Archive for psychological capital

A Walk Down Memory Lane: Or Why I Love Positive Psychology

Sunshine Yellow Flower

My students in the Working with Emotional Intelligence class at Southern Oregon University recently presented on an emotional intelligence (EI) topic they wanted to know more about. I was delighted at the number who picked a positive psychology topic. That’s what I chose four years ago when I took an EI class as part of my Master in Management program. That got me thinking back …

Here’s how my thesis began: Previous business bestsellers (e.g., One Minute Manager, Who Moved My Cheese, 7 Habits of Highly Effective People) may have offered good advice, and while much of this advice is intuitive, it was not based on research.


Research has demonstrated that specific psychological states contribute to an organization’s success. Developed by Fred Luthans, the premise of Psychological Capital (or PsyCap) is that a company can enhance its leadership, employee development and performance by developing four psychological states in its employees: hope, confidence [efficacy], optimism and resiliency. PsyCap is something that can be cultivated and can have a profound effect on an organization’s bottom line (Luthans, Avolio, Avey & Norman, 2007).

PsyCap is an individual’s positive state of psychological development characterized by the four constructs of:

  1. Hope: persevering toward goals and making adjustments along the way to succeed
  2. Confidence [efficacy]: taking on and putting in the necessary effort to succeed at challenging tasks
  3. Optimism: feeling positive about succeeding now and in the future
  4. Resiliency: the ability to sustain and bounce back from problems and adversity to attain success (Avey, Luthans, Smith & Palmer, 2010)

PsyCap is made up of the combination of all four states because together they can predict performance outcomes more accurately than any single one (Avey, et al., 2010).


Through his research, Luthans confirmed that these states can be learned and the outcomes measured. He worked with a well-known Silicon Valley high-tech firm, where 75 engineering managers participated in PsyCap training. After subtracting the cost of the training and the engineers’ time, the calculated return on investment was 270% (Hope, Optimism and Other Business Assets, 2007).

Increasing Your PsyCap

I appreciate my students pointing me back to my PsyCap roots, and I love that I am able to use this research to help people and organizations around the Rogue Valley and beyond. If your organization would benefit from greater PsyCap, give me a call at 541.601.0114. Let’s see how successful you can be!


Avey, J., Luthans, F., Smith, R., & Palmer, N. (2010). Impact of positive psychological capital on employee well-being over time. Journal of Occupational Health Psychology, 15(1), 17–28. doi:10.1037/a0016998.

Hope, optimism, and other business assets: Q&A with Fred Luthans. (2007, January 11). Gallup Management Journal. Retrieved from

Luthans, F., Avolio, B.J., Avey, J.B., & Norman, S.M. (2007, Autumn). Positive psychological capital: measurement and relationship with performance and satisfaction. Personnel Psychology, 60(3), 541–572. doi:10.1111/j.1744-6570.2007.00083.x.

Cash in on Happiness

Cash in on Happiness
A lack of ethics and fairness in the workplace results in unhappy employees, who in turn become unproductive, lack creativity, and miss more days from work.  Happy employees work “more discretionary hours, take less sick leave, and stay longer in their jobs” (Pryce-Jones, 2010, p. 20). These findings are substantiated within the fields of psychology, neuroscience, and management (Achor, 2010).

Happy employees affect their colleagues and have an especially big impact on their followers (Achor, 2010; Luthans, Youssef, & Avolio, 2007; Pryce-Jones, 2010).  Repeated studies by Dr. Fred Luthans (and others) have demonstrated that leaders who have hope, efficacy, resiliency and optimism exhibit a contagion effect on those who report to them.  In a study on a high-tech manufacturing firm, 74 engineering managers received a 2.5-hour mini-intervention designed to increase manager hope, efficacy, resiliency and optimism.  After factoring in time away from the job for participation in the training, company overhead, and training costs, the return on investment was 270% (Luthans et al., p. 225).

The psychological capital and happiness at work concepts are recent phenomena, with their roots dating back to 2002. Research has substantiated their effectiveness in fields as diverse as engineering, law enforcement, insurance sales and manufacturing. The potential applications for other fields are endless, including (medical) helping professions, teaching, and athletics. In my view, increasing employee psychological capital and happiness at work will be critical for businesses wishing to have a competitive advantage in today’s global climate.



Achor, S. (2010). The Happiness advantage: Seven principles of positive psychology that fuel success and performance at work. New York, NY: Random House, Inc.

Luthans, F., Youssef, C., & Avolio, B. (2007). Psychological capital: Developing the human competitive edge. New York, NY: Oxford University Press.

Pryce-Jones, J. (2010). Happiness at work: Maximing your psychological captial for success. West Sussex, England: Wiley-Blackwell.