The four pillars of psychological capital

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The work is aimed at evaluation of the association between the authentic leadership, leader member exchange, and the employee’s psychological capital, with the aid of review of the varied range of literary works in this context. Authentic Leadership, Leader Member Exchange and the Psychological Capital of the employees: A positive relationship The following segment evaluates a range of literature to study the interconnection of the psychological capital of the employees, leader member exchange, and authentic leadership. (2014), developed the term psychological capital, to understand and

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LEADERSHIP
LITERATURE REVIEW

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Introduction
The “psychological capital” denotes a developmental and positive state of mind of an
individual, characterised by optimism, hope, high self-efficacy, and resiliency. The
mentioned four pillars of the psychological capital serve as the basis for motivation of the
individuals at the work place, resulting attitude, overall conduct in an entity and the cognitive
processes on personal level. These aid the individuals at the workplace in terms of success in
the assigned job role, the accomplishment of the challenging tasks, achievement of the
professional and personal goals, and the development of aptitude to face the challenging
situations at workplace.
On the other hand, the word authenticity refers to be true to oneself. The word further aids in
the derivation of the meaning of the term “authentic leadership.” Thus, the authentic
leadership is characterised by the quality of the thoughts, beliefs, and learnings from
experiences, preferences, needs; and wants of the leaders of an enterprise. The authentic
leaders of an enterprise undertake different management styles and render trust and efficiency
in the performance of the employees. The work is aimed at evaluation of the association
between the authentic leadership, leader member exchange, and the employee’s
psychological capital, with the aid of review of the varied range of literary works in this
context.
Authentic Leadership, Leader Member Exchange and the
Psychological Capital of the employees: A positive relationship
The following segment evaluates a range of literature to study the interconnection of the
psychological capital of the employees, leader member exchange, and authentic leadership. In
order to develop the understanding of the interdependence between the above mentioned
concepts, it is first imperative to understand the meaning and significance of the
psychological capital.
“Luthans and his colleagues” as stated in the work of Newman et al. (2014), developed the
term psychological capital, to understand and evaluate the psychological capacities of the
employees, measure it, develop it and to harness maximum efficient performance from the
employees at the workplace. In addition, the psychological capital is distinguished from the
other types of capital such as the social capital and human capital. In addition, the authors cite
(Walumbwa et al., 2011) to state that the psychological capital is the consequence of
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collaborative exchanges between members of an organisation leading to an overall group’s
ability for the achievement of the collective goals. Thus, psychological capital development
involves the interaction not only among the colleague, as well as the leaders and the
employees.
The authentic leadership as defined in the work of Munyaka et al. (2017) refers to the pattern
of behaviour of a leader of an organisation and forms the core of the organisational culture
and the positive organisational behaviour (POB). The authors suggest that the authentic
leadership leads to the promotion of both the ethical climate and the positive psychological
capacities in an entity. This further facilitates greater self-awareness, transparency in the
business processes and the information exchange and self-development both for subordinates
as well as the leaders of the enterprise. Authors cited Avey et al. (2011) to state that there is a
positive correlation between the authentic leadership and psychological capital of the
employees, which further leads to team commitment, employees’ engagement, and
challenging of the intention to quit of the employees. As a result, the employees develop a
string sense of an affective commitment to remain with an organisation.
The authors Niu et al. (2018) explore the significance of the leader member exchange in the
organisation in the development of the organisational behaviour and overall work culture. It
has been stated in the work that in an organization, the association between the subordinates
and their leader in an entity is crucial for organizational efficiency and efficacy. The authors
suggest that the leader member exchange or the communication between the leaders and the
employees facilitate the followers to develop the characteristics of the leader, in terms of the
person-based identity that is the personal traits and the role-based identity that is the
leadership and mentor roles. The authors quoted Hsiung (2012) and Zhou et al. (2014) to
state that a high quality LMX that is characterised by mutual regard, trust, and respect lead to
the positive emotions among the employees, employee innovation and identification of the
organisational identity.
Building the psychological capital among the employees
One of the top priority of the leaders of the modern business organisations is the Building the
psychological capital (Olaniyan and Hystad, 2016).
There are numerous ways through which the leader member exchange can occur in the
organisation that enables sense of inclusion within an enterprise for the employees (Brimhall,
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et. al, 2016). Some of the ways as elaborated are deployment of resources in context of the
relevancy of the task assigned, defending the employees in the events of the various job
situations and the resulting negative impacts and the establishing the practice of the obtaining
the employee feedbacks. Further the building -up of valuable social connections also
facilitate the development of the psychological capital. In addition, the employees must be
encouraged to do challenging tasks, the required infrastructure must be provided together
with the affective intimate behaviour.
As stated by Saraç, Meydan, and Efil, (2017), the interaction between the individual
outcomes and the organisational outcomes lead to the variance in the job tenure, job
identification, greater organizational commitment, and improved job satisfaction at the
workplace. The study of the authors concentrated on the difference in the job perspectives of
the blue collar and the white collar employees. The authors cited Seong, Hong and Park
(2012) to state that different groups of the employees such as the blue-collar and white-collar
groups have different motivations towards the job. It has been further stated in the work that
the value system of both the category of the employees differ significantly and the resulting
needs, roles, experiences, perceptions, attitudes and behaviours.
As stated above, there lies a difference in the motivation and perspectives of the various
category of employees depending upon the job role such as in the administrative jobs, blue
collar jobs, white collar jobs, and others. Thus, it is vital to note that there lies a difference in
the means of the job satisfaction and building of the psychological capital. It must be noted
that employees engaged in the white collar jobs have high pay scale together with the high
grade of responsibility and demand of higher participation in the organisational functions and
decision making processes as compared to the individuals engaged in the blue collar jobs
(Van Der Heijden, Schepers and Nijssen, 2012). Thus, the psychological capital of said
category of the employees is dependent upon endowment of higher accountability and greater
job responsibilities in an organisation. Thus, in order to build the psychological capital,
feedbacks being welcomed by the leaders from these category of employees is crucial.
As opposed to the above, the blue collar job employees are mostly engaged in manual or
clerical job roles in contrast to the white collar employees. The motivating factors for this
group of employees can be stated to be the monetary incentives, positive interactions with the
leaders, continuous support and the sense of organisational involvement. In addition, the
intrinsic job satisfaction and internal group goals are stated to be vital for said jobs (Chang,

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Chan, Gudmundsson and Sawang, 2011). In order to build the psychological capital of the
said category of the employees, the leader member exchange should focus on leaders
discussing the job complexities with the employees, motivating them, organising training
workshops, initiating group discussions focussed on job problems and solutions. In addition
the providing efficient infrastructure and resources for the job and allocation of the job
according to the individual capabilities is crucial for psychological capital.
Psychological Capital, Leader Member Exchange and Employee
performances
As stated by Peterson et al. (2011), the notion of psychological capital is substantial because
of the associated impact on not only the individual performances but also as a team. The
positive cognition and the processes of motivations comprised in the psychological capital
lead to the improvement in the performances of the employees. The employee performances
are stated to be enhanced in context of the development of personality traits, optimistic yet
realistic expectations about the individual goals, self-evaluations, and the reconciliation of the
individual cultural differences to work as a unit.
The effect of the authentic leadership over the employee performances is also evident and
plays a significant role in the organisational performance as a whole (Mohameed and Khaled,
2019). The employees tend to be more self-confident in context of their abilities while on the
premises of the organisation and they tend to learn while observing the behaviours of the
authentic leaders. Further, the potential of the employees can be unleashed and developed
when the authentic leaders provide feedbacks and the constructive criticisms in a positive and
developmental manner. Thus, a sense of trust, security and sense of determination is
developed. The said environment facilitates the pathways for efficient addressing of the
organisational problems and thereby improvement in the positive emotions of the employees.
Thus, while there is an absence of a direct link between the authentic leadership and the job
insecurity, yet there is an indirect relationship over the employee performances.
The psychological capital and authentic leadership are not only vital in terms of the economic
and corporative conduct; rather they play a more significant role in the jobs involving the
emotional labour such as the teaching jobs (Tosten and Toprak, 2017). The work further
states that there is the intense use of emotional labor as there is requirement of production of
an emotional state in the client and the use of the facial or voice contacts with the clients. As
a result, the employer has an advantage of exerting some degree of control over the
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expressive actions of employees. The positive psychological strengths and capacities have the
most crucial role play in these jobs because of the emotions involved. In this type of jobs, the
psychological capital and the employee performance is already the highest with a sense of
personal competencies, perseverance, feelings of achievements with changes made it lives of
clients, goal-directed energy and better adaptation in cases of adversity and risk (Wang,
2015). The employers are required to be least involved in terms of motivation for this
category of job as compared to the other jobs.
Further, the significance of the psychological capital is also evident in the area of job search
of the employees. It has been stated in the work of Chen and Lim, (2012) that even after the
displacement from the jobs, the employees with higher psychological capital aids the
employees in the overcoming the setbacks in the jobs, maintaining the mental strength of the
and the reemployment job search.
Conclusion
The discussions conducted in the previous parts, as carried on with the aid of the supporting
literature review aids to conclude that a strong relationship is evident among the
psychological capital, leader member exchange and the overall performances of the
employees in an entity. The policies and the business strategies formulated at the top can be
effectively implemented by efficient exchange of the same with the followers. The same
exchange is crucially dependent on the type of job role of the employee such as the
administrative job, blue collar and white collar jobs. The review highlighted the factors of
motivation for different job roles and accordingly the matters of significance to build the
psychological capital. Thus, a conclusion can be reached on the basis of the review of the
literary works that the authentic leadership and efficient exchange between members and
leaders build a positive environment at the workplace.
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References
Avey, J. B., Reichard, R. J., Luthans, F., and Mhatre, K. H. (2011). Meta-analysis of the
impact of positive psychological capital on employee attitudes, behaviours, and performance.
Human Resource Development Quarterly, 22(2), pp. 127–152.
Brimhall, K. C., Mor Barak, M. E., Hurlburt, M., Mcardle, J., Palinkas, L., and Henwood, B.
(2016) Increasing Workplace Inclusion: The Promise of Leader-Member Exchange. Human
Service Organizations: Management, Leadership & Governance, 41(3), pp. 222-239.
Chang, A., Chan, F., Gudmundsson, A., and Sawang, S. (2011) Motivating Blue-Collar
Employees: A Case Study of the Chinese Workforce. Journal of Asia-Pacific Business, 12(1),
pp. 69-85.
Choi, Y. and Lee, D. (2014) Psychological capital, Big Five traits, and employee outcomes.
Journal of Managerial Psychology, 29(2), pp. 122-140.
Hsiung, H. H. (2012) Authentic leadership and employee voice behavior: A multilevel
psychological process. Journal of Business Ethics, 107(3), pp. 349–361
Mohameed, S. M., and Khaled, O. (2019) The mediating role of authentic leadership between
the relationship of employee training and employee performance. Management Science
Letters, 9(3), pp. 381-388.
Munyaka, S. A., Boshoff, A. B., Pietersen, J. and Snelgar, R. (2017) The relationships
between authentic leadership, psychological capital, psychological climate, team commitment
and intention to quit. SA Journal of Industrial Psychology, 43(1), pp. E1-E11.
Newman, A., Ucbasaran, D., Zhu, F., and Hirst, G. (2014) Psychological capital: A review
and synthesis. Journal of Organizational Behavior, 35(S1), pp. S120-S138.
Niu, W., Yuan, Q., Qian, S., and Liu, Z. (2018) Authentic leadership and employee job
behaviors: The mediating role of relational and organizational identification and the
moderating role of LMX. Current Psychology, 37(4), pp. 982-994.
Olaniyan, O. and Hystad, S. (2016) Employees’ psychological capital, job satisfaction,
insecurity, and intentions to quit: The direct and indirect effects of authentic
leadership. Revista de Psicología del Trabajo y de las Organizaciones, 32(3), pp. 163-171.

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Peterson, S., Luthans, F., Avolio, B., Walumbwa, F. and Zhang, Z. (2011) Psychological
Capital And Employee Performance: A Latent Growth Modeling Approach. Personnel
Psychology, 64(2), pp. 427-450.
Saraç, M., Meydan, B., and Efil, I. (2017) Does the relationship between person–organization
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Seong, J. Y., Hong, D. S. and Park, W. W. (2012) Work status, gender, and organizational
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Tosten, R., and Toprak, M. (2017) Positive psychological capital and emotional labor: A
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Van Der Heijden, G., Schepers, J., and Nijssen, E. (2012) Understanding workplace boredom
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Wang, L. (2015) The relationship between employee psychological capital and change-
supportive behavior: Mediating effect of cognitive of change. Open Journal of Social
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Zhou, J., Ma, Y., Cheng, W., and Xia, B. (2014) Mediating role of employee emotions in the
relationship between authentic leadership and employee innovation. Social Behavior and
Personality: An International Journal, 42(8), pp. 1267–1278.
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