Ref No. 449
Impact of Psychological Capital on Innovative Performance and Job Stress
Muhammad Abbas Faculty of Management Sciences, Riphah Int‘l University Islamabad Pakistan Email:
[email protected]
Usman Raja, PhD Faculty of Business (OBHREE), Brock University, 500 Glenridge Ave. St. Catharines, Ontario L2S 3A1 Canada, Ph: +1 905 688 5550 ext. 3899; Fax: +1 905 641 8068 Email:
[email protected];
[email protected]
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Ref No. 449
Impact of Psychological Capital on Innovative Performance and Job Stress
Abstract Research on positive organizational behavioral has explored the value added contributions of psychological capital in predicting various workplace outcomes. Yet the relationship between psychological capital and innovative job performance has largely been ignored. The current study investigated the effects of psychological capital on supervisory-rated innovative job performance. The study also examined the impact of psychological capital on job stress. Data collected from a diverse sample of 237 employees, from various organizations in Pakistan, provided good support for the hypotheses. The results indicated that psychological capital was positively related innovative job performance and negatively related to job stress. High PsyCap individuals were rated as exhibiting more innovative behaviors, by their supervisors, than low PsyCap individuals. Similarly, our findings also reveal that individuals with high psychological capital reported lower levels of job stress as compared to their low PsyCap counterparts.
Key words: Psychological Capital, Innovative performance, Job Stress
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Ref No. 449 Creativity and innovation have remained an important concern for organizations as well as for researchers. The fast growing competition has intensified the need for creativity and innovation in all domains of work. To gain competitive advantage firms are now required to be innovative (McAdam & Keogh, 2004). Moreover, organizations require innovative people to ensure sustainability in their competitive positions in the market (Kanter, 1988). Considering the importance of innovations, extant research has focused on contextual (Amabile, 1988; Carson & Carson, 1993; Shalley, 1991, 1995; Staw, 1990) as well as dispositional (Barron & Harrington, 1981; Gough, 1979; Isena, Daubman & Nowickia, 1987; Martindale, 1989) factors that stimulate innovative behaviors among individuals. Meanwhile, the development of psychological capital theory has provided an important contribution to various domains of organizational behavior reserach. Derived from the positive psychology research, psychological capital (PsyCap) has been found to be related to various job outcomes (Larson & Luthans, 2006; Luthans, Avolio, Avey, & Norman, 2007; Luthans, Norman, Avolio, & Avey, 2008). Despite the potential of PsyCap in predicting various desirable job outcomes, little attention has been paid to investigate its relationship with innovative job performance. In a recent study, Sweetman, Luthans, Avey, & Luthans, (2010) investigated the relationship between PsyCap and creative performance. However, these authors used a creative exercise that was restricted to the idea generation phase of innovation and had less relevance to job related innovative performance. Moreover, realizing their limitations, these authors called upon future research to draw from alternative measures of creative performance.
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Ref No. 449 Creative performance or creativity is, although, closely linked to innovative behaviors, however, creativity is a starting point, while innovation includes different steps of the successful implementation of creative ideas within an organization at different levels (Amabile et al., 1996). Having said this and realizing the need for a more composite measure of individual‘s innovation, we measure supervisory-rated innovative performance using Janssen‘s (2000, 2001) scale that covers almost all necessary phases of individuals‘ innovative behaviors. The current paper extends the theory of psychological capital, predominantly developed and tested in Western settings, in an Eastern setting. Thus, it provides external validity to this theory. In addition, keeping in view the relevance of psychological capital with creativity, innovation, and coping, we test for the impact of psychological capital on supervisory-rated innovative performance and job stress. Although the field of innovation is very broad, current study focuses on the adaptation of innovation at individual levels which is conceived to encompass the generation, development, and implementation of new ideas or behaviors at the job (Damanpour, 1991) Researchers have emphasized the importance of conducting innovation related research ―among organizations in emerging economies‖ particularly in Asian settings (Drazin & Schoonhoven, 1996: 1081). Since studies examining employee innovative behaviors in non U.S work settings are rare with few exceptions including research conducted in Bulgaria (Madjar, Oldham, & Pratt, 2002) and Taiwan (Farmer, Tierney, & Kung-Mclntyre, 2003). Moreover, Asia has an important role in the global economy as the MNCs are increasingly moving to Asian regions (Bartlett & Ghoshal, 1989) and China and India are emerging as new competitors in MNCs‘ innovative network (Bruche,
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Ref No. 449 2009). Drazin and Schoonhoven (1996) argue that the demand for U.S management consultants and business school professors is increasing, thus providing an opportunity for research and intellectual exchange across different cultures. Until the theories of innovation are tested in non-U.S settings, the U.S researchers will have little confidence about the generalizability of their models. Hence, given the importance of Asian settings, investigation of employee innovative behaviors and its relation with psychological capital, in Pakistan, is important.
Innovative Behaviors The growing work demands to identify new ways of doing things have called upon enhancing creative and innovative behaviors at the workplace. Creative and novel ideas are the basis for innovations in organizations (Amabile, et al., 1996; Scott & Bruce, 1994; Woodman, Sawyer, & Griffin, 1993), which are required for nearly all jobs (Shalley, Gilson, & Blum, 2000; Shalley & Gilson, 2004), for organizations of all types (Damanpour, 1991) and are important for sustained organizational performance and effectiveness (Nonaka, 1991; Oldham & Cummings, 1996; Zhang & Bartol, 2010). According to Janssen (2004) innovative behaviors are defined as ―the intentional creation, introduction, and application of new ideas within a work role, group, or organization, in order to benefit role performance, the group, or the organization‖ (p, 202). Creativity is although necessary but not a sufficient condition for organizational innovation to operate. These innovative behaviors require a broad variety of cognitive and socio-political efforts on the part of individuals (Kanter, 1988). Creative ideas are the basis for all innovations (Scott & Bruce, 1994), which are developed, promoted,
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Ref No. 449 modified, and implemented by individuals (Van de Ven, 1986). Hence, exploration of individual-level determinants of innovative behaviors is of high importance for both theorists and practitioners. An individual‘s innovative behaviors are composites of complex behavioral tasks including idea generation, idea promotion, and idea realization (Kanter, 1988; Scott & Bruce, 1994; Janssen, 2000, 2001), that are demonstrated in different stages of development (Kanter's 1988) and are characterized by discontinuous activities (Kanter, 1988; Schroeder, Van de Ven, Scudder, & Polley, 1989); individuals may be involved in any combination of these behaviors at any time (Scott & Bruce, 1994). Moreover, all type of innovations start with idea generation phase that is, the generation of novel and useful ideas in any domain (Amabile et al., 1996; Kanter, 1988; Mumford, 2000; Woodman, Sawyer, & Griffin, 1993). The next phase is the idea development that is, mobilizing support and acquiring approvals from peers and/or supervisor to support the idea (Galbraith, 1982; Kanter, 1983, 1988). The last phase relates to the idea realization, that is, transforming these ideas into useful applications within a work role, a group, or the entire organization (Kanter, 1988). At times, individuals may be required to spend substantial cognitive efforts in generating, promoting, and realizing innovative behaviors (Janssen, 2004). Given their demanding nature, these behaviors may have the potential to trigger stress among the individuals. Similarly, the innovative behaviors involve creation of novel things, they are change-oriented (Spreitzer, 1995; Woodman et al., 1993). Thus, individual‘s psychological resources may be of high importance to be utilized in demonstrating innovative behaviors.
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Psychological Capital In recent years, organizational behavior research has taken a slight shift from seeing individuals as coping with negative weaknesses to those enhancing their positive strengths and well-being at the workplace. Seligman and Csikszentmihalyi (2000, p. 8) posit that ―No longer do the dominant theories view the individual as a passive vessel ‗responding‘ to ‗stimuli‘; rather, individuals are now seen as decision makers, with choices, preferences, and the possibility of becoming masterful, efficacious, or, in malignant circumstances, helpless and hopeless‖. Meanwhile, a growing body of positive-oriented research has advanced the exploration of the wellness and wellbeing of humans in general and in particular to its relevance to workplace. This body of knowledge includes Positive Organizational Behavior (POB; Luthans, 2002a, 2002b; Luthans & Youssef, 2007; Luthans, Youssef, & Avolio, 2007b; Nelson & Cooper, 2007) Positive Wellbeing (PWB; Wright, 2003, 2005; Wright & Bonett, 2007), and Positive Organizational Scholarship (POS; Cameron & Caza, 2004; Cameron, Dutton, & Quinn, 2003). Derived from this line of thinking, psychological capital has emerged as a positive oriented higher order construct (Luthans, 2002 a, 2002b; Luthans & Youssef, 2007). The higher order psychological capital is defined as ―An individual‘s positive psychological state of development and is characterized by:(1) having confidence (self-efficacy) to take on and put in the necessary effort to succeed at challenging tasks; (2) making a positive attribution (optimism) about succeeding now and in the future; (3) persevering toward goals and, when necessary, redirecting paths to goals (hope) in order to succeed; and (4)
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Ref No. 449 when beset by problems and adversity, sustaining and bouncing back and even beyond (resilience) to attain success‖ (Luthans et al, 2007b: p. 3). Positive psychological capital (PsyCap) has been found to be related to various job outcomes such as job performance (Luthans, Norman, Avolio, & Avey, 2008; Luthans, Avolio, Avey, & Norman, 2007), job satisfaction (Luthans, Avolio, et al., 2007), job stress (Avey, Luthans, & Jensen, 2009), turnover intentions (Avey, Luthans, & Youssef, 2010), cynicism (Avey, Wernsing, & Luthans, 2008), absenteeism (Avey, Patera, & West, 2006) and organizational commitment (Larson & Luthans, 2006).
Theory and Hypotheses Case for PsyCap and Innovative Performance Considerable amount of research has focused on dispositional factors that may stimulate innovative behaviors at the workplace. There are certain personality factors that have been found to be related to creative behaviors at the workplace. These personal factors include innovativeness (Flynn & Goldsmith, 1993), creative self-efficacy (Tierney, & Farmer, 2002), extraversion (Furnham, & Bachtiar, 2008) openness to experience (Feist, 1998, 1999; Furnham, & Bachtiar, 2008; George, & Zhou, 2001), emotional creativity (Averill, 1999) and positive affect (Isen, Daubman & Nowickia, 1987). Although few attempts have been recently made to investigate the relationship between positive psychological resources and creativity, however, these resources have been separately linked with creativity or innovation related outcomes. For example, Rego, Machado, Leal, & Cunha, (2009) investigated the relationship between hope and
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Ref No. 449 creativity. Rego, Sousa, Marques, & Cunha (2011) investigated the relationship between optimism and creativity. Similarly, Tierney, & Farmer, (2002) investigated the relationship between efficacy and creative performance. Despite this amplified attention, there has been only limited progress in understanding the role of psychological capital in predicting innovative behaviors. Extant theory suggests that positive psychological resources of efficacy, hope, resilience, and optimism do not act in isolation, instead they provide support to each other through an underlying shared mechanism (Fredrickson, 2001; Hobfoll, 2002; Magaletta, & Oliver, 1999; Youssef & Luthans, 2007), hence they should be studied collectively (Luthans, Avolio, Avey, & Norman, 2007). Empirical research also supports the notion that studying PsyCap as a core construct predicts job outcomes better than any of its individual components (Avey, Luthans, & Jenses, 2009; Luthans, Avolio, Walumbwa, & Li., 2005, Luthans, Avolio, Avey, & Norman, 2007; Sweetman, Luthans, Avey, & Luthans, 2010).
Dimensions of PsyCap and Innovative Performance To shed more light on the dimensions of psychological capital, their particular relevance to workplace innovative behaviors and job stress, we now discuss the components of psychological capital and their link with innovative behaviors and job stress. Hope: Hope is the first component of core psychological capital defined 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, Irving, & Anderson, 1991, p. 287). Hope possesses the willpower to perform creatively
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Ref No. 449 and the waypower to creatively explore multiple pathways to reach the goals (Larson & Luthans, 2006; Luthans, Youssef, & Avolio, 2007; Snyder, 2000; Snyder, Lapointe, Crowson, & Early, 1998), thus, increasing the cognitive efforts towards goal attainment (Snyder, 1994). According to Snyder et al. (1998) high hope individuals use agentic (goal directed) thinking to move along a pathway and continuing to progress along. This agency and pathway thinking is iterative in nature (see Snyder, Harris, et al., 1991). Hope has been found to be associated with academic and athletic performance, mental and physical health, and ability to cope with adversity (Snyder, 2000; Snyder, Irving, & Anderson, 1991; Curry, Snyder, Cook, Ruby, & Rehm, 1997). High hope individuals tend to be independent thinkers (Luthans, Youssef & Avolio, 2007). Hopeful individuals tend to take risks and look for alternative pathways when old ones are blocked (Snyder, 1994, 2002). Hopeful individuals seem more prone to work on creative ideas for solving problems and they look at problems and opportunities from different angels (Zhou & George, 2003). Luthans, Youssef and Avolio (2007, p. 74) have argued, ―hopeful employees tend to be creative and resourceful, even with tight budgets‖. Optimism: Optimism is the second positive resource capacity of psychological capital. Optimistic individuals relate negative events as external (not my fault), unstable (occurred this time only), and specific (this event only), while pessimists interpret the same events as internal, stable, and global (Peterson, 2000; Seligman, 1998). Optimism has been supported as a state-like, malleable construct that is open to development (Seligman, 1998; Schneider, 2001). Optimism is associated with a variety of individuals outcomes including depression (Seligman, 1998), mental health (Seligman, 1998) burnout (Chang, Rand &
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Ref No. 449 Strunk, 2000). Optimists tend to maintain positive expectations about the results (Avey et al., 2008). Optimistic individuals appraise daily hassles in a positive way by expecting gain or growth from such events (Fry, 1995). These individuals have the ability to cope with stress (Scheier, & Carver, 1985; Strutton, & Lumpkin, 1992) Similarly, optimists keep on working hard and coping actively with the problems they face while pursuing desirable outcomes. (Carver & Scheier, 1981; Kluemper, Little, DeGroot, 2009). Optimists tend to take credit of and expect positive events in their lives and distant themselves from unfavorable life events. Hence, it is less likely that these individuals experience self-blame and despair when working on innovative solutions for their problems. Recently, Rego et al. (2011) found that optimism had a direct positive effect on creativity. Finally, Optimistic leaders pursue new and creative approaches towards problems solving (Peterson, Walumbwa Byron, & Myrowitz, 2008). Self-Efficacy: Relevant to the workplace, self-efficacy is defined by Stajkovic and Luthans (1998b, p. 66) as ―the employee‘s conviction or confidence about his or her abilities to mobilize the motivation, cognitive resources or courses of action needed to successfully execute a specific task within a given context‖. In a meta-analytic study, Stajkovic & Luthans (1998a) found that self-efficacy had a strong positive relationship with work-related performance (also see; Bandura, 2000; Bandura & Locke, 2003) even in the absence of feedback (Judge, Jackson, Shaw, Scott, & Rich, 2007). According to Bandura and Locke (2003), self-efficacy beliefs help to persevere in the face of obstacles and cope with distressing and self-debilitating emotional states that hinder in the execution of activities. Efficacious individuals are inventive, resourceful (Bandura, 1986) as well as creative (Amabile, 1996; Tierney & Farmer, 2002).
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Resilience: Resilience is the fourth component of positive psychological capital 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). Resilient individuals have the ability to positively cope and adapt during risk and adversity (Masten, 2001; Masten & Reed, 2002). According to Bandura and Locke (2003, p. 92) ―resilient belief that one has what it takes to succeed provides the necessary staying power in the face of repeated failures, setbacks, and skeptical or even critical social reactions that are inherently discouraging‖. Even during highly changing and uncertain situations, resilience helps individuals to become flexible and adapt themselves (Coutu, 2002). According to Tugade, & Fredrickson, (2004) resilient individuals tend to bounce back from setbacks and difficult situation. Resilient individuals are optimistic, energetic towards life, curious, and open to new experiences (Block & Kremen, 1996; Klohnen, 1996). These individuals are humorous (Masten 1994; Werner & Smith, 1992; Wolin & Wolin, 1993), and use creative exploration (Cohler 1987). Resilient individuals elicit positive emotions in themselves as well as in others (Fredrickson, 2004) which may help them to create supportive environment that facilitates innovative behaviors. These individuals have to ability to positive adaptation and adjustment to change (Luthans, Youssef, & Avolio, 2007; Masten & Reed, 2002). Resilient leaders are likely to encourage themselves and even their subordinates to take risks and to exhibit innovative behaviors (Peterson, Walumbwa Byron, & Myrowitz, 2008)
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Ref No. 449 High PsyCap individuals are thought to put intentional efforts to produce creative ways of attaining goals. Having relevance to positive organizational change, psychological capital is considered as individual-level higher order factor that facilitates change (Avey, Wernsing, & Luthans, 2008). Individuals high on PsyCap are able to develop new path ways (hope) to attain their goals. These individuals possess the confidence (efficacy) necessary to arrive at desired goals through these alternative paths, have positive attribution and outlook for future (optimism) and are able to bounce back from setbacks (resilience) in case of any difficulty or failure that may arise due to implementing innovative ideas (Avey, Wernsing, & Luthans, 2008; Luthans et al., 2007). It follows that these positive psychological resource capacities may help employees to exhibit innovative behaviors by broadening the options they perceive, and helping them to put on efforts to reach goals using their will-power and way-power even in the face of initial failure and setbacks. Although, the demands for creativity and innovation may provoke stress and frustration among employees (Staw, 1995; Sweetman et al., 2010; Zhou & George, 2003), positive psychological capital has the potential to cope with these stressful demands on one hand, and develop and implement innovative ideas on the other hand. Even at the times of organizational change these individuals show positive engagement and OCBs OCBs (Avey et al., 2008). Together, these resources have cognitive, affective, motivational and decisional components (Bandura, 1997; Bandura, & Locke, 2003; Carver & Scheier, 1999; Peterson, 2000) that help them to successful develop and implement innovative ideas at their workplace.
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Ref No. 449 Besides, High PsyCap individuals, as the definition suggests, possess the cognitive capacity of self-regulation (Bandura, 1997) that provides initiative, proactiveness, and self-discipline necessary to reach their goals (Luthans & Youssef, 2007). Taken together, high PsyCap individuals have a built-in tendency to creatively develop multiple pathways to accomplish their goals and investing their efforts in generating, promoting, and realizing job-related innovative behaviors. Building on the above literature, we hypothesize the following Hypothesis 1: Psychological capital is positively related to innovative performance Hypothesis 2: Psychological capital is negatively related to job stress
Methods Sample and Data Collection Procedures The data was collected through administration of a questionnaire at two banks, head office of a textile firm, and the regional office of a large public telecommunication organization in one of the largest cities of Pakistan. As English is a medium of instruction at college and university levels and people read and understand English, we did not require to translate the questionnaire in local language. We used personal and professional contacts to get initial entry permission from the concerned organizations. The questionnaire also included a cover letter explaining the purpose of the study to the respondents and assuring them of strictest confidentiality. The participation was voluntary and respondents completed self-report version of the questionnaire which included the measures of psychological capital and job stress. The respondents also reported their gender, age, occupational levels, education, and work
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Ref No. 449 experience. The supervisor-report version of the questionnaire was completed by the respective supervisors of each respondent. Both the respondents and their supervisors separately returned the completed surveys to one of the authors. We distributed 300 questionnaires, of which, 237 usable paired (self and supervisor-report) responses were received with a response rate of 79%. The respondents consisted of 79% male, with an average age of 31 (SD = 8.03) years and an average tenure of 4.80 (SD = 6.43) years. The sample represented several occupational levels including 16% entry level (clerical and technical staff) workers, 80% supervisory and middle managers, and 4% upper middle and top-level managers with education levels ranging from 14 years of education to graduate degrees such as MBA. Measures Psychological capital and job stress were measured using self reported responses. However, to avoid self reporting bias issues, creative performance was measured using supervisory rated responses. The responses for psychological capital were taken on 6-point likert-scale with anchors ranging from 1 = ‗strongly disagree‘, 2 = ‗Disagree‘, 3 = ‗Some what disagree‘ 4 = ‗some what agree‘, 5 = ‗Agree‘, to 6 = ‗strongly agree‘. The responses for creative performance was taken on a 7-point likert-scale with anchors ranging from 1 = ‗Never‘, 2 = ‗Rarely‘, 3 = ‗Occasionally‘, 4 = ‗Sometimes‘, 5 = ‗Fairly often‘, 6 = ‗Very often‘, 7 = ‗Always‘. Response for job stress was taken on 5-point scale ranging from 1 = ‗strongly disagree‘, 2 = ‗Disagree‘, 3 = ‗neither disagree/nor agree‘, 4 = ‗Agree‘, to 5 = ‗strongly agree‘. Higher responses obtained against a variable represent higher level of construct.
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Ref No. 449 In addition, respondents were also asked to provide their gender, age (in years), and tenure (in years) on the survey. Following questionnaires were used for the collection of data. Psychological Capital. 24-items questionnaire (PCQ: Luthans et al, 2007) was be used to measure the Psychological Capital. Examples of the items include ―I feel confident analyzing a long-term problem to find a solution‖, ―If I should find myself in a jam at work, I could think of many ways to get out of it‖, ―When I have a setback at work, I have trouble recovering from it, moving on‖, ―When things are uncertain for me at work, I usually expect the best‖. The reliability of Psychological capital measure was α = .83. Innovative Performance. Innovative performance was measured using 6-items from the Janssen‘s (2000, 2001) scale for individual innovative behavior in the workplace that is based on Kanter‘s (1988) work on stages of innovation. Two items on this questionnaire referred to idea generation, two items to idea promotion, and two items to idea realization. Sample items include‖ Creates new ideas for improvements‖, ―Generates original solutions to problems‖ and ―Transforms innovative ideas into useful applications‖. The reliability of innovative performance measure was α = .89. Previous research shows that these three dimensions combine additively to create an overall scale of individual innovative behavior (Janssen, 2001; Janssen, 2004). Job Stress. We used the shortened version of Job Stress Scale (Parker and DeCotiis, 1983) used by Jamal and Baba (1992) The example items included in the questionnaire were ―Sometimes when I think about my job I get a tight feeling in my
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Ref No. 449 chest‖ and ―I have too much work and too little time to do it in‖. The reliability of job stress measure was α = .71. Control Variables. We used age and gender as control variables because of their possible effects on job outcomes (Furnham, & Bachtiar, 2008). A one-way ANOVA comparing innovative performance and job stress across organizations revealed that significant differences in job stress (F = 5.42, p < .02) were found for organization type. Further, post-hoc analyses revealed that the differences were only between the 1 public sector and 3 private sector organizations. Hence, we created a dummy variable (0 = ―Private,‖ 1 = ―Public) to control for the effects of organization type on the analyses reported below. Finally, we included age, gender, and organization type as controls for all outcomes. Results Table 1 shows the means, standard deviations, bivariate correlations, and estimates of reliability (coefficient alpha). The zero-order bivariate correlations between psychological capital, job stress, and innovative performance were in the excepted direction. Psychological capital was negatively related to job stress (r = -.15, p
