What Is Psychological Capital?

Combined, these resources represent your HERO – your overall psychological capital.

From "Psychological Capital" by Fred Luthans, Carolyn M. Youssef, and Bruce J. Avolio. Published by Oxford University Press, 2006. Reproduced with permission.

The Benefits of Psychological Capital

Well-developed PsyCap is reported to have benefits for both individuals and organizations.

Research shows that people with greater PsyCap typically enjoy higher levels of job satisfaction, commitment, and overall wellbeing. [2]

A 2015 study by Muhammad Abbas and Usman Raja found that, along with reducing stress levels, higher levels of PsyCap can be linked to better job performance. Test subjects with higher PsyCap were more likely to generate and test new ideas and approaches. [3]

For organizations, research has consistently demonstrated that higher psychological capital is good for the bottom line. This follows from having a more engaged, innovative and healthy workforce. [4]

How to Be a HERO

Many studies clearly demonstrate the benefits of PsyCap, so how do you improve your own psychological capital?

We each have some degree of PsyCap already, but we're likely to be strong in some of the four HERO areas, and weaker in others.

Fortunately, it's possible to develop in each of the four HERO areas.

1. Hone Your Hope

Hope is about seeing a worthwhile future before you. To build up your sense of hopefulness, set yourself well-defined goals – this will increase your sense of purpose and give you something to strive toward.

Prepare yourself to tackle potential obstacles and difficult decisions. Making sure you have robust contingency plans in place can also help you to sustain feelings of hope.

2. Elevate Your Efficacy

Push yourself beyond your comfort zone. Setting stretch goals is a great way to do this and to give your self-belief a boost.

Other ways to improve your self-efficacy include finding a role model or mentor to emulate (if they can do it, so can you!) and seeking opportunities to learn and master new skills.

Also, remember to recognize and celebrate what you have achieved. Once you start to overcome challenges, recognize your strengths, or grow your expertise, you'll realize just how capable you truly are.

3. Rally Your Resilience

Resilience is arguably one of the most important elements to develop, as it can offset weaknesses in the other three HERO areas. Situations may seem challenging if hope, efficacy and optimism are low, but with resilience, you'll be able to bounce back from them regardless.

There are many ways to develop your resilience. A useful exercise is to list all the resources that you have available to you. These could be internal resources, such as your determination, or external resources, such as an effective support network or financial stability.

Take the time to find a "silver lining" in negative situations. This will enable you to move forward and recover from setbacks more quickly. For example, if you're unsuccessful at a job interview, you could make the decision to view it as a "practice round" for next time. Reframing the situation in this way can help you to cope with any problems that may arise.

Social support is essential too. Having allies at work and at home (to bounce ideas off and discuss challenges with) strengthens your resilience and resolve. Allies can help you to identify ways to reset yourself any time you stray "off course."

4. Optimize Your Optimism

Optimism often develops as a by-product of the other three elements: if you are hopeful, resilient and confident, you'll naturally become more optimistic. But there are still things that you can do to specifically work on this trait.

A good starting point is to nurture your "inner voice" by practicing positive self-talk and using affirmations.

You'll likely also benefit from identifying and developing your locus of control. People who feel more in control of their lives typically feel most optimistic.

Mindfulness is yet another key skill. It's easy to get swept up in worry, stress and a "what if?" mentality. Focusing on the here and now is an effective way to sustain your new-found optimism.

How to Help Your HEROs to Thrive

As a manager, there are things that you can do to help your team members to improve their HERO traits.

Start by looking at your organizational culture. A supportive working environment helps to build, support and sustain your team's PsyCap.

Encourage an inclusive culture in which your people feel safe to take risks and ask questions, and where they can develop with your support and guidance. The more regularly your team experiences positive emotions, the wider the impact will be.

It's also important to address any risk factors that can negatively impact HERO traits. Tackling potential harassment, job uncertainty, isolation, and stress, for instance, can play a vital role in helping people to develop their psychological capital.

Consider providing your team with training and learning opportunities that relate to each HERO element, and look for ways to incorporate them into feedback diskussions and coaching conversations. You can work with them to develop action plans to improve their overall PsyCap.

By turning your team members into workplace HEROs, you can boost their job performance and satisfaction while improving the bottom line too!