What is the Psychological Capital? – Detailed Guide

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psychological capital

Do you want to know what psychological capital is?

Understanding psychological capital, we have to first know about CAPITAL. In economics, we can say capital consists of assets that can enhance one’s power to perform economically advantageous work.  

We, as human beings, always heard something like human capital. 

This human capital is widespread in today’s day to day life; it means the skills, knowledge, and abilities of the humans or employee are the actual capital of humans. 

But at the same time, we never heard about psychological capital. This is one of the essential capitals that needs to take care of an employee’s performance and well-being.

So, let’s read a detailed article on how Psychological capital works?


What is the Psychological Capital?

Psychological Capital is not difficult to understand, but it is something like train our brain in such a way that with the help of some resources, we develop and improve our brains for better performance in a job or real life, and also get success in all the way. 

It is the thing which we can learn, developed or trained easily with the help of experts.

4 resources of Psychological Capital-

In psychological capital, we have to also take care of four essential resources, which are-


This looks like a very fancy term as such, but it simply means Confidence. Confidence or self-efficacy is a significant factor in difficult times. 

Problems in research that those peoples who have high self-efficacy are excellent in facing  Problems. 

Those people always motivated for whatever the task was given to them; they try to do it with lots of confidence and focus.

 If somehow, they face any failures, they dare to bounce back.

self efficacy is a positive psychological capital.

How to develop self-efficacy-

Here we have some techniques to develop Self- efficacy as a part of positive psychology capital-

Always focus and visualise your past success-

 It is a technique which you can do in your free time. Just sit in a quiet place and think about your 

past success. After doing this, you feel lots of positivity inside you.

Copy other people- 

It is the method to try to copy successful peoples who are doing great in their particular area. Try to think about how they act in a problematic scenario, how they feel. These question helps you to increase your self-efficacy.


It is also one of the core resources which shows motivation for doing things. 

In researches, it is also seen that those having high hopes try to put lots of hard work and effort into the work. 

And after putting these things, if the work is not done as planned, they tried different alternatives. But they wouldn’t stop.

How to Develop Hope- psychological capital

Here we have some techniques to develop hope as a part of positive psychology capital-

Goal setting- 

It is a fundamental aspect of every part of life; when you put a target, you always try to chase it and get the target complete.

During this, you always have hope inside your mind, which tells you that you can do it, which is ultimately our primary purpose in positive psychology.


It is also essential because hope and motivation both go hand in hand.

motivation is a necessary psychological capital

 If you see whatever the hurdles you have, if you have a 1% of hope, then automatic motivation comes and vice versa.


It is a widespread word for all, which means expectation’s for positive outcomes. Optimistic people are very clever and always try to find out different ways of completing the given task.

How to Develop Optimism-psychological capital

Developing optimism is all about changing our focus from negativity to positivity. It can be done by accepting the past, accepting the present moment, and looking for opportunities.


This is our last resource, which is like a sea. It means always bounce back spirit.

I give the example of the sea because if you closely see the sea, you know whatever the challenges come at sea like high tides, flood, pollution, etc.

It never stops; it always moves freely. This example shows how a resilient person works in their life, always bounce back spirit irrespective of challenges.

How to Develop Resilience-

Here a great Senior Editor Diane Coutu, always tell us that resilience is a combination of three things which are-

Face Reality- 

In this, Diane always tells accepts the reality, whatever the situation you have. If you neglect the case with think positive, it takes a longer time to change the situation. 

And also, your time and energy might be loose.

Search for Meaning- 

In this, he suggested trying to find what is your meaning for life. It should be more valuable and motivating, which helps you to move forward.


 It is an ability that helps us in tough times where we don’t have enough resources for a fight,

But there is hope and dedication that comes automatically, which tells us whatever we have in our hands to try to use it and bounce back.

Benefits of Psychological Capital.

As we know that this topic comes from organizational studies, so here I took examples related to the company perspective. 

We know that in the company, both employee & employer both should have excellent psychological capital.

As we also know that the employee performance directly indicates company performance. 

For this, it is always suggested that employee psychological capital be high. 

They work with high motivation, hard work, and bounce back spirit, which ultimately helps to company’s growth. 

For the company positive surroundings and culture, the employer is directly responsible. 

Due to this factor, it is essential that employers also focus on psychological capital for company wellbeing.

Positive Psychological Capital-

We all know that when we heard the term psychology, we always think about the mind or mental illness. 

But today, we come to know a different perspective of that, which is positive psychological capital. 

This type of psychology is coming into existence at the very end of the 20th century.

 Positive psychology is a state of mind where we define a person as upbeat, optimistic, or not by observing the above characteristics: Self-Efficacy, Hope, Optimism, Resilience.

hope is one of a psychological capital


Positive psychological capital is very famous amongst lots of great psychologists. 

With this curiosity, a well-known psychologist Martin Seligman, a former head of the American Psychological Association, chose positive psychology as the theme of his presidency term and did lots of research and theoretical development in this field.

Due to his hard work and long vision, there were Two new branches of positive psychology are being implemented into the industrial-organizational world, which are-

Positive organisational scholarship- originated by Kim Cameron. In this, their primary concern is to facilities positive characteristics to the organisation during a crisis.

Positive organisational behaviour (POB) – research by Luthans focuses on positive- psychological states on employee attitudes, behaviours, and performance.

Why Should Organizations Invest in People?

The idea of Psychological Capital was initially designed for organisations. 

A psychologist Pioneer Fred Luthans always tells us that organisations should focus on psychological things rather than educational entities. 

He always argued that every company could buy buildings, types of machinery, the workforce, etc. 

The only thing that creates a competitive advantage, or we would say as make a Difference, is human psychology, a trained brain, or a proper mindset.

Luthans has also proposed two types of knowledge which are explicit and tactic.

 Although, explicit knowledge consists of skill set, abilities, and the things learned from school or colleges as a part of education. 

Also, tactic knowledge, which he always focuses on and tells everyone to be the focus, comes with socialisation and the company’s surroundings.

With this idea, Luthans always suggests companies invest in human capital management rather than hiring a skilled temporary workforce.


So, here we come to the end of this article. Although, I firmly believe that I provided lots of information related to psychological capital.

But, I want to tell you that the concept of psychological capital helps us develop our well-being, life satisfaction, and motivation.

And also, we know that what are the elements is there for this, like hope, efficacy, resilience, and optimism are there. If we try to start developing any one of us in our life, 

Then it automatically changed our life with the proper mindset and made our environment much positive.

Also, you can read our blog on The Flow Psychology Model – Balancing Challenge and Skills


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