Impact of Psychological Capital on Organizational Effectiveness: Role of Positive Psychology at Work

Abstract

Achieving organizational effectiveness is the ultimate purpose of any organization that takes enormous effort to maximize employees task efficiency, commitment, and sustain intrinsic motivation to perform well in difficult times. This is why recent efforts to improve organizational performance have begun to inculcate positive organizational concepts like trust, engagement and psychological capital (PsyCap). The purpose of this paper is also to examine the significance of psychological capital (PsyCap) in the prediction of organizational effectiveness and how positive psychological strengths and capabilities motivate employees to perform more than their job description that leads to organizational efficiency. The study has been conducted on a sample of 200 IT professionals. Data analysis was performed using correlation analysis and SEM. The results indicated positive and significant correlation between PsyCap and organizational effectiveness with calculation r = 0.50 (significant at 0.01 level). Regression analysis, basic descriptive analysis, Confirmatory factor analysis, model fit analysis were performed. Results revealed positive impact of PsyCap on Organizational Effectiveness. Moreover a fit model was also identified between PsyCap and organizational effectiveness with both constructs factors. The finding suggests PsyCap is a significant predictor, along with other variables in fostering organizational effectiveness.

Keywords: Psychological Capital, Organizational Effectiveness, Positive Psychology

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