By Luca Martinelli | 22-23

In the last twenty years companies have seen an exponential increase in the frequency and magnitude of organisational change due to global factors (e.g. the 2008 financial shock, Covid-19 and the wars in Ukraine and Israel) which contributed to widespread economic and social crises (UK Government, 2023). Therefore, organisations need to provide the right conditions for their employees to become more resilient in the face of these challenges. However, on average, only 30% of employees say their managers tolerate small-scale failures or encourage dissent and debate, only 50% find their job fulfilling, and 20% report their workload is unmanageable, leading to burnout (PwC, 2023b). Mental health issues are on the rise and are responsible for years of disability, having significant impact on treatment costs and productivity (McKinsey, 2022; Gaillard et al., 2020).
How can organisations promote the right conditions for their employees to flourish in a dynamic environment and which resources should employees cultivate to maximise their well-being and performance?
Job Demands-Resources theory (JD-R) provides a framework to increase employees’ work engagement, well-being and performance. JD-R proposes a two-legged mechanism where job demands (e.g. workload and time pressure) play a role in the development of exhaustion, while job resources (e.g. task variety, job control and colleagues’ support) and personal resources (e.g. optimism and self-efficacy) play a combined role in the development of motivation, decreasing or increasing work engagement and performance, respectively (Bakker et al., 2023).
Figure 1: The Job Demands-Resources model (Bakker et al., 2023)

Employers may be more inclined to maximise the use of job resources, keeping job demands constant, if productivity and financial targets do not allow job demands to be reduced (McKinsey, 2022). Thus, this study focused on which sets of job and personal resources are more effective at positively influencing well-being and performance (the green circuit in Figure 1).
Psychological Capital (PsyCap) is a set of personal resources, known by the acronym HERO, which have a positive relationship with well-being and performance (Luthans & Youssef-Morgan, 2017):
- Hope is the willpower to pursue identified goals through the generation of alternative pathways.
- Efficacy is the belief in the ability to take on and put in adequate effort to succeed at specific tasks.
- Resilience isthe attitude of bouncing back from setbacks, and the positive adaptation to move beyond, to attain success.
- Optimism is the positive internal attributions of life and work events, with the expectation that desirable outcomes will result through active efforts.
This study identified which job resources establish the best conditions for PsyCap to manifest. Job autonomy, control, influence over decision and supervisory support, were all identified as PsyCap antecedents. Employees who experience high level of autonomy and support are more likely to have higher confidence in their ability to pursue valued goals until they succeed (Avey, 2014).
Key results
Job resources. The study found that job autonomy and control, leaders support, and a more democratic power distribution, increase employees’ sense of belonging and agency, which in turn affect employees’ engagement, performance and individuals’ general well-being.
PsyCap. Psychological capital plays a key role in influencing work engagement, well-being and performance on its own, but also leveraging available job resources to increase job performance. For example, when employees feel empowered by their organisations to try new ways to perform work activities, their levels of self-efficacy and optimism increase, positively affecting engagement and performance.
The hero among the HERO. PsyCap facets differentially affected the relationship between job resources and work engagement, well-being and performance:
- Hope positively contributed to work engagement and well-being. Hope is the motivational engine that prompts individuals to pursue valued goals, both within and outside of work (Snyder, 2002). Job autonomy and decision latitude activate employees’ sense of agency, prompting them to plan their goals and experiment suitable pathways to pursue those goals.
- Efficacy positively affected job performance. A work environment that allows individuals’ abilities to be applied and exploited, as opposed to one that stultifies individuals’ autonomy and decision making, fosters individuals’ confidence in their ability to execute specific tasks successfully, translating into higher performance (Bandura, 2000).
- Resilience. Although the synergistic effect of HERO on well-being was positive, resilience alone played the opposite role in affecting employees’ well-being. For example, resilient individuals may have experienced traumas which made them more effective at reacting, but also more sensitive, to negative events. Although in the long term this may be associated with higher well-being, in the short term negative experiences may leave them temporarily scarred, lowering their well-being (The Young Foundation, 2012; Bonanno, 2021).
- Optimism played a dual role in enhancing work engagement and well-being, while negatively influencing performance. Optimism is the individuals’ internal attribution of positive work and non-work outcomes. Individuals who are supported by their leaders and are in control of their decisions are more likely to be actively engaged at work, increasing their sense of purpose and boosting their expectations of achieving positive outcomes (Luthans et al., 2015). However, there could be circumstances where more optimistic individuals may not foresee the pitfalls that lay ahead their chosen pathways, blinded by their self-beliefs, with a negative impact on performance (Norem & Chang, 2002). Conversely, proactive pessimists harness their anxiety by carefully planning potential outcomes in response to threatening situations, with a positive impact on job performance (Perkins & Corr, 2005).
What can organisations do?
For instance, organisations could carry out organisational-level interventions, such as job redesign or management training, to foster a psychologically safe environment supportive of more democratic decision-making processes. These favourable conditions prompt employees to take calculated risks and experiment different ways of working, positively impacting their productivity (Holman et al., 2018). Equally, companies could use individual-level interventions to increase employees’ personal resources, indirectly benefiting well-being and performance (Meyers et al., 2013). For example, a two-hour PsyCap intervention was found to save time and achieve a higher ROI compared to other individual-level interventions (Luthans et al., 2006b). Here, employees identify relevant goals and note down alternative pathways to reach those goals, increasing hope (vision and purpose) and resilience (the determination to achieve those goals despite setbacks). Then, they present their goals to a group of colleagues who are encouraged to provide constructive feedback, increasing employees’ self-beliefs (through modelling) and optimism (positive expectation that their goals are achievable).
A word of warning may need to be given to companies to avoid one-size-fits-all approaches which may be suboptimal for some employees. Companies may need to develop bespoke interventions which consider individuals’ specific circumstances. There may be instances where too much of a positive state (e.g. being too optimism or too resilient) may backfire, temporarily affecting performance and well-being.
References
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Bakker, A. B., Demerouti, E., & Sanz-Vergel, A. (2023). Job demands-resources theory: Ten years later. Annual Review of Organizational Psychology and Organizational Behavior, 10(1), 25-53. https://doi.org/10.1146/annurev-orgpsych-120920-053933
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