Psychological Capital

The pandemic and accompanying feelings of isolation for some have shone an even brighter light on the area of wellbeing, and for businesses it will be an area of concern. If organisations are to get a handle on employee wellbeing and make a real difference to people’s lives, like financial performance, the mental health of those within an organisation will need to be measured and managed.

Psychological capital or ‘PsyCap’ was a concept originally developed by American organisational psychologist Fred Luthans. It relates to an individual’s positive psychological functionality and is analogous to the idea of positive mental health. People (and therefore organisations) with high levels of psychological capital are likely to be high performing as well as happy and empowered.

PsyCap can be considered a subset of human capital, something which can unlock the potential of a workforce, leverage a previously untapped form of competitive advantage and therefore play a key role in enhancing an organisation’s long-term value.

Model

Researching the area with support from psychologist and wellbeing expert Dr Madoka Kumashiro at Goldsmiths, University of London, our findings suggests that there are four CORE attributes that contribute to psychological capital at an individual level:

• Confidence

• Optimism

• Resilience

• Energy

We have also identified four conditions for success:

• Purpose

• Autonomy

• Recognition

• Relatedness

These are related to the environment an organisation creates which supports the development of the four attributes. Organisations wishing to invest in driving up psychological capital in their organisations can align their investments and related action plans against each component of the 4 + 4 model.

Measurement Overview

The forward thinking inc 4 + 4 PsyCap model and analysis package allows organisations to audit and measure both the incidence of the 4 attributes across the organisation to compute an overall PsyCap score, and understand how effectively they are providing the 4 conditions for success.

Collecting both scores across the organisation regularly will enable organisations to measure the success of their investment programme / interventions and encourage a continuous improvement loop approach. The diagnostic survey data then identifies the key issue and opportunity areas which inform future action plans and investment focus.

Toolkit

Having identified issue and opportunity areas in the diagnostic survey, we then collaborate with the organisation to create a range of employee and management interventions that address under-performing areas. Alongside our charity partner Shaw Mind, we have also developed a mental health training programme tailored to the needs of the organisation.

Our hope is that this will be a first step in encouraging the effective progression of positive mental health in the workplace at a time when the problem appears to be tightening its grip on society. The solution will enable organisations to systematically improve mental health to deliver happier, positively functioning employees in tandem with enhanced performance for compound benefits.