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Awaken the H.E.R.O in your Employees: Leveraging Psychological Capital

Updated: Dec 16, 2021

Capital is the blood flow of the organization. Capital in business is mostly associated with physical/tangible assets. Come to think of it, Google is not Google because of its logo. What makes Google, “The Company” is its employees. The value of any organization is in its employees. This brings us to the concept of human capital.

“Psychological Capital” is an extension of Human Capital

Psychological Capital a term coined by Fred Luthans, is a construct that can help in handling the human capital issues. It states that along with focusing on educational development, organisations should invest in psychological development of their employees. It comprises four dimensions; HOPE, SELF-EFFICACY, RESILIENCE & OPTIMISM. Each dimension has been linked with overall workplace attitudes, performance, work happiness/engagement, organizational commitment and organizational citizenship behaviour. It is also considered as an important factor for leadership development and influence. In order to have a long-term competitive advantage, organizations should build tacit knowledge of the employees.

It is important to note that investing in each dimension has its own benefits however developing all four will lead to better results since the sum of all dimensions is greater than its parts.


According to Synder, Hope consists of an employee’s ‘will power’, their determination to achieve their goals and ‘way power’, the ability to formulate multiple plans while facing hindrance in order to achieve the goal. Way power helps the employee to deliver the task successfully and it is hoped that enables way to power. A 2007 research found that hope had a positive effect on employee satisfaction, organizational commitment and work engagement. Employees can enhance their wellbeing by developing hope.

In order to develop hope amongst their employees, managers can promote Cognitive Maps, wherein the employees can be guided to develop a mental movie of how they plan on reaching their desired goal. This will clear the ambiguity, make the goals specific, measurable and relevant. A complex goal should also ideally be broken into bite-sized portions. For hope to prevail it is essential that the employee perceive them as attainable.


Every employee in the organization will face different challenges. They have to examine what needs to be done (outcome expectancy) and then examine their own capability for doing what is required. (efficacy expectancy). Their perception about their ability to gather motivation, resources and course of action in order to face the challenge is termed as self-efficacy.  Bandura explains self-efficacy as, “people’s belief about their capabilities to produce efforts.” To get started the employee should first believe that he can produce the desired outcome.

Employees with high levels of self-efficacy perceive challenges as accomplishable if given sufficient competencies and efforts. A 2007 research  revealed that self- efficacy is related to socialization and retention of new employees. It also has a mediating effect on occupational stress, burnout and engagement. The good news is that employee self-efficacy can be developed!

When employees start to doubt themselves, managers can help them traverse their past journey where they have experienced success. Past success reinstates the belief and enhances the levels of self-efficacy.  Managers themselves can be a role model.

When employees have seen their manager overcome an obstacle, they are inspired to believe that they too can come out of this. Especially if the employee sees himself as sharing some similarities with the manager, self-efficacy rises. When an employee will face an obstacle it is highly possible for him to experience fatigue, fear as well as resistance. However, if the manager discusses these psychological responses, it can help the employee view the same reactions from a different lens. This can increase the levels of self-efficacy and lead to enhanced performance.


A 2008 survey by Optum  found out that among 800,000 employees, half of the employees in India suffer from stress. Another survey, conducted by, showed that the proportion of workers at high risk of suicide due to unmanaged stress has grown to 8% of all counselling cases in 2018 from 2-4% two years ago. Millennials especially are at a high risk of experiencing stress. Data shows that there is a need to manage the work stress experienced by the employees.

However, stress cannot be avoided completely in any high performing environment. In such a scenario, resilience comes to rescue. Rutter defined resilience as an employee’s ability to manipulate their environment successfully in order to protect them from negative or adverse consequences. Luthans extended this definition and added the ability to “bounce-back” from such events. Thus, employees who are resilient have the coping resources that help them move on in life after experiencing a stressful event. Saugata Gupta the managing director at Marico said, “There is so much uncertainty and ambiguity in the environment that it leads to stress. It is the job of the leaders to ensure that they learn to absorb the stress and not pass it on to employees”

Managers can encourage their employees to face reality rather than asking them to stay positive. Thinking positive leads to the expectation of a positive outcome and if such an outcome is not seen it exhausts the energy resources. Seligman’s PERMA model could be used by the managers to help the employee find meaning even while they are enduring hardships.


While Resilience talks about bouncing back after experiencing a stressful event, optimism enables the employee to persist in the face of obstacles. An optimistic employee is able to assess their external, temporary circumstances.  “Live life as if everything is rigged in your favour” this quote by Rumi, explains the mindset of an optimistic employee. Now, this doesn’t mean just making an assumption baselessly.  Instead it means appreciating the moment and viewing the future as a source of opportunity. Managers can help their employees learn and develop optimism. Reframing their situation from a positive lens. Promoting the right question is necessary. Rather than answering their “WHY’s” (Why am I going through this?)  employees can work on finding an answer to “WHAT” (What is it that I should be learning?)

Leveraging Psychological Capital can result in a responsive, agile and empowered workforce.

Luthans and Youssef in 2017 found out that Gamification can be employed in order to include all the four dimensions of PsyCap.

At BHyve, we help employ the PsyCap Techniques backed by gamified principles to enhance the employee’s engagement, commitment and well-being. To know more connect with us at


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