Enhancing Employee Engagement: The Role of Positive Psychological Capital

Enhancing Employee Engagement: The Role of Positive Psychological Capital

Published 14th November 2019
Dr. Tan Kim Lim, PhD

HCLI Researcher

Published 14th November 2019

With “improving the employee experience” a top priority for many HR leaders [1], Dr. Tan Kim Lim makes the case for developing psychological capital to enhance employee engagement in the workplace.

Employee engagement is about creating the right conditions so that employees can give their best each day, stay committed to their organisation’s values and purpose, and be motivated to contribute to organisational success.

Despite our familiarity with this topic, organisations constantly find themselves with the challenge of sustaining employee engagement in workplaces. This is reflected in a recent report where the level of employee engagement for Singapore is at 72%, which is one of the lowest in the Asia Pacific region [2].

Faced with the changing nature of work and coupled with an increasingly global workforce with diverse and evolving needs, we take a closer look at the concept of positive psychological capital and use this to identify four practical approaches to sustaining employee engagement.

What is Positive Psychological Capital?

Over the last decade, studies on human capital have shifted focus from interpersonal to intrapersonal [3] development (refer Fig 1.). This began when researchers started examining the characteristics and traits of human capital to determine “full potential”. Among the different traits, four stood out: hope, efficacy, resilience, and optimism. Collectively, these H.E.R.O. traits are known as psychological capital.

How Positive Psychological Capital can Improve Employee Engagement

Evolving from the concepts of economic, human, and social capital, psychological capital, has been linked to both work and life satisfaction. While every component has its characteristics and interventions, empirical studies discovered that the concept of psychological capital is greater than the sum of its parts [4].

Economic capital to human capital to social capital to positive psychological capital
Figure 1. Evolution of Positive Psychological Capital [4]

Hope is a “positive motivational state” that is based on the interactively of two aspects.  The first aspect is that you must be goal-oriented or have a goal in mind.  The second aspect is that you must be proactively making plans to achieve those goals [5].  This means that hope is not about wistfully thinking that “things will turn out fine”. Instead, hope is a cognitive process that enhances one’s determination to reach a certain goal and includes the ability to plan ways to achieve that goal.

Efficacy, synonymous with confidence, is the self-belief you have in your capabilities to produce results. Such confidence shapes your cognitive, emotional and behavioral practices. The belief that you can create the desired effect is a significant incentive to act in the first place. The higher the efficacy, the harder individuals will work to achieve their goals, leading to a higher probability of success.

Confucius once said, “Our greatest glory is not in never falling, but in rising every time we fall.”

Resilience epitomises this statement by reflecting the tenacity and determination of individuals. For individuals in leadership positions, resilience plays an ever-important role as we need more of this energy to lead, to make decisions, and to be accountable. We all experience hardship and setbacks in life. But what makes us successful and strive is not defined by how often we get rejected, but how often we bounce forward and use it as a learning experience [6] [7].

Optimism has been defined as making a positive attribution about succeeding now and in the future. Aligned with the concept of ‘locus of control’, an optimist believes that they have control over the outcome of events in their lives, as opposed to external forces beyond their control. Optimists, therefore, have a high “locus of control” as they believe good things will happen to them in the future [8].

The Intrinsic Value of Positive Psychological Capital on Employee Engagement

While each dimension may seem to be standalone, empirical studies have concluded that all four aspects work together to maximise our potential [9]. Importantly, psychological capital has been found to predict employees’ engagement because people with high psychological capital maintain a joyous outlook despite the demands and challenges of their jobs. The characteristics of optimism, hope, resilience, and efficacy work together to form a virtuous cycle of building a positive self-image, which influences how employees view their work environment.

Four Approaches to Enhancing Your Team’s Psychological Capital

A unique attribute of each psychological capital dimension is its malleability and capacity to be enhanced. Below are four approaches leaders can adopt for better engagement.

Approach 1: Celebrate success

Leaders should celebrate milestones and achievements to acknowledge progress. Such actions give affirmation that the organisation focuses on growth as well as outcomes. It also sends a signal to the employees that they are on the right track.

Approach 2: Share success stories 

To build self-confidence, organisations can adopt the technique of highlighting past success stories of high-performing teams or individuals. Storytelling can be a beneficial form of communication and reinforce positive values and behaviours.

Approach 3: Learn from failures

This is a common mantra among organisations. However, in a meritocratic society like Singapore, risk tolerance can be low, and employees may be afraid to fail. Leaders can develop psychologically safe workplaces by creating cultures where employees are encouraged and be rewarded for taking intelligent risks. Work openly with teams to learn from failures and encourage adaptive behaviour.

Approach 4: Encourage teams to take ownership of their work

Taking ownership of work can improve employee engagement. “Job crafting” is one way in which employees can utilise opportunities to customise their jobs, and actively change their tasks and interactions with others at work [10]. When employees take ownership of their work, it improves their engagement as they experience a sense of value and contribution towards the organisation.

Organisations that want to stand out from the competition are taking the opportunity to attract and retain talent by focusing on their human capital. In today’s competitive climate, organisations cannot afford to neglect employee engagement. With the volatile business landscapes where rules of business are changing at break-neck speed, organisations need to increasingly focus on engaging and growing the employees. Therefore, we challenge leaders to look at the positive psychological capital of your team members and encourage the development of H.E.R.O traits, to improve the sustainability of workplace performance. 

This article is adapted from “Is meaningful work the silver bullet? Perspectives from non-profit social service organisations” authored by Dr. Tan Kim Lim, Dr. Lew Tek-Yew and Dr. Adriel Sim. It is scheduled to publish in volume 13 issue 4 of the Journal of Asia Business Studies.

^[1] Wiles, J. (2018). Gartner Top 3 Priorities for HR Leaders in 2019. Retrieved November 13, 2019. Retrieved November 13, 2019 from: https://www.gartner.com/smarterwithgartner/top-3-priorities-for-hr-in-2019/.

^[2] Mercer (2018). Singaporeans are less satisfied with their employers compared to their counterparts in Asia Pacific. Retrieved November 13, 2019  from: https://www.asean.mercer.com/.

^[3] Tan, K.L., Lew, T.Y., & Sim, A.K.S. (2019). An innovative solution to leverage meaningful work to attract, retain and manage generation Y employees in Singapore’s hotel industry. Worldwide Hospitality and Tourism Themes, 11(2), 204-216.

^[4] Luthans, F. & Youssef-Morgan, C.M. (2017) Psychological capital: An evidence-based positive approach. Annual Review of Organizational Psychology and Organizational Behavior, 4, 17.1-17.28.

^[5] Snyder, C.R. (2002). Hope theory : Rainbows in the mind. Psychological Inquiry, 13(4), 249-275.

^[6] Liu, J.J.W., Reed, M. & Girad, T.A. (2017). Advancing resilience: An integrative, multi-system model of resilience. Personality and Individual Differences, 111, 111-118.

^[7] HCLI (2019). Endure to recharge: The art of resilient leadership. Retrieved November 13, 2019, from https://hcli.org/

^[8] Bernardo, A.B.I. (2010). Extending hope theory: Internal and external locus of trait hope. Personality and Individual Differences, 49(8), 944-949.

^[9] Grover, S.L., Teo, S.T.T., Pick, D., Roche, M & Newton, C.J., (2010). Psychological capital as a personal resource in the JD-R model. Personnel Review, 47(4), 968-984.

^[10] Bakker, A.B. (2018) Job crafting among health care professionals: The role of work engagement. Journal of  Nursing Management, 26(3), 321-331.


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