and interprets negative events in terms of external, temporary, and situation-specific factors” (p. 90-91); “Optimists take credit for the desirable events in their lives, believing that the causes are within their control and this control of positive events can be translated into success in the future since it is within their influence”. Also, they attribute the causes of undesirable events to be external allowing them to continue to be confident about the future. “Conversely, pessimists do not give themselves credit for desirable events and tend to blame themselves for the undesirable events”.

Resiliency. The last construct of PsyCap is resiliency. Resiliency has been defined as “a class of phenomena characterized by patterns of positive adaptation in the context of significant adversity or risk.” by Masten& Reed. “There are several characteristics that may contribute to one’s resiliency including cognitive abilities, self-perceptions, faith, emotional stability, and self-regulation”. “Resiliency is reactive in nature; however, when viewed as proactive, resiliency may lead to positive rewards” (Luthans et al., 2007a).

As mentioned above, “the positive psychological resources of hope, efficacy, optimism and resilience have been determined to best meet PsyCap inclusion criteria; however, these four were not meant to represent an exhaustive list” (Luthans, Youssef et al., 2007). “The rich emerging body of knowledge on positive psychology presents a wide range of positively oriented, unique individual, group and organizational resources, strengths and virtue” (Lopez& Snyder, 2009).

In this paper an effort is made to review the concepts of Leadership, Work Climate and Job Content in various literature, so that there is essential foundation of conceptual background behind this research proposal.

Leadership

“Leadership is both a research area and a practical skill encompassing the ability of an individual or organization to lead or guide other individuals, teams, or entire organization”. (Gaertner, 2000: 487), argues that “more flexible and participatory management styles can strongly and positively enhance organizational commitment”. “Organizations need to ensure that leadership strategies are aimed at improving employee commitment rather than compliance as with autocratic leadership style”. Blickle (2003), asserts that as suggested by Drucker (1999), “organizations are now evolving toward structures in which rank means responsibility but not authority, and where the supervisor’s job is not to command, but to persuade”. Thus, in order to be effective, it is critical for managers to influence their subordinates, peers, and superiors: in order to assist and support their proposals ors plans, and to motivate them to carry out with their decisions. Howell &Avolio (1993), “Opine that leaders who enhance followers’ confidence and skills to devise innovative responses, to be creative, and to take risks, can also facilitate the changeover processes in organizations”. Thus, whether leadership as a quality has a significant relation in the development of PsyCap has not been explored so, the study will seek to understand it better.

H0: Leadership has no impact on the development of Psychological Capital of employees.                                                                       

Work Climate

“Organizational climate, according to Schneider (2000), represents the descriptions of the things that happen to employees in an organization”. He suggests that “Climate is behaviorally oriented and has been consistently described as employees’ perceptions of their organizations, the construct has suffered over the years from conflicting definitions and inconsistencies in operationalization”. “The dominant approach conceptualizes climate as the shared perceptions of employee’s organizational events, practices, and procedures; these perceptions are assumed to be primarily descriptive rather than affective or evaluative” (Schneider &Reichers, 1983). “The rationale behind aggregating individual data to a unit level is the assumption that organizational collectives have their own climate and that these can be identified through the demonstration of significant differences in climate between units and significant agreement in perceptions within units” (James, 1982). The research gap suggests that various studies are conducted on the dimensions of climate but none leads to the theory of development of PsyCap. So, to better encapsulate this aspect the study will explore on the fact that whether work climate contribute in the development of PsyCap.

H0: Work Climate has no impact on the development of Psychological Capital of employees.

Job Content

Job content refers to “the description of the position, which tells the job applicant the tasks they will be performing”. Individual work performance outcome depends on the job content. In order to detect and measure the change in individual work performance job content plays a vital role. “Individual work performance is considered to be a multidimensional construct” (Campbell, 1990; Austin and Villanova, 1992). “Individuals high in PsyCap have positive expectations about future outcomes and greater belief in their ability to deal with various challenges involved in the job and these positive psychological states motivate individuals to exert greater effort and perform well in their job, which in turn enhances their job satisfaction” (Luthans, Avolio, et al., 2007). “Growing work has also examined PsyCap’s influence on undesirable employee attitudes at work such as their turnover intentions and cynicism” (see Avey, Reichard, et al., 2011). “Individuals high in PsyCap exhibit lower levels of absenteeism and job search behavior” (Avey et al., 2006; Avey et al., 2009; Chen & Lim, 2012). The study will highlight whether Job Content helps develop PsyCap of employees.

H0: Job Content has no impact on the development of Psychological Capital of employees.

The gap in the literature also suggests that the role of leadership, work climate and job content as contributing to the development of PsyCap through positive attitude of employees has not been explored; thus proposed study seeks to better understand the individual-level PsyCap through the exploration of these aspects. Specifically, the proposed study will explore and assess creativity, mindfulness, gratitude, forgiveness, emotional intelligence, spirituality, authenticity and courage of meeting PsyCap’s inclusion criteria of being theory based, measurable, state-like or developmental and linked to performance and other work related outcomes. Whether leadership, work climate and job content are closely associated with each other will also be explored.

H0: There is no significant association between Leadership and Work Climate.

H0: There is no significant association between Leadership and Job Content.

H0: There is no significant association between Work Climate and Job Content.


Proposed Research Model

 
   

 

 

 

 

 

 

Figure 2


Research Questions: The research questions are as follows:

  1. Does PsyCap of an employee develops with leadership behavior, work climate or with their job content?
  2. Are all the three leadership, work climate and job content interlinked with each other in developing PsyCap?

 

Objectives:

  • To assess whether Leadership will contribute in the development of PsyCap of employees.
  • To study whether Work Climate is contributing in the development of PsyCap of employees.
  • To examine whether Job Content will contribute in the development of PsyCap of employees.
  • The study will explore whether Leadership, Work Climate and Job Content are having an association in the development of PsyCap of employees.

Sampling Procedure

The sampling is done according to the quota or stratified random sampling procedure. Executives will be randomly selected from Indian organizations from Delhi NCR. This study is carried out on all three levels of executives from top, middle and junior level of Indian organizations in Delhi NCR. The units of observation in the present study are employees working at the Top, middle and junior level. The analysis is a survey-based methodology which is provided, along with discussion of idea associated with this type of research. This will be followed with an overview of the specific data analysis approaches used in this study.


Scale Measurement

Table 1

 

S. No.

Variables

No. of Items

Cronbach’s Alpha

Items Deleted

1.

Leadership

10

0.856

None

2.

Work Climate

8

0.897

None

3.

Job Content

7

0.922

None

4.

Psychological Capital

5

4

0.787

0.876

Deleted 1st

 

 

Cronbach’s Alpha was used to test the reliability of the items in the variables. There were 10 items in leadership, 8 in work climate, 7 in job content and 5 items in Psychological Capital. The Cronbach’s Alpha of leadership is 0.856, work climate is 0.897 and job content is 0.922. The Cronbach’s Alpha of PsyCap came to be 0.787 when one item was removed from the analysis, which later came to be 0.876. In the above Table 1, the Cronbach’s alpha value of all the variables is more than 0.65, thus the reliability is significant.

Interpretation:

R2= 0.634

Since correlation is 0.634 there is 63.4% variation in Psychological Capital due to Leadership, Work Climate and Job Content. 36.6% of variation in Psychological Capital is still unexplained. We find that,

  • The observed p value in the case of Leadership is 0.204 which is more than 0.05. We have sufficient evidence available to accept the null hypothesis. Therefore, we accept the null hypothesis, i.e. Leadership has no impact on the development of Psychological Capital.
  • The observed p value in the case of Work Climate is 0.010 which is less than 0.05. We have sufficient evidence available to reject the null hypothesis of all Regression coefficients to be zero. Therefore, we reject the null hypothesis, i.e.Work Climate has no impact on the development of Psychological Capital.
  • The observed p value in the case of Job Content is 0.211 which is more than 0.05. We have sufficient evidence available to accept the null hypothesis. Therefore, we reject the null hypothesis, i.e. Job Content has no impact on the development of Psychological Capital.

Correlation between Leadership and Work Climate R= 0.609

Correlation between Leadership and Job Content R= 0.597

Correlation between Work Climate and Job Content R= 0.641

  • The observed p value in the case of Leadership and Work Climate is 0.000 which is less than 0.05. We have sufficient evidence available to reject null hypothesis of all Correlation coefficients to be zero. Therefore, we reject the null hypothesis i.e., There is no significant association between Leadership and Work Climate.
  • The observed p value in the case of Leadership and Job Content is 0.000 which is less than 0.05. We have sufficient evidence available to reject null hypothesis of all Correlation coefficients to be zero. Therefore, we reject the null hypothesis i.e., There is no significant association between Leadership and Job Content.
  • The observed p value in the case of Work Climate and Job Content is 0.000 which is less than 0.05. We have sufficient evidence available to reject null hypothesis of all Correlation coefficients to be zero. Therefore, we reject the null hypothesis i.e., There is no significant association between Work Climate and Job Content.

Regression Equation:

Y= α + βx

PsyCap = α + β1 Leadership + β2 Work Climate + β3 Job Content

PsyCap = (-3.370E-16) + 0.229(leadership) + 0.423(work climate) + 0.208(job content)

The value of β1 is 0.229 which implies that if Leadership increases by 1 unit PsyCap will increase by 0.229 unit. The value of β2 is 0.423 which implies that if Work Climate increases by 1 unit PsyCap will increase by 0. 423 unit.The value of β3 is 0.208 which implies that if Job Content increases by 1 unit PsyCap will increase by 0. 208 unit.

Findings

As the researcher was interested in knowing the relationship of leadership, work climate and job content with respect to PsyCap of employees. Regression test was conducted. By evaluating the values we found that,

  • Leadership and Job Content has no impact in the development of PsyCap of employees, whereas Work Climate has an impact on the development of PsyCap of employees.
  • Leadership, Work Climate and Job Content all are correlated with each other. There is significant association amongst the three.

The study analyzed all the three variables and their impact in the development of PsyCap of employees. It is found that work climate is impacting in the development of PsyCap whereas Leadership and Job content does not impact. Work climate is playing a vital role in the development of PsyCap. Work climate is where the behavior of organization is seen and in order to have a good work climate it is necessary to minimize the disruption at work place which will cause the development of PsyCap. This Research has also demonstrated positive association of leadership with work climate and job content, and work climate with job content. Our findings are also in alignment with the differential relationships of the PsyCap components with the variables that are contributing to its development whereby work climate is found to be a significant predictor of PsyCap. Also, we investigated that leadership and job content are having no significant relationship on PsyCap. In order to achieve effective organizational performance work climate has the major impact on PsyCap. In order to determine whether employees who are having certain leadership quality tend to have a good work climate also. Employees who are having good work climate are also having satisfiable job characteristics. And, employees who are satisfied with their job content are also having leadership quality. Leadership, work climate and job content all are positively correlated with each other.


Results


Hypothesis Testing


 

Hypothesis

Independent Variable

Dependent Variable

P value

Test Statistics

Result

1)                  H0: Leadership has no impact on the development of Psychological Capital of employees.

 

Leadership

 

Psychological Capital

 

0.204

 

Regression

 

Accept

2)                  H0: Work Climate has no impact on the development of Psychological Capital of employees.

 

Work Climate

 

Psychological Capital

 

0.010

 

Regression

 

Reject

3)                  H0: Job Content has no impact on the development of Psychological Capital of employees.

 

Job Content

 

Psychological Capital

 

0.211

 

Regression

 

Accept

Table 2A


 

 

Table 2B

Hypothesis

Variable 1

 Variable 2

P value

Test Statistics

Result

1)                  H0: There is no significant association between Leadership and Work Climate.

 

Leadership

 

Work Climate

 

0.000

 

Correlation

 

Reject

2)                  H0: There is no significant association between Leadership and Job Content.

 

Leadership

 

Job Content

 

0.000

 

Correlation

 

Reject

3)                  H0: There is no significant association between Work Climate and Job Content.

 

Work Climate

 

Job Content

 

 

0.000

 

Correlation

 

Reject


Discussions

This study aimed to understand that whether leadership, work climate and job content are having an impact on PsyCap of employees. This study has also looked upon the relation of leadership, work climate and job content amongst each other. According to the responses, the leadership trait and the job content of the respondents found out to be less contributing to the PsyCap of employees. For the respondents work climate has found out to be of greater importance in development of their PsyCap. The results are not in counterpart with some past done research. It could be concluded that majority of respondents are emphasizing on work climate as a major contributor for the development of PsyCap. Employees are aware of their leadership behavior but do not see any of its much effect on development of their PsyCap. Job Content, for many is satisfiable but again it is not contributing as much as work climate does.

It aims to provide suggestion to the organization for betterment of an employee which will eventually cause organization’s overall performance to improve, where the work climate contributes majorly. This study helped the researcher to really address the major developmental aspect of PsyCap. PsyCap can be developed and can cause performance to improve. Thus, by this study it states that work climate develops PsyCap of an employee to achieve effective organizational performance. 

Conclusion

A survey of employees was conducted to know the developmental aspects of PsyCap, whether leadership, work climate and job content contribute to the development of PsyCap. And, are they correlated to each other? It was found that Leadership and job content are not having impact in the development of PsyCap of an employee, whereas work climate is impacting PsyCap. In other words, work climate of an organization is contributing in the development of PsyCap of employees. Another objective of the study was to understand the inter relation of all the three variables, leadership, work climate and job content. And it can be said that there is an association between all the three variables. The aim of this study also included knowing the development of PsyCap for all gender and age groups, as a necessity. It was seen that there is a need for development of PsyCap of employees among gender at any age groups.

Here, the researcher has laid emphasis on the understanding of the role of climate in organizational functioning, “with the increasing complexity of the business world, uncertainty in markets, as well as in employees’ attitudes, it is timely for employers to invest in PsyCap development, it will be easier for lower-level organizational members to follow suit when the organizational leaders will be able to master and exhibit positive psychological capacities”. Future research can focus on investment in PsyCap development.

 

 

 

 

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