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How to Use Psychological Capital to Improve Work Performance

Psychological Capital (or PsyCap) has been floating around the academic spheres of the business world for a decade. Positive PsyCap aims to build innovative workplaces by encouraging employees for the sake of their own personal improvement. PsyCap relies on the four pillars of Hope, Self-Efficiency, Optimism, and Resilience to develop strong teamwork and problem-solving in the workplace.

What is Psychological Capital, and How Can It Improve Work Performance?

The theory of Psychological Capital (PsyCap) has been making waves in the academic circles of management theory for the last decade. As studies grow proving the success of PsyCap in workspaces, this positive psychological theory is poised to make waves in the business world when it comes to the relationship between supervisors and workers.

PsyCap brings together the positive resources of hope, resilience, optimism, and self-efficacy, in order to empower a workforce to embrace personal and professional growth. These positive states aim at building innovative and goal-oriented workplaces by encouraging employees toward high performance for the sake of their own personal development. Empowered workers are better able to come up with creative solutions and increase the overall value of the workplace.


Studies have shown that workplaces where the management has actively sought to encourage positive psychological states among its workers are more productive. The pillars of PsyCap can enhance management, training practices, individual personal life, and the overall mindset of entrepreneurs who need their determination to succeed. It has been widely adapted by life-coaches and is a valuable tool for managers and management consultants.

Where does it Come From?

PsyCap developed from positive psychological studies. Positive psychology seeks to strengthen existing traits. This is opposed to negative psychology which punishes or attempts to correct weaknesses and mistakes as they arise. While a balance of both training methods is ideal for developing adaptable and self-sufficient workers, many workplaces forget to empower their employees into reach positive psychological states.

Motivational training, as emblemized by motivational posters in the workplace, often attempt to develop positive mental states in workers, but much of this training only targets one or two of the four psychological resources that make up PsyCap.

Some individuals will seem to have natural PsyCap by manifesting positive psychological traits. These traits are often viewed in the workplace as a person’s social or emotional maturity. However, anyone can learn to use positive psychological states, even someone with often negative psychological traits. These positive states are powerful mental tools to carry individuals through difficult processes.


Four Pillars of PsyCap


Hope, as a psychological state, refers to the sense of success that someone receives from achieving goals and exercising personal agency. Someone with hope works because they want to accomplish goals, not because they feel trapped or forced to. Feeling a sense of agency gives an individual the willpower or determination to pursue their goals.

Hope is different from optimism because it has an internal focus. This means that it is less motivated by external things such as positive reinforcement or criticism.

Suggestions for increasing hope in the workplace:

  • Prioritize the setting of realistic but challenging goals.
  • Since hope develops from social support, relying on others when one’s resources are low can help to develop a sense of hope.


Self-efficacy refers to a person’s confidence in his or her abilities. This is a state that measures conviction and motivation. Efficacy is extremely important for performance in life and in the workplace. Most people derive self-efficacy from experiencing success or mastery, learning from others, positive feedback, and personal interest in a goal.

Those without self-efficacy are more prone to failure, despair, and losing confidence, when faced with negative feedback, social disapproval, set-backs, or self-created challenges such as self-doubt or skepticism. A person’s self-efficacy, or their sense of personal capability, is their armor against negative thinking and it helps them develop resilience.

Suggestions for increasing efficacy in the workplace:

  • Proper training is extremely important to efficacy, because it ensures that individuals are confident in their skills to complete a goal.
  • Acknowledging and congratulating successes encourages a sense of self-confidence.
  • With every increased responsibility an employee accumulates within a workplace, new and personable training is needed to develop Efficacy and Resiliency.


An individual’s resilience determines their ability to rebound from adversity, conflict, and failure. For some, resiliency refers to an individual’s ability to cope with internal and self-directed criticism. A person’s resilience also refers to their ability to recover from positive events, including progress and increased responsibility. Resilience speaks to an individual’s ability for adapting to new circumstances and operating under difficult social pressures.

Resilience is often a cultural factor, so that some people will have different levels of resilience than others, depending on the way that they were brought and their temperament. Studies show that individuals from cultures that have gone through political upheaval, or individuals who have endured high levels of personal upheaval, approach their jobs with high levels of resilience. Even those with low levels of resilience can develop this state through perseverance.

Suggestions for increasing resiliency in the workplace:

  • Understanding that even when individuals struggle through tasks, they are not always failing. Have confidence in a worker who is struggling through a task until it is complete.
  • Encourage individuals to persevere through difficult or highly criticized tasks whenever possible.


Optimism is a kind of thinking that explains positive events as personal successes which come from permanent and replicable causes. On the flip-side, the optimistic state of mind considers negative events to come from sources that are outside of the control and temporary. If a failure happens, it is because of a specific instance and is not a rule.

Optimists expect good things to happen. Having this outlook can charge the other three positive states, making it easier to attain positive PsyCap.

Suggestions for increasing optimism in the workplace:

  • Optimism can be infectious, so if you want others to have an optimistic attitude, you must adopt it yourself. Encourage your team to imagine things going right.
  • Clear planning for tasks and research on possible outcomes can help a team to think optimistically. Plans make it easier to foresee possible outcomes and prepare for the future.

All four positive psychological states encourage a sense of individual control over situations and agency that dynamic, creative, and problem-solving workplaces all share. They also support goal-based perspectives which thrive off motivated activity and allow participants a sense of satisfaction upon accomplishment.

To encourage PsyCap is to encouraging a positive workplace that recognizes the strength and value of each worker. PsyCap in the workplace helps to increase interpersonal cohesion between coworkers, managers, and supervisors, while increasing a team’s potential competitive advantage, allowing it greater opportunities to grow and expand.

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Rebecca Moses
Staff Writer: Rebecca Moses is a creative writer who can't keep from meddling in the real world. While living in Colorado, she developed a particular interest in small business production. She loves a writing challenge, dabbles in illustration, and reads to figure out how all things work and grow. Find her at RebeccaMosesWriting.com

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Entrepreneurial Lifestyle · Find Your Way · Grow Your Business · Leading Your Team · Productivity · Your Mindset

Staff Writer: Rebecca Moses is a creative writer who can't keep from meddling in the real world. While living in Colorado, she developed a particular interest in small business production. She loves a writing challenge, dabbles in illustration, and reads to figure out how all things work and grow. Find her at RebeccaMosesWriting.com

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