The mediating role of psychological capital in the supportive organizational climate—employee performance relationship

TL;DR: In this paper, the authors investigated whether the recently emerging core construct of positive psychological capital (consisting of hope, resilience, optimism, and efficiency) plays a role in mediating the effect of supportive organizational climate with employee outcomes.

Abstract: Summary Although the value of a supportive organizational climate has been recognized over the years, there is a need for better understanding of its relationship with employee outcomes. This study investigates whether the recently emerging core construct of positive psychological capital (consistingofhope,resilience,optimism,andefficacy)playsaroleinmediatingtheeffectsofa supportive organizational climate with employee outcomes. Utilizing three diverse samples, results show that employees’ psychological capital is positively related to their performance, satisfaction, and commitment and a supportive climate is related to employees’ satisfaction and commitment. The study’s major hypothesis that employees’ psychological capital mediates the relationship between supportive climate and their performance was also supported. The implications of these findings conclude the article. Copyright # 2008 John Wiley & Sons, Ltd.

Summary

Introduction

• Such a new paradigm environment has too often driven today’s 219 digitalcommons.unl.edui it l . organizations to compete and even survive on the basis of cutting price and costs through reengineering processes and downsizing the number of employees.
• New thinking and new approaches have become necessary for organizations to survive and to create sustainable growth and development.

The Meaning of Positive Organizational Behavior

• Snyder and his colleagues have specifically defined hope as a “positive motivational state that is based on an interactively derived sense of successful (1) agency (goal directed energy) and (2) pathways (planning to meet goals)” (Snyder et al., 1996).
• As adapted to the workplace, resiliency has been defined as the “positive psychological capacity to rebound, to ‘bounce back’ from adversity, uncertainty, conflict, failure, or even positive change, progress and increased responsibility” (Luthans, 2002a, p. 702).
• Similar to the other positive psychological capacities, empirical research on optimism in the workplace is just emerging.

Efficacy as a positive psychological strength

• Meeting the POB criteria perhaps better than any other capacity is self-efficacy.
• This positive construct is based on the comprehensive theory and extensive research of Bandura (1997) with recent emphasis to linking this construct to positive psychology (Bandura, 2007).
• In a meta-analysis consisting of 114 studies, they found a strong positive relationship between self-efficacy and work-related performance (Stajkovic& Luthans, 1998).
• Particularly relevant to the POB developmental criterion, Bandura (1997) has clearly shown that self-efficacy can be enhanced in four very specific ways.
• First, efficacy is developed when an employee experiences success (task mastery).

Psychological Capital

• Law, Wong, and Mobley (1998) provided a conceptual framework for determining how multidimensional constructs can relate to a core factor.
• Another linkage for the theoretical foundation for PsyCap compatible with psychological resource theories comes from positive psychologist Fredrickson’s (1998, 2001) broaden-and-build theory of positive emotions.
• Thus, drawing from this prior research, the authors are suggesting that PsyCap is “state-like,” i.e., moderately stable but not dispositional or fixed like personality or core self-evaluation traits and can be changed by experience and developed in training.
• Just as each positive capacity has evidence for discriminate and convergent validity it is more accurate to treat these four on a trait-state continuum rather than a pure state.
• In sum, PsyCap is presented here as an emerging higher order, core construct that organizations can invest in and develop in their workforce to achieve veritable, sustained growth and performance.

Supportive Organizational Climate

• As pointed out by Luthans and Avolio (2003), both PsyCap and a positive, supportive context are needed for human resources to achieve sustainable growth and performance.
• Some have considered as an individual performance equation, which includes a multiplicative combination of ability, support and effort (Schermerhorn, Gardner, & Martin, 1990).
• The authors also propose that this perceived supportive climate relates to desired outcomes.
• Prior research has shown a direct relationship between supportive climate and other desirable individual and organizational outcomes.
• To test the role that psychological capital may play in the supportive climate—employee performance relationship, the study’s major hypothesis is the following: Hypothesis 3.

Services firm

• The services firm sample in Study 2 has been in existence for approximately 30 years and provides technical and administrative services to insurance firms and individual customers.
• There are currently 1200 people employed in the division where this study took place.
• With the exception of a small group ( < 25) of computer programmers, all non-management employees are non-exempt and the company offers traditional benefits to all employees.
• The insurance service specialists that participated in this study work in an environmentally controlled office located in a medium-sized city in the middle of the U.S. Employees generally interface with their manager and coworkers throughout the day in between phone calls and on scheduled work breaks.

High-technology manufacturing firm

• The high technology manufacturing firm sample in Study 3 has been in existence since 1916 when its founder bought a shipyard in the state of Washington in the U.S.
• The firm now employs over 100 000 people and is one of the largest military contactors for the United States Department of Defense.
• The major divisions in the organization include commercial manufacturing, military manufacturing, space exploration, and satellite services.
• Specifically, the employees design wire bundle assemblies for the electrical subsystems of the products.
• They are generally highly educated and commonly work autonomously and simultaneously on multiple projects.

Methods

• Separate samples were used to test the hypothesized relationships.
• The sample in Study 2 was made up of 163 out of about 200 employees in the policy and claims processing group (82 per cent), who volunteered to participate in the study.
• It should again be noted that previous research (Luthans, Avolio et al., 2007) also used a sample from this same firm, but the sample from this firm used in the present study is a different group of participants collected several months later than the sample used in the previous research.

Supportive climate measure

• To measure the supportive climate the authors used the Rogg et al. (2001) questionnaire that has demonstrated considerable psychometric support.
• Using all 12 items from 2 out of the 4 factors, this shortened scale contained aspects of climate most relevant to this study (managerial consideration and employee cooperation/coordination factors).
• The reliabilities for this supportive climate scale utilized in the three samples were as follows: Study 1, .93; Study 2, .93; Study 3, .89.
• “Managers consistently treat everyone with respect” and “Departments cooperate to get the job done effectively and efficiently” with response categories from 1 = strongly disagree, 2 = disagree, 3 = somewhat disagree, 4 = somewhat agree, 5 = agree, and 6 = strongly agree, also known as Sample items included.

Performance measures

• It was still gathered at a later time than when the predictor variables were gathered in order to minimize single (self) source effects/bias (Podsakoff, MacKenzie, Lee, & Podsakoff, 2003).
• Study 2 with service employees utilized actual performance evaluation data on the participants obtained from their organizations’ human resources department.
• At the end of each quarter, the managers were asked to give their employees a rating based on the following three factors: the amount of claims processed , customer service , and the manager’s rating of “overall performance.”.
• For the high-tech firm in Study 3, participants’ managers derived a composite performance index based on rating their performance in terms of the following four factors: quality, quantity, teamwork, and contributing to the organization’s mission.
• This was the existing performance evaluation process and was conducted bi-annually.

Satisfaction and commitment measures

• In addition to performance, these studies also examined the relationship between supportive climate and the work attitudes of satisfaction and commitment.
• As with the self-reported performance measure utilized in Study 1, the job satisfaction data were gathered at a later point in time from the predictor climate and PsyCap measures in order to minimize bias (Podsakoff et al., 2003).
• The organizational commitment measure used the most relevant affective scale from the Allen and Meyer (1990) instrument.
• Once again the organizational commitment data were gathered at a later point in time from the predictor scales in order to minimize rating bias.

Procedures

• They were then electronically sent a unique password via e-mail that enabled them to log onto the site and take the questionnaire survey at two points in time.
• As Podsakoff and colleagues (2003, p. 887) have suggested, this “makes it impossible for the mindset of the source or rater to bias the observed relationship between the predictor and criterion variables, thus eliminating the effects of consistency motifs, implicit theories, and social desirability tendencies.”.
• It should be noted that the survey questions were not altered for the student sample in order to keep the data collection as consistent as possible across samples.
• Those who chose to participate were sent an e-mail with a URL on a secure server to complete the first survey session which included the climate and PsyCap questionnaires.
• Again, like Sample 2, the actual performance measure for these Study 3 participants was gathered from the organization’s human resources department records representing another point in time.

Analyses

• The primary analysis technique used for testing the main hypothesis on PsyCap mediation of the climate–performance relationship was Baron and Kenny’s (1986) technique, as revised by Kenny, Kashy, and Bolger (1998).
• In the third equation, the dependent variable was regressed on both the independent variable (supportive climate) and the mediating variable .
• They note as long as steps two and three are met, the path to the dependent variable is implied, and therefore, condition one is no longer required to statistically demonstrate mediation.
• This test is designed to assess whether a mediating variable carries the effects of the independent variable (supportive climate) to a dependent variable .
• Under this test, a significant p-value indicates support for mediation.

Results

• The means, standard deviations, and correlations among all variables for all three studies are shown in Table 1.
• As indicated in Table 1, these relationships are also significant in Study 2, but, as indicated earlier, since a version of this service employee sample and variables were used in previous research, these Study 2 results were excluded in testing Hypothesis 1 in the present study.

Supportive climatea .04 -.02

• Table 1 also shows support for Hypothesis 2, that supportive climate is significantly related to satisfaction and commitment.
• Regression results for each sample are shown in Table 2.
• In sum, conditions two and three of Baron and Kenny’s (1986) tests for mediation were satisfied while condition one was not.
• The Aroian tests do not make the assumption that the products of the standard errors of both regression coefficients used in the calculation is “vanishingly” small (Aroian, 1944/1947; also see Baron & Kenny, 1986; Preacher& Hayes, 2004).
• Thus, all of the statistical tests supported PsyCap as mediating the relationship between supportive climate and performance and thus provides full support for the study’s major hypothesis.

Discussion

• As found in previous research, across two heterogeneous samples in the present study, psychological capital was found to be positively related to performance, satisfaction, and commitment.
• Given the seeming importance of PsyCap in predicting employee outcomes, these studies demonstrate the utility of a supportive climate and the importance of the relationship between these perceptions and employees’.
• Another potential limitation that needs to be recognized concerns the nature of cross-sectional research.
• The direction of the relationship can not be determined without establishing temporal precedence and experimental manipulations.
• While these constructs have clear discriminant validity and this correlation leads us to conclude they only potentially share about 25 per cent of common variance, there still may be common method bias that could have impacted the pattern of results observed in these three studies.

Implications and Conclusion

• Several practical implications emerge from the results of the study.
• First, this study provides further evidence of the important role that PsyCap may play in positively impacting the performance and work attitudes of employees and potentially may contribute to an organization’s competitive advantage.
• This study would suggest that it may be important to recognize that the level of an employees’ psychological capital may also play a role in leveraging what a positive or supportive organizational climate can contribute to performance.
• An implication for both better theoretical understanding and effective practice concerning the supportive climate–performance impact relationship is the role of PsyCap as an important psychological resource for today’s organizations.
• Since psychological capital is “state-like” and there is at least preliminary evidence that it can be developed (e.g., Luthans et al., 2006, in press), investing in and developing employees’ psychological capital may be an example of the new thinking and new approaches that are needed for the “flat world” environment facing today’s organizations and their leaders.

Figures

Table 2. Regression results for PsyCap on supportive climate for all three samples criterion of performance

Table 1. Means, standard deviations, and inter-correlations among study variables

Full text

University of Nebraska - Lincoln
DigitalCommons@University of Nebraska - Lincoln
Management Department Faculty Publications Management Department
2008
%e Mediating Role of Psychological Capital in the
Supportive Organizational Climate–Employee
Performance Relationship
Fred Luthans
University of Nebraska-Lincoln, =uthans1@unl.edu
Steven M. Norman
Mesa State College
Bruce J. Avolio
University of Nebraska - Lincoln, bavolio@u.washington.edu
James B. Avey
Central Washington University, aveyj@cwu.edu
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Luthans, Fred; Norman, Steven M.; Avolio, Bruce J.; and Avey, James B., "<e Mediating Role of Psychological Capital in the
Supportive Organizational Climate–Employee Performance Relationship" (2008). Management Department Faculty Publications. 136.
h>p://digitalcommons.unl.edu/managementfacpub/136

Published in Journal of Organizational Behavior 29 (2008), pp. 219–238; doi: 10.1002/job.507
Copyright © 2008 John Wiley & Sons, Ltd. Used by permission.
The Mediating Role of Psychological Capital in
the Supportive Organizational Climate–Employee
Performance Relationship
Fred Luthans,
1
Steven M. Norman,
2
Bruce J. Avolio,
1
and James B. Avey
3
1 Department of Management, Gallup Leadership Institute, University of Nebraska-Lincoln,
Lincoln, Nebraska
2 Mesa State College, Grand Junction, Colorado
3 College of Business and Economics, Central Washington University, Ellensburg, Washington
Corresponding author — Fred Luthans, Department of Management, University of Nebraska-Lincoln, Lin-
coln, NE 68588-0491, USA; email 
Summary Although the value of a supportive organizational climate has been recognized over
the years, there is a need for better understanding of its relationship with employee
outcomes. This study investigates whether the recently emerging core construct of
-
cacy) plays a role in mediating the effects of a supportive organizational climate
with employee outcomes. Utilizing three diverse samples, results show that em-
ployees’ psychological capital is positively related to their performance, satisfac-
tion, and commitment and a supportive climate is related to employees’ satisfac-
tion and commitment. The study’s major hypothesis that employees’ psychological
capital mediates the relationship between supportive climate and their performance

Introduction
The thesis of Tom Friedman’s (2005) best-selling book “The World is Flat” is that “it is now possible
for more people than ever to collaborate and compete in real-time with more other people on more differ-
ent kinds of work from more different corners of the planet and on a more equal footing than at any previ-
ous time in the history of the world” (p. 8). Such a new paradigm environment has too often driven today’s
219
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220 29 (2008)
organizations to compete and even survive on the basis of cutting price and costs through reengineering pro-
cesses and downsizing the number of employees. These stop-gap measures have about run their course in

for organizations to survive and to create sustainable growth and development. As the Chairman and CEO
of The Gallup Organization, Jim Clifton, noted “in the new world of extreme competition, we are all going
down the wrong path unless we discover a new way to manage” (Coffman & Gonzalez-Molina, 2002, p. xii).
The purpose of this article is to propose not only the importance of a supportive organizational climate to
counter the negatively oriented downsizing of recent years, but also the importance of understanding a re-
cently proposed positive perspective and strategy to human resource development and managing for perfor-
mance impact called psychological capital, or simply, PsyCap (Luthans, Avolio, Avey, & Norman, 2007; Lu-
thans, Luthans, & Luthans, 2004; Luthans & Youssef, 2004; Luthans, Youssef, & Avolio, 2007). In endorsing
the recent book on Psychological Capital (Luthans, Youssef et al., 2007), organizational behavior scholar
Denise Rousseau states that it “shows how recent breakthroughs in the positive psychology movement can


related to a supportive organizational climate for employee performance impact.
The Meaning of Positive Organizational Behavior
Positive organizational behavior (Luthans, 2002a, 2002b, 2003; Luthans & Youssef, 2007; also see Nel-
son & Cooper, 2007; Wright, 2003) and its derivative psychological capital or PsyCap (Luthans, Avolio, et
al., 2007; Luthans et al., 2004; Luthans & Youssef, 2004; Luthans, Youssef et al., 2007) is largely drawn from
the theory and research in positive psychology (Peterson & Seligman, 2004; Seligman and Csikszentmihalyi,
2000; Sheldon & King, 2001; Snyder & Lopez, 2002) applied to the workplace (Luthans & Youssef, in press).
Simply put, positive psychology is concerned with people’s strengths (rather than weaknesses and dysfunc-

claim to have discovered the value of positivity, but rather the intent is to simply shift to a more balanced fo-
cus of understanding and developing what is also right with people and how they can thrive.
Positive organizational behavior, or simply POB, takes positive psychology to the workplace (Luthans,

application of positively oriented human resource strengths and psychological capacities that can be mea-
sured, developed, and effectively managed for performance improvement in today’s workplace” (Luthans,

must not only be a positive strength or psychological capacity, but also must be grounded in theory and re-
search, have valid measures, and perhaps most importantly for differentiating from other positively oriented

like) and therefore open to development and management for performance improvement (Luthans, 2002a,
2002b; Luthans & Youssef, 2007; Luthans, Youssef et al., 2007).

development books and the widely recognized largely trait-based positive constructs (such as positive af-
fectivity, conscientiousness, self-esteem, or core self-evaluations) and the University of Michigan’s research

 221
group’s work on more macro-oriented positive organizational scholarship (Cameron & Caza, 2004; Cam-
eron, Dutton, & Quinn, 2003; Roberts, 2006). Though there is some overlap with this complementary work,
POB is mainly different in its “state-like” malleability and focus on performance impact at a more micro-
level. For example, in making the distinction between POB and POS Nelson and Cooper (2007, pp. 3–4)
note that “Luthans recommended that POB researchers study psychological states (italics added) that could
be validly measured, and that are malleable in terms of interventions in organizations to improve work per-
formance,” whereas “the POS movement seeks to understand human excellence and exceptional organiza-

human resource development and performance management.
To date, the positive psychological constructs that have been determined to best meet the POB criteria are

Luthans & Youssef, 2007; Luthans, Youssef et al., 2007). However, it should be noted that other positive psy-
chological constructs could and likely will be included in the future. Some representative examples include
positive concepts such as work engagement (Schaufeli & Bakker, 2004; Schaufeli & Salanova, 2007), psy-
chological well-being (Wright & Cropanzano, 2000, 2004), psychological ownership (Avey, Avolio, Cross-
ley, & Luthans, in press), wisdom, courage, and forgiveness (e.g., see Luthans, Youssef et al., 2007, Chap-
ters 6 and 7), and Peterson and Seligman (2004) discuss a variety of positive virtues that could also meet the

meet the POB inclusion criteria at this time and also theoretically and empirically have been shown to make
up the core construct of psychological capital (Luthans, Avolio et al., 2007).
Hope as a positive psychological strength
Hope is widely used in every day language, but as examined here is most closely associated with the theory
and research of positive psychologist C. Rick Snyder. Snyder and colleagues’ hope theory (Snyder, Sympson,
Ybasco, Borders, Babyak, & Higgins, 1996; Snyder, 2000, 2002) is widely recognized in clinical and positive

“positive motivational state that is based on an interactively derived sense of successful (1) agency (goal directed
energy) and (2) pathways (planning to meet goals)” (Snyder et al., 1996). Thus, hope can be viewed as consist-
ing of three distinct but complementary components: agency (will-power), pathways (way-power), and goals.
-
der et al., 1996). Thus, agency includes the motivation or goal-directed energy to succeed at a given task in

a pathway is considered to be the way to accomplish a task or goal. Together, they form the will and the way
to accomplish a given task or goal. Snyder and colleagues’ theory and research suggest having one compo-

to succeed in a given task, as well as a viable means, or way to accomplish that task. In clinical and positive
psychology, hope has been clearly linked to academic and athletic success (Snyder, 2000, 2002), but only re-
cently has it been analyzed in the workplace. In preliminary research in the workplace, hope has been found
to be related to Chinese factory workers’ supervisory rated performance (Luthans, Avolio, Walumbwa, & Li,

employee performance, satisfaction, happiness, and commitment (Youssef & Luthans, 2007).

222 29 (2008)
Resilience as a positive psychological strength
Resilience theory and research is largely drawn from clinical psychology’s work with adolescent chil-
dren that have succeeded despite great adversity (Masten, 2001; Masten & Reed, 2002). Resilience is often

-

increased responsibility” (Luthans, 2002a, p. 702). Therefore, resilience can be characterized by coping re-
sponses not only to adverse events, but also to extreme positive events as well.
As with hope, to date research on resilience has been mainly limited to clinical and positive psychology.
However, similar to the focus on hope, preliminary research has begun to examine the impact of resiliency
-
-
thans et al., 2005). Resiliency has also been found to be related to work attitudes of satisfaction, happiness,
and commitment (Youssef & Luthans, 2007).
Optimism as a positive psychological strength
The theoretical foundation for optimism as a POB strength is largely drawn from the discussions of pos-
-
tively stable, and global attribution regarding positive events such as goal achievement, and an external, rel-

criticism of false optimism, POB tends to emphasize realistic optimism (Luthans, 2002b; Luthans, Youssef
et al., 2007; Schneider, 2001). In other words, optimism is not based on an unchecked process that has no re-
alistic assessment. This realistic optimism as a state (as opposed to a dispositional trait), includes an objec-

and therefore can vary (see Peterson, 2000).
Similar to the other positive psychological capacities, empirical research on optimism in the workplace is
-
mance of insurance sales agents. In addition, in the study of the Chinese factory workers mentioned previ-
-
mance. The study by Youssef and Luthans (2007) found employees’ optimism related to their performance,
satisfaction, and happiness.


based on the comprehensive theory and extensive research of Bandura (1997) with recent emphasis to link-
ing this construct to positive psychology (Bandura, 2007). Applied to the workplace, Stajkovic and Luthans

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a given context. In a meta-analysis consisting of 114 studies, they found a strong positive relationship be-
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Frequently asked questions

Q1. What contributions have the authors mentioned in the paper "The mediating role of psychological capital in the supportive organizational climate–employee performance relationship" ?

Luthans et al. this paper proposed the importance of a supportive organizational climate to counter the negatively oriented downsizing of recent years, and also the importance in understanding a recently proposed positive perspective and strategy to human resource development and managing for performance impact called psychological capital, or simply, PsyCap. 

Q2. What are the future works in "The mediating role of psychological capital in the supportive organizational climate–employee performance relationship" ?

First, this study provides further evidence of the important role that PsyCap may play in positively impacting the performance and work attitudes of employees and potentially may contribute to an organization ’ s competitive advantage. This study would suggest that it may be important to recognize that the level of an employees ’ psychological capital may also play a role in leveraging what a positive or supportive organizational climate can contribute to performance. In conclusion, the results of this study not only suggest the seeming value of employees ’ psychological capital at all levels within organizations, but also the benefits that may result from organizations providing positive, supportive climates. Since psychological capital is “ state-like ” and there is at least preliminary evidence that it can be developed ( e. g., Luthans et al., 2006, in press ), investing in and developing employees ’ psychological capital may be an example of the new thinking and new approaches that are needed for the “ flat world ” environment facing today ’ s organizations and their leaders.