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BLPCM1 : Psychological Capital And Organizational Performance

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BLPCM1 : Psychological Capital And Organizational Performance

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BLPCM1 : Psychological Capital And Organizational Performance

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Course Code: BLPCM1
University: University Of Cambridge

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Country: United Kingdom


Pick a topic below and write a well-referenced literature review in response. You are expected to use the academic literature to support a well-constructed argument. This assignment must be submitted through the Turnitin link for this assignment.
1. What is the relationship between authentic leadership, Leader-Member Exchange (LMX) and employees’ Psychological Capital (PsyCap)? Critically review the literature that explains how to build the Psychological Capital of different types of employees (such as professionals versus administrative employees, emotional labour, blue collar versus white collar employees, different generational cohort, and/or different ethnicities)? Why do emotions (of for example leaders, managers, employees) significantly impact employees’ performance?
2. Analyse the leadership and/or employee performance (such as their engagement, turnover, commitment, wellbeing) at your workplace and compare it with the positive leadership and Psychological Capital literature.  How similar or different is your workplace from what is potentially possible as per recent research studies? Please consider different types of employees (such as professionals versus administrative employees, emotional labour, blue collar versus white collar employees, different generational cohorts, and/or different ethnicities). Use the positive leadership and/or Psychological Capital literature to suggest how to move your workplace towards being more effective?


In management, human resource forms a significant part in the success of any organization. For this reason, there is a need to come up with appropriate ways of improving this workforce. Organizations can employ several approaches to enhance employees’ performance in the workplace. Such approaches include; authentic leadership, leader-member exchange (LMX) and psychological capital. This paper seeks to compare authentic leadership, LMX, and psychological capital, elaborate the means of building PsyCap in employees, as well as evaluating the impact of emotion on professionals’ performance.
Comparison of approaches to leadership
Authentic leadership
Authentic leadership refers to a method to administration where the leaders’ legitimacy is kept through maintaining an honest relationship with the followers by valuing their efforts which are built on the ethical foundation (Leroy et al., 2015). The leader is positive individuals who are self-aware. They recognize their strength, weaknesses, and emotions and their impact on their leadership. They show their followers their true .personality and do not pretend to show a faked image in public which is not their trait. Therefore their mistakes do not bring them to fear that the other people will view them as weak but accept that self-actualization cannot be sufficiently achieved but is a continuous endeavor. Organizational goals and mission drive them, and this makes them results-oriented people. They consider the goals of an organization as more critical than their self-interest. To achieve this, they work together with the employees in a cooperative manner and using the appropriate communication skills. Finally, they are persistent and generally focus on the long-term and do not only concentrate on achieving short-term objectives.
LMX Model
Leader-member exchange is a theory which has its basis in a two-way relationship between a leader and his or her followers – dyadic relationship (Harris & Kirkman, 2014). It is a widely accepted and used leadership approach and involves a leader developing an exchange with every employee under him. The quality of this relationship profoundly influences employees’ response to their work, decisions, ordinarily emotional and understand one another not only in their place of work but even beyond (Read & Laschinger, 2015). Leader-member exchange approach promotes positive employment experiences and may result in the success of an organization. The theory aims at explaining the effects of leadership on employees and the organization as a whole. It suggests that leaders develop strong trust and respectful relationship with some of the employees in the business. This result in a leader not having a typical relationship with all the workers and their output relate to how the leader treats them. It is right to say that citizenship behavior positively refers to leader-member exchange in that, the actions of the two advocate, correlate and are useful to the organization.
Psychological capital
Psychological Capital is defined as ones positive psychological state of development that involves having four characteristics such as self-efficacy, optimism, resilience and hope (Badran &Youssef-Morgan, 2015). It concerns favorable situations where challenges are dealt with, expectations are determined, individuals are motivated, and accomplishments are achieved in the face of many odds. Neuroplasticity is an area where the concept of Psychological Capital proves to be relevant and can be developed and managed. Initially, the idea was designed for organizations, but presently it is applied in all field of leadership. Fred Luthans, a pioneer of the theory, suggested that organizations require investing on the psychological development of employees to gain competitive advantage and to beat the competitors. According to Fred Luthans and Youssef-Morgan, strengths, excellence and thriving in humans still are leverage to explore into in mostly uncharted territories. Employees who are working in a friendly environment strive at work and are regarded to be satisfied in his life. In this case, those factors help in improving the wellbeing of an individual should be encouraged and enhanced for instance those that concern is growing one’s health status.
These theories are concerned with improving human capital and promoting employees’ welfare which enables individuals and organizations to achieve their goals. They, therefore, strive to shape the leadership to lead the team of employees in a manner that does not lead to the conflict by the parties involved (Hirst et al., 2016). They agree on the need to develop a good relationship and sharing of information with the employees by the management. An effective leader should also work to minimize his shortcoming from affecting the employees whom they lead that have detrimental effects on the organization’s performance.
Ways of building PsyCap in Workforce
Human resource development is a continuous process of trying to improve the quality of employees by particularly inspiring positive organizational behavior.  The best four order positive psychological resources that form part in psychological capital (PsyCap) are hope, efficacy, resilience, and optimism abbreviated as HERO (Peterson & Hannah, 2014). These factors meet the qualifying criteria of research-based theories that are positive, valid and have implications for well-being, behavior, and performance of employees.  PsyCap has scientific, evidence-based rigor as well as relevance in practice. In the present day running of the organization, turbulence has become a collective experience between the management and the employees. These occurrences necessitate further research on human capital development to give guidelines on how to curb the issues. PsyCap is the way to go as it yields rich information when carefully undertaken and all aspect of employees’ life and signs of progress are highlighted.
Approaches to developing psychological capital
In developing human capital through PsyCap, Kwok et al. (2015) suggest four positive approaches that suit the positive organizational scholarship framework. The first step is to adopt a unique lens that changes the interpretation of the characteristics which may or may not be desirable. Secondly, the approach is comprised of positive outcomes that are extraordinary which are framed regarding positive deviance rather than negative deviance. The positive deviance is therefore exemplified at the personal level to spur positive performance.  Thirdly, an approach incorporates positive bias which put more weight on positive than negative psychological construct, dynamics, and outcomes. The fourth and the last approach emphasizes on the need to understand the best human attributes that include flourishing, performance at one’s peak, thriving, excellence, virtuousness, compassion among other positive life promising dynamics (Choi & Seibert, 2018). The positivity emphasized is geared towards making an individual better and rather not necessarily to attract so many other benefits. Negativity contributes to the use of excess resources as its result to the urgent needs that require attention and resolutions. Positive Organizational behavior is a subset of Positive Organization Scholarship that deals with the study and application of desirable human resources and measurable psychological constructs and can be managed effectively to improve on performance in daily business activities.
PsyCap capabilities
The four construct given as hope, efficacy, resilience, and optimism have a common trait of portraying a sense of control, intentionality and a drive for goal pursuit. Their theme is to appraise the circumstances positively and ensure probable success achieved through possession of motivated effort and hard work. The optimistic individual maintains a positive mind of expecting a fortune and having high efficacy will allow him to choose those challenging goals and be motivated to work towards achieving them (Roche et al., 2014). Hopeful individuals are likely to be led to try multiple pathways to achieve the set goals, and the resilience will aid in the recovery from common setbacks that face individuals and that are stumbling block in a try to achieve the goals.
However, the first order psychological resources of resilience, hope, optimism, and efficacy have specific characteristics that have discriminant validity. Optimism is ordinarily reactive and usually happens after a positive or negative experience has been faced (Martin et al. 2016). On the other hand hope, efficacy and favorable view of optimism are more proactive naturally. Beyond conception distinction, discriminant validity of these construct has been empirically established in additional analysis apart from the PsyCap analysis.
Leadership development is significant for global and corporate competitiveness and sustainability. The organization can be graded regarding the quality of its management, behavioral skills as well as areas of knowledge needed by the organization. Also, the focus needs to be placed on the critical roles of psychological resources boosted by self-regulation techniques. Leaders, therefore, need to develop and expand their psychological capital and cultivate positive psychological resources (Goldsmith et al., 2018) All leadership journeys encounter challenges that affect the performance and by employing psychological resources, one can develop positive mental and psychological mind to deal with demands of the changing environment.
Psychological capital assists the employees to be better off emotionally and to be in a better position to support their colleagues that aid in improving inter-personal exchanges. It enables individuals to solve their complex challenges, create new paradigms and give solutions to the ever-evolving conditions. The leader ought to exhibit a formidable ability to engage in a comprehensive perspective to create a conducive working environment that is essential for the success in the workplace (Baron & Hmieleski, 2016). Thus, a leader needs a capacity to set a tone and set an excellent example for others to emulate. Nevertheless, psychological resources empower leaders to respond effectively to constant demand and pressure from the employees. He owns a responsibility and authority that are regulated by the capacity of his knowledge and skills gained through experience.
Educators believe that by participating in a leadership development program associated with increasing psychological capital, individuals become better leaders. Their inner resources and behaviors recalibrated to make him or her an active leader. To build efficiency opportunities are provided for learning the new skills and practicing them in an environment where support is given. This is likely to build others ability to respond to tough situations.
Building resilience in employees
Resilience is one of the aspects which for many years, researchers and scholars have thought it to be an intrinsic trait. Besides, recent studies show that resilience is a state in which individuals can gradually develop over time. A survey carried out by clinical officers on mothers and children who have schizophrenia showed that some children who experienced this disability were traumatized and failed to pull themselves out of it (Bouckenooghe & Raja, 2015). However, some psychologically struggled with their disorder and eventually lived healthy lives after that. It is, therefore, possible to develop resilience where it did not exist and propagate it where only a little thrived. The following are some of how organizations can build resilience in their professionals.
First of all, organizations can make use of positive emotions. Most organizations often focus on the negative deeds of their employers and severally criticize them for their failures and forget to acknowledge them of their successful activities in their profession. This act demotivates employees and slowly kills their resilience. To curb this existing behavioral trait, managers and top authorities should have positive emotions towards their employees. For example, a manager can acknowledge the efforts of an employee and motivate him or her to do even better in his or her failed expectations. With this positive emotions, such an employee will eventually bounce back and regain normalcy in their work positions.
Strategies of building resilience
Additionally, organizations should come up with proactive approaches to build resilience. Research shows that annually, employees may shift to more than ten job opportunities. Traumatic events in the workplace sometimes cause some of these shifts. Organizations should, therefore, come up with strategies to build resilience and thus make them persevere adverse challenges in their professions. Below are some of the policies that can be put into use.
Risk-focused strategy.
This strategy aims at analyzing and anticipating the risks that may occur in an organization and particularly those which can lower professionals’ resilience and therefore reduce chances of such risks to occur. Researchers have found out that individuals often find support from social organizations such as families and friends when they face traumatic events (Dawkins et al., 2015). The idea can also be applied in human resource development in organizations. For example, companies can build a strong organizational culture to deal with risks that lower professionals’ resilience such as sexual harassment, misconduct among employees, among many others. Although it is not possible to anticipate what may happen in the internal and external environment, an influential organization culture can deter such risks from occurring.
Asset-focused strategy
This strategy aims at developing the employees as assets of the company. Organizations can acquire human capital through training employees). This way, employees gain more knowledge and skills in their professions and therefore avoid failures in the workplace. This is likely to improve their resilience. Additionally, companies can ask to provide grants to those who want to further their studies and promote those who show outstanding performance in their workplace. As Luthans et al. (2014) point out, teachers improve their resilience when promoted to higher education levels.
Suggested ways of building hope, optimism and self- efficacy
Hope is another psychological capital capability that organizations should aim at developing. Hope is generally the idea of having positive expectations to particular goals and objectives. Organizations can build hope in their employees by organizing motivational talks and encouraging their professionals always work hard for the benefit of their organization. Optimism, on the other hand, can be built by rewarding workers upon achievement of some specific organizational goals through salary increase, promotion, offering incentives among many different ways.  Self -efficacy refers to self-confidence. This can easily be achieved by assigning professionals specific tasks, embarking on them and trusting the quality of work they offer. Involving such professionals in decision making makes them believe there are crucial in the operations of the organization and hence built self-efficacy on them.
Effects of emotions on employees’ performance
Human emotions can be categorized into two broad divisions. These are negative and positive emotions (Zhun et al., 2018). Negative emotions impact negatively on the performance of employees whereas positive emotions have positive implications that are crucial in enhancing employees output (Chadi & Mertins, 2016). The positive emotions help in the achievement of any organizations goals. Employees are human beings, and like others, their behaviors affect their emotions and those of others. Their emotions and temperament affect their job performance, decision making, and management output. Anger often leads to aggression towards other employees and management and these always result in sadness which may lead to job dissatisfaction. Emotion is a brief episode of synchronized dynamics in mind, and that is physical in the body (Kunze, F. and Menges 2017). They directly affect an employee’s performance. The impacts may be on one’s health emergencies and moods. It is therefore imperative to treat negative emotions as a disease in the modern workplace. On the other hand, motivation help in improving the employees’ performance and can be done through salary increment and recognition of one’s effort.
Conclusively, human resource development is an essential discipline in management that plays a crucial role in improving the employees’ performance and the relationship with the management. There is hence a need to take relevant measures to ensure that leadership is appropriate to the conditions of employees and hence employees need to be considered as the main component in the achievement of the organization’s mission, goals, and objectives. Apart from educating the employees, and expecting experience from them in their areas of professional and administrative positions, the organization should build their psychological capital as a way of motivating and improving their performance.
Badran, M.A., and Youssef-Morgan, C.M., 2015. Psychological capital and job satisfaction in Egypt. Journal of Managerial Psychology, 30(3), pp.354-370.
Baron, R.A., and Hmieleski, K.M., 2016. Why entrepreneurs often experience low, not high, levels of stress: The joint effects of selection and psychological capital. Journal of management, 42(3), pp.742-768.
Bouckenooghe, D., and Raja, U., 2015. How ethical leadership shapes employees’ job performance: The mediating roles of goal congruence and psychological capital. Journal of Business Ethics, 129(2), pp.251-264.
Chadi, A., and Mertins, V., 2016. Loss of work meaning: experimental evidence on employees’ performance and emotions. Management Science, 63(6), pp.1696-1707.
Choi, D., and Seibert, S., 2018, July. Building a Multilevel Model of Perceived Leader-member Exchange Differentiation. In Academy of Management Proceedings (Vol. 2018, No. 1, p. 13192). Briarcliff Manor, NY 10510: Academy of Management.
Dawkins, S., and Sanderson, K., 2015. Advancing conceptualization and measurement of psychological capital as a collective construct. Human relations, 68(6), pp.925-949.
Goldsmith, A.H., Darity Jr, W. and Veum, J.R., 2018. Race, cognitive skills, psychological capital, and wages. In Leading Issues in Black Political Economy (pp. 185-198). Routledge.
Harris, T.B., and Kirkman, B.L., 2014. Leader-member exchange (LMX) in context: How LMX differentiation and LMX relational separation attenuate LMX’s influence on OCB and turnover intention. The Leadership Quarterly, 25(2), pp.314-328.
Hirst, G., Walumbwa, F., Aryee, S., Butarbutar, I. and Chen, C.J.H., 2016. A multi-level investigation of authentic leadership as an antecedent of helping behavior. Journal of Business Ethics, 139(3), pp.485-499.
Kunze, F. and Menges, J.I., 2017. Younger supervisors, older subordinates: An organizational?level study of age differences, emotions, and performance. Journal of Organizational Behavior, 38(4), pp.461-486.
Kwok, S.Y., Cheng, L. and Wong, D.F., 2015. Family emotional support, positive psychological capital and job satisfaction among Chinese white-collar workers. Journal of Happiness Studies, 16(3), pp.561-582.
Leroy, H., Anseel, F., Gardner, W.L., and Sels, L., 2015. Authentic leadership, authentic followership, essential need satisfaction, and work role performance: A cross-level study. Journal of Management, 41(6), pp.1677-1697.
Luthans, B.C., Luthans, K.W., and Avey, J.B., 2014. Bringing up future leaders: The development of academic, psychological capital. Journal of Leadership & Organizational Studies, 21(2), pp.191-199.
Martin, R., Guillaume, Y., Thomas, G., Lee, A. and Epitropaki, O., 2016. Leader-member exchange (LMX) and performance: A meta?analytic review. Personnel Psychology, 69(1), pp.67-121.
Peterson, S.J., and Hannah, S.T., 2014.  The difference between authentic leadership and job performance: The mediating role of follower positivity in extreme contexts”[The Leadership Quarterly 23 (2012) 502-506]. Leadership Quarterly, 25(6), pp.1183-1184.
Read, E.A. and Laschinger, H.K., 2015. The influence of authentic leadership and empowerment on nurses’ relational social capital, mental health and job satisfaction over the first year of practice. Journal of Advanced Nursing, 71(7), pp.1611-1623.
Roche, M., Haar, J.M. and Luthans, F., 2014. Importance of mindfulness and psychological capital on leaders. Journal of occupational health psychology, 19(4), p.476.
Wang, H., Sui, Y., Luthans, F., Wang, D., and Wu, Y., 2014. Impact of authentic leadership on performance: Role of followers’ positive psychological capital and relational processes. Journal of Organizational Behavior, 35(1), pp.5-21.
Zhun, G.O.N.G., Schooler, J.W., Yong, W.A.N.G. and Mingda, T.A.O., 2018. Study on the Comparison between Positive Emotions, Job Burnout and Psychological Capital in Enterprises’ Employees: Based on the Broaden-and-Build Theory of Positive Emotions. Canadian Social Science, 14(5), pp.42-48.

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