Once John C Maxwell said that “everything rises and falls on leadership” (Maxwell, 2011). It means its leadership that determines various organisational factors such as successful psychological work environment, job security of employee, their job satisfaction, absenteeism, and employee’s intentions to quit the organisation. All factors depend on leadership efforts and if a leader fails to manage properly all these variables, it leads to organisational failure. Success of an organisation determines by the leader who leads and motivate other people of the organisation to work together to achieve the objective of the organisation. A positive and good leader can be found at any level of the organisation, not just at the top position of the organisation.
Role of a good leader not only motivate others to work, rather it helps the organisation to realize a variety of benefit, establishing goals and motivate and inspire people to achieve it, and making good strategies and plan to achieve the overall objective of the organisation. To ensure the success and to motivate other people in the organisation, it is essential for a leader to remain positive, cool, and calm in tough situations as well. A positive, ethical, and genuine leadership broadly termed as an authentic leader that helps the organisation in facing organisational challenges. Authentic leaders are always positive and trust on others motives and on their sentiments, and disclose their personal values. Such characteristic of an authentic leader helps in accurately measures the capability and ethics of leadership actions and decision-making (Norman, et. al., 2010). In other words, authentic leadership can be defined as a management style through which people act genuinely and act in the sincere way that is true who they are as individuals. The various scholars of authentic leadership say that authentic leadership is well known for positive attitudes and motivating people towards the organisational goal. However, this leadership philosophy has not always been known exactly using the term authentic leadership, as its roots trace back thousands of years.
Psychological capital or PsyCap includes several personal characteristics such as hope, confidence, optimism, or resilience etc. These components of psychological capital integrate together and lead to the self-development of an individual or lead to their psychological state of development and are characterized by four points. (1) Self-confidence to complete the challenging job (2) Positive optimism about succeeding in future and ever when they perform the job (3) Positive hope towards future goals and connect the path to the final goals (4) Resilience to face the problem and remain cool and calm in tough situations as well and attain success (Joo, Lim, and Kim, 2016). Each of these four components of psychological capital has been individually linked with the organisational performance and behavioural outcomes including organisational performance and employee’s job satisfaction as well. It has been assumed that individual has been a high level of psychological attributes do their best at the workplace and create their own success can easily fight with any setbacks if any occurs during the work in the organisation. According to psychological resource theory, this higher order of PsyCap can be considered as an intra-personal resource and helps in positive evaluation of an individual. Most of the organisation uses the PsyCap tool to measure the performance of employees and check their mental and psychological status (Zubair, 2015).
A large number of researches has been conducted in past to have examine the association between Psychological Capital and various employees attitudes. It has been found that a high-level PsyCap individual is more productive and self-confident in compare to another. It has been observed that PsyCap is positively related with those employees having positive and desirable attitudes and negatively related to those employees having an undesirable attitude (Eid, et. al., 2012). An important research to measure the effect of Psychological capital on employee attitudes is that those employees having higher level of PsyCap expect good things to happen at work (optimism) and vice-versa, and it has been seen that those people having positive and right attitude and emptions can create their own success (efficacy and hope). However, those people having high level of PsyCap are invulnerable to obstructions (resilience) when it compared with those employees having lower level of PsyCap. It is universal hope in the organisations that success depends on those individuals having high-level of PsyCap. High-level PsyCap people observed to be more satisfied with their jobs and are more loyal and committed towards their work and organisation (Woolley, Caza, and Levy, 2011).
Avey, Walumbwa, and Palanski (2011) described in article that authentic leadership style is a way of behaving ethically and encourage others for positive emotions. Attitudes of employees should be directed towards organisational goals and a leader should guide their followers or subordinate for sharing accurate information with the leader (Avey, Palanski, and Walumbwa, 2011). One thing that also important while talking about authentic leadership is that this type of leaders motivate and inspire their followers by refreshing them with positive psychological states. While we examine the LMX theory of leadership, we found that Leader-member exchange theory transmitting the impact of AL on follower’s performance as well. Numbers of authors believe that understand the psychology of employees in the organisation is an essential thing and authentic leadership should able to focus on employees psychology components such as hope, efficiency, optimism, and resilience.
Luthans and Avolio also focus on the importance of well-developed organisational context that drives self-confidence, self-regulation, and self-development among employees and leaders as well. According to complementary congruity theory, an authentic leader is the responsible person for the development of other employees; because an authentic leader is able to understand the psychology of their subordinates and they have also an impact on follower’s performance (Gardner, et. al., 2011). Generally, the characteristics of authentic leaders compliment the needed skills of employees, which requires for performing well in the organisation. It has been observed that those employees who believe in their leaders as being authentic leader, found to be more satisfied with their jobs and fell less job security. Employees feel safe and secure in the organisation because an authentic leader has a better understanding of their psychological needs that minimize the intentions to quit the organisations. If we consider above statements we found that PsyCap serves as the mediator between various organisational variable and authentic leadership.
There are various number of leadership styles such as self-leadership, transactional leadership, and transformational leadership that focus on enhancing the self-efficacy and self-confidence in employees that results in enhancement of employees performance. Peterson, (2011) said that it has been observed through a number of empirical researches that authentic leader influence their followers’ PsyCap through providing them with a better work climate in the organisation. Even the inspiring leader helps, motivate, and facilitate their subordinates to strengthen their PsyCap and excel their self-confidence and self-interest in order to achieve the organisational goals. According to Gruman and Saks (2011), trust and honest among employees and leader is the key of LMX theory of leadership (Gruman and Saks, 2011). Apart from this, a good leader always helps his/her employees to develop confidence and self-efficacy through motivation, positive feedback, and social persuasion.
Similarly, hope can be enhanced through various initiatives including involving employees in decision-making, stretch goals, transparent reward system, stepping, participative goal setting, providing adequate resources, training and providing better strategic alignment (Luthans, et. al., 2014). Even if the leader provides job security to the employees and provide leniency in assessing past performance, appreciate the present performance, and opportunity for future can enhance the morale of the employee. It results in better optimism and resilience behaviour of employees during the work in the organisation. Therefore, a better and strong relationship between a leader and his/her followers, which is the key of LMX leadership theory, facilitates the development of employees’ psychological capita (Bergheim, et. al., 2015). According to Rego, et. al. (2010), leader also plays an important role in employee engagement and helps organisations in retaining the real talented employee in the organisation for a longer period of time. Moreover, a standard quality Leader-Member Exchange (LMX) leadership linked with higher feelings of psychological empowerment and which helps them to give their level best to the organisation in return (Rego, et. al., 2010).
There are four essential key factors that play a vital role in creating psychological capital. These four key factors are hope, efficacy, resiliency, and optimism. According to Lithans, Avolio, Avey, and Norman (2007), these four qualities are the key factors in the creation of PsyCap. When people have all these four qualities, they give their best to the organisation. Thus, every leader wants to enhance these emotional qualities in every type of employees. However, every employee has different PsyCap and their needs are vary according to their designation and type of job. PsyCap is an essential factor in employees’ performance. A leader can inspire the employees by motivating them and provide them security against their silly mistakes (Bouckenooghe, Zafar, and Raja, 2015). This build confidence in the employees and they try their best in their job performance.
Especially when we are talking about the White-collar employees, they are motivated through promotion and appraisal in return to their good works. It helps to boost their self-confidence during their job. Blue–collar and white-collar employees are the two different group of employees in any organisation and they have different needs and emotions. Thus, it is essential for a leader to identify their emotions, inspire, and boost their confidence through appraisal, motivation, and promotion. Thus, they can give their best to the organisation. Blue-collar employees are attached to the organisation through financial benefits, while the white-collar professionals are keen to get the promotion, appraisal, and motivation for their work (Luthans, et. al., 2010). If we consider the professional and administrative employees, a leader can build PsyCap through provide training that leads to change in the mindset of these types of people.
Emotions are the real psychological phenomena. In any organisation, employees are the real assets of the organisation thus, it is essential to utilize their potential after analysing their need and emotions. An employee can critically be affected by their behaviours. Emotions play a vital role in overall organisational performance and in individual performance as well. Emotions determine how the entire organisation communicates within and outside world. Positive emotions among employees within the organisation help them to achieve the favourable outcome and higher quality job performance. According to Sousa, et. al., (2012), performance of employees depends upon what they feel and how they express their emotions (Sousa, et. al., 2010). Emotions directly linked with decision-making, interpersonal relations, and employees’ creativity. Thus, it is essential for a leader is to identify and control the emotions of employees and treat them accordingly.
Stander, et. al., (2015) said that emotions like aggression and anger can negatively affect the organisational and individual performance and positive attitude towards organisation, optimism, trust, and self-confidence is essential for the organisation and can improve the performance of employees positively (Stander, et. al., 2015). A large number of researchers found in their research that the emotions of employees considered as the key factor of employees’ well-being and their job satisfaction. While anger leads to aggression towards colleagues while sadness leads to job dissatisfaction. Negative emotions can be considered as a disease in the modern organisation. It has been found that people who continually conquer their emotions to be more disposed to this disease than those people who are emotionally expressive. But it I also considerable that emotions like anger, interest, fear, or interest is not happen at sudden, nor is prolonged like a mood, rather emotions is a short episode of harmonize changes in mind and body that directly linked with employees’ job performance (Thompson, Lemmon, and Walter, 2015). The role of a leader in managing employee’s PsyCap in the organisation is necessary because once the emotions of employees are directed toward the organisational goal; it is beneficial for both organisational and individual performance.
Conclusion:
From last few decades, Psychological Capital (PsyCap) has become a mainstream subject in the study of human resource management and organisational behaviour. Authentic leadership and Leader-member exchange style are two important styles of leadership through which psychological capital enhanced in the organisation. PsyCap is an essential factor in employees’ performance. In addition to this, we can say that psychological capital is one of the essential tools that create positive organisational behaviour, which is used to improve the performance of employees by boosting the four essential key factors of Psychological Capital.
References:
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Bergheim, K., Nielsen, M.B., Mearns, K., and Eid J. (2015) The relationship between psychological capital, job satisfaction, and safety perceptions in the maritime industry, Safety Science, 74 (8), pp. 27-36.
Bouckenooghe, D., Zafar, A. 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.
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