Psychological Capital Essay 2022

Running Head: Positive Leader
Psychological Capital (PsyCap)
Essay
System04104
8/13/2019

Positive Leader 1
Leadership and Psychological Capital
Leadership plays a vital role in the performance of employees and it also determines
the success or failure of organisation. However, psychological capital, which is also known as
‘PsyCap’ plays an important role in both leadership development and influence (Avey, 2014).
The aim of this essay to shows the relationship between psychological capital and different
leadership styles. The essay also demonstrate that how psychological capital determines the
leadership effectiveness and leadership development.
Psychological Capital has gained lots of emphasis of researchers and human resource
experts as an important factor in leadership development and leadership effectiveness. The
psychological capital comprising four factors named self-efficacy, hope, resiliency, and
optimism. However, there are many researchers and pioneer in the field of management
stated that PsyCap is an important factor in leadership influence and development in the
modern organisations. Leadership is an important thing in every organisation. In the words of
John C Maxwell, “everything rises and falls in leadership” (Leroy, Anseel, Gardner, and Sels,
2015). It is the leadership that determines the organisational performance and success by
influencing and motivating the employees to perform their best to achieve the organisational
goals and objectives (Avey, 2014). A leader not only help the employees in their performance
rather it also helps to determine the job satisfaction of employees, their motivation level,
providing a positive work environment to employees, and solve the issue of employees after
considering their grievances.
A positive leader is not always found at the top level of the organisation rather a
leader can be found at any level of the organisation. The role of a good leader to determine
the organisational goals and objectives and motivates the employees to achieve the
organisational goals with available resources and within the timeframe (Walumbwa, et. al.,
2008). However, there are various types of leadership in the organisations. Some of the
important leadership styles, which are more popular and related to psychological capital are
as follow:
Authentic Leadership: The authentic leadership style revolves around the ethical
behaviour of a leader. The authentic leadership style generally focuses on establishing a good
relationship with employees and encourages them to meet the target or achieve the goals of

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the organisation in significant manner (Walumbwa, et. al., 2008). An authentic leader always
focuses on an open relationship with its followers or subordinates. It can be said that the core
quality of an authentic leader is being authentic and transparent to the followers or employees
whom he/she leads. An authentic leadership always maintain integrity in the organisation,
motivate others, and self-aware about their own strength and weakness (Leroy, Anseel,
Gardner, and Sels, 2015).
Leadership-Member Exchange (LMX): LMX approach of leadership is based on
two-way (dyadic) relationship between leaders and followers. According to this theory, the
leader has strong relationship and faith in some of the people of the organisation, but not with
all the members. The LMX theory can be divided in two type of relationship with two
different type of group. The first group called in-group members who are closed to the leader
and second group called out-group members who are not close like the in-group members to
the leader. However, the in-group members receive more trust and favour from the leader
while the out-group member receives only standard job benefits to perform the standard job
description.
Psychological Capital is the part of positive organisational behaviour. PsyCap enables
the people to accept the challenging task and having confidence to put necessary efforts to
complete any type of task or work. Psychological capital can be defined as “an individual’s
positive psychological state of development” which is characterised by the having high levels
of HERO (Hope, Self-efficacy, Resilience, and Optimism). Psychological capital plays an
important role in developing the personal capabilities and competencies of people to achieve
the stable organisational growth (Hoch, Bommer, Dulebohn, and Wu, 2018). In other words,
it is the scientific study of individual approach and their optimal functioning that enables the
people to succeed. The features of psychological capital also enable the person to do those
things that give more job satisfaction or life satisfaction to the people.