When companies devise human resources policies, they tend to see their workers only from a quantitative point of view. But Cristina Simón, dean of the psychology department at the IE University in Spain, argues that firms should also recognize the importance of “psychological capital” within the corporation – the set of positive personality traits that employees exhibit in the workplace. These characteristics can and should be considered assets by managers because they help to determine the results that workers achieve, Simón says in an interview with Universia Knowledge at Wharton.

Universia Knowledge at Wharton: What do you mean by “psychological capital?”

Cristina Simón: When we talk about capital, we’re referring to the entire range of assets that we rely on to grow and make progress. In the same way that we’ve defined financial capital (“what you have”), intellectual capital (“what you know how to do”) and social capital (“who you know”), we understand psychological capital to be “how you are.” That is to say, the entire set of positive personality characteristics that we deploy in our professional life. Put to use in the context of work, those characteristics can make a difference in determining the results we achieve. More specifically, we talk about [such factors as] “will” (motivation to accomplish goals), “realistic optimism” (confidence in the positive outcome of future events), “resilience” (the capacity to face adverse or risky conditions in a sustained way) and “self-confidence” (certainty about our own capacity to achieve the goals that have been set).

It is important to note that everyone can be trained in those four factors — by participating, for example, in their company’s training and development programs.

UKnowledge at Wharton: How does psychological capital affect the world of business?

Simón: The latest research reveals a relationship between the level of a professional’s psychological capital and his or her corporate performance. Especially in times like these, it is clear that those people who have a large measure of resilience and realistic optimism will be more prepared to deal with uncertainty and adversity. In this sense, at the IE School of Psychology, we are beginning a study with [the university’s] alumni network about the relationship between psychological capital and success in a management career.

Likewise, the combination of such traits as will and self-confidence increases the tenacity to achieve goals. People who have these traits also tend to create business visions that are longer-term, which is a fundamental factor in achieving sustainability — one of the primary goals that companies have currently.

UKnowledge at Wharton: Regarding will, optimism, resilience and self-confidence, how important are each of these characteristics for a leader? Which of these is the most important?

Simón: As I said before, the model of psychological capital is quite new, so we haven’t fine-tuned how to measure each of these components or their ideal balance. Tools for measuring psychological capital do exist; and in that regard, the work being achieved by Fred Luthans in the Leadership Institute at the University of Nebraska needs to be mentioned. Luthans is the father of the concept, which is the result of applying the basic principles of what is called Positive Psychology — which deals with studying human behavior in terms of [individuals’] strengths and positive outlook — to the world of work and organizations.

Given the skills that leaders have for exemplifying attitudes and behaviors for their teams, the development of these skills [among managers] can lead to a general improvement in the psychological capital of the entire organization.

UKnowledge at Wharton: From the viewpoint of employees, how do these psychological profiles complement one another?

Simón: As in other sorts of competition, the combinations of these traits in different people who collaborate to achieve a common goal can result in teams that are especially efficient, but which also maintain healthy patterns of social interaction. To some extent, psychological capital can have a multiplier effect when a group of people collaborate.

An especially important aspect of psychological capital is that it leads to higher levels of personal wellbeing, which certainly leads to higher levels of satisfaction at work and more satisfactory environments for employees.

UKnowledge at Wharton: During times of crisis, when jobs are threatened by personnel cuts, how can you maintain such characteristics as will, optimism, resilience and self-confidence? What can a company do in order to avoid burning out its employees psychologically?

Simón: As the term indicates, psychological capital addresses personal factors, and during a crisis [psychological capital] helps people overcome their troubles in a more satisfying way. In any case, I have already mentioned that psychological capital is something that can be developed [in the workplace]. That means that the organization can enable people to view crisis situations with a greater measure of realistic optimism, and with attitudes that are more flexible and more resistant to frustration and depression. Along these lines, the Gallup Organization has developed its “strength-based practice,” which it is successfully implementing in companies. This approach encourages building an organization on the basis of the strengths of its employees, instead of trying to “fix imbalances” between individual personalities and the demands of the organization. This change in focus can have significant consequences for corporate management, and it can be applied in today’s conditions — for example, to decisions about promoting people who are technically very brilliant but have little motivation to pursue the sorts of tasks managers must carry out. Such employees [are often] alienated from those areas where they are strong; they wind up working in areas where they feel uncomfortable and not very competent. This affects the teams they work on and the working climate in general.

UKnowledge at Wharton: How can employees cope with current working conditions more effectively?

Simón: Many employees are distressed because they see a situation of defenselessness, in which their families are at risk and there is financial conflict. This perception of defenselessness, which they experience day by day in a context of uncertainty, is generating important psychological troubles for a large number of workers. Spain’s College of Psychologists reports that the number of requests for appointments [with mental health professionals] to discuss these kinds of issues has shot up by almost 15% in recent months.

Once again, the factors involved in psychological capital – especially resilience and realistic optimism – can help to improve [employees’] perceptions of the economic crisis. More specifically, adopting an optimistic view of conditions — and I am not referring to an illusion about a rosy horizon — can help to improve someone’s personal situation over the long term. The way we perceive the world and our environment is a basic component in our process for making decisions, and we use it to build our future, day by day. The popular saying, “The bottle is half full or half empty,” is a marvelous example of this. When we are aware that we have access to only half a bottle, our vision of what lies ahead — so that we can fill and enjoy the other half of the bottle — is fundamental for guiding our decisions, in both our personal life and at work.

UKnowledge at Wharton: Are Human Resources departments aware of psychological capital? What kinds of measures are they carrying out?

Simón: I believe it is still premature to talk about implementing practices that take into account psychological capital. My view is that training and development programs — and certainly coaching professionals — will begin to extend this concept throughout organizations.

Although the model is still quite new, and it is too early to generalize about results, it is very likely that the concept of psychological capital will substitute for emotional intelligence as a tool for developing managers and employees. That’s because it addresses two goals: generating better results and, more importantly, creating a healthier working environment.