IMPACT OF PSYCAP ON EMPLOYEE ENGAGEMENT & ORGANIZATIONAL EFFECTIVENESS

Abstract

Organizations are a hallmark of society. Modern societies produce and distribute goods and services, educate people, provide health care and so on- by using special purpose organizations. How well these organizations perform their work consequently affect how well societies accomplish their objectives. Specially, in case of developing nations, it has been suggested that a major task facing these nations is to develop a system which can make the operation of old organizations and newly emerging organizations more and more effective to meet ever-changing demands. Human beings are the main assets of any organizations. Organizations may have a sophisticated technology, a huge amount of capital, and other resources but without dedicated workforce, these resources cannot be utilized to their fullest extent. In order to achieve that, human capital has received a tremendous attention and encouragement with the arrival of the Positive Psychology Movement in approximately every ambit of human existence including organizations as well. Organizational psychologists, who follow the positive psychology approach, propagate the investment of focused efforts and energies towards enabling employees to align their personal goals with organizational goals. With this view in line, the current research is an attempt to study the link between Psychological Capital (PsyCap), Employee Engagement and Organizational Effectiveness. Till date, a couple of empirical studies have found a positive connection between PsyCap and work attitude, job satisfaction, performance, and organizational commitment but the relationship of employee engagement and psychological capital with organizational effectiveness has so far not been dealt with by any research. After reviewing the literature, it has been found that earlier researches were conducted in the USA (Luthans et al.2005) and not in an Indian setting. This study attempts to fill the gap in literature and to identify the correlation between psychological capital and employee engagement with organizational effectiveness. For the purpose of this study, primary responses were assimilated from 484 employees working in India in IT organizations. In order to gain access to such a sufficiently large sample, purposive sampling was chosen for data collection. AMOS©21 and SPSS©17 were used for data analysis. Data were assessed for missing values, linearity, normality, reliability, homoscedasticity and non-multi-collinearity. This study used Exploratory Factor Analysis (EFA) and Confirmatory Factor Analysis (CFA) to check the fitness of the obtained factor pattern on the study sample and the factor structure. Multiple hierarchical regression model iv and Structural Equation Modeling (SEM) was utilized to scrutinize the study hypothesis through a mediation model. The findings of the study are likely to have significant practical implications for Human Resource Management and its future development. Employees who seem to be more buoyant, hopeful, efficacious, and tough may more likely be able to “weather the storm” of dynamic, global environmental conditions that many organizations face today. They may be deemed as more desirable than their counterparts with lesser PsyCap. Even though, this requirement forces organizations for persistent investment in financial, social and human capital at present time. Earlier utility analysis showed that the investment in psychological capital could produce very fruitful yields than other more conventional forms of capital investment (Luthans et al., 2007). From this study, initial evidence can be established that a common core exists within various positive constructs of PysCap, mentioned earlier (Hope, Resilience, Efficacy, Optimism) as they can be measured and related to performance. Further, research in future may unearth other constructs which can be assessed, developed and further investigated with respect to performance enhancement.