Testing a dynamic model of the impact of psychological capital on work engagement and job performance

Purpose. Psychological Capital (PsyCap), consisting of hope, efficacy, resilience, and optimism, is a positive state associated with attitudes, behaviors and performance. The purpose of this paper is to investigate a dynamic mediational model posing work engagement as the mediator of the longitudinal relation between PsyCap and job performance. Design/methodology/approach. Data came from all white collar employees who responded to this study’s variables (n=420) from a comprehensive data set drawn from a large communications service company over two consecutive years. Job performance was rated at the end of each year by the direct supervisor as part of the organizational appraisal system. Findings. Structural equation modeling analysis found that both absolute levels and increases in PsyCap predicted subsequent work engagement increases which in turn predicted job performance increases. Moreover, the mediating role of the changes in work engagement between previous PsyCap and performance change was confirmed over time. Research limitations/implications. There is much to gain in conceptualizing the relations among PsyCap, work engagement and job performance as dynamic, rather than static. The results support the conservation of resources theory, in which employees are motivated to acquire, protect and foster their valued (psychological) resources to attain successful performance outcomes, in order to create a gain cycle of resources (Salanova et al., 2010). Moreover, it provide further empirical validation for the idea that processes, like work engagement, are sustained by personal resources, and that these latter exerts mostly an indirect effect on organizational behavior outcomes (Xanthopoulou et al., 2009b). Practical implications. These results are important from a practical point of view, because they point to the importance of training interventions aimed at developing and sustaining PsyCap as an important determinant of workers’ motivation and behavior within the organization. Considerable literature offers practical insights and guidelines for developing PsyCap (Luthans et al., 2006, 2015; Luthans and Youssef-Morgan, 2017). Originality/value. Despite the demonstrated state-like, dynamic nature of PsyCap, its relationship with performance has mainly been statically analyzed and the role of possible mediating mechanisms largely ignored. This study begins to fill this research gap by investigating the dynamic nature of PsyCap in relation to work engagement and job performance and whether over time engagement mediates the relationship between PsyCap and job performance.