A Longitudinal Examination of the Association Between Psychological Capital, Perception of Organizational Virtues and Work Happiness in School Staff

One major source of strategic capital in today’s information and knowledge-driven society is people (Lorange 2005). Certainly, the nature of business has shifted from a concentration on financial capital to a concentration on human capital (Bartlett and Ghoshal 2002), suggesting that an organization’s people are critical to its innovation, performance and competitiveness. As such, employee wellbeing has gained recognition as an important outcome that organizations need to foster if they are to make best use of the capacity of their human capital and perform well.

Increasing evidence from the field of positive psychology suggests that optimal levels of wellbeing influence positive outcomes for employees and organizations. Wellbeing in employees has been related to their levels of engagement (Harter et al. 2003), organizational citizenship behaviors (LePine et al. 2002) and overall career success (Boehm and Lyubomirsky 2008). For organizations, employee wellbeing is linked with customer satisfaction, (Giardini and Frese 2008) productivity, presenteeism, and effort at work (Keyes 2005); lower voluntary turnover (Wright and Bonett 2007) and fewer absenteeism/sick days (Keyes 2005). Organizations who develop employee wellbeing receive a positive return on investment through reduced absenteeism and compensation claims (Price Waterhouse Coopers 2014). As such, it is in the interest of organizations to intentionally develop employee wellbeing.

Happiness and wellbeing at work has been defined in a number of ways. Definitions include: the presence of positive experiences and absence of negative experiences (Cotton and Hart 2003); workplace affect and job satisfaction (Page and Vella-Brodrick 2009) and more broadly as a positive state of mind arising from one’s experiences at work (Page 2005). Fisher (2010) proposes that happiness at work should be treated as a multidimensional concept, and argues that measures of work happiness such as job satisfaction (Locke 1976), positive affect (Fisher 1997) and thriving and vigor (Spreitzer and Sonenshein 2004) are too narrow. She proposes a higher-order approach to conceptualizing ‘work happiness’ and suggests it is the combination of three aspects: (a) engagement with the work itself; (b) satisfaction with the job and, (c) feelings of affective commitment to the organization as a whole. This multi-dimensional model of work happiness parallels recent developments in wellbeing theory to multi-dimensional frameworks (e.g. Huppert and So 2013; Seligman 2011).

Each of the individual elements of Fisher’s (2010) model of work happiness has a conceptual and theoretical evidence base. Work engagement is defined as comprising cognitive, affective and behavioral elements in relation to an individual’s performance of their job role (Schaufeli and Bakkar 2003). Engaged employees have influence over events in their lives through their energy and self-efficacy (Bakker and Demerouti 2008), they create their own positive feedback through their positive attitude and activity level, and consider work to be fun (Gorgievski et al. 2010). Job satisfaction is defined as “an evaluative state that expresses contentment with, and positive feelings about one’s job” (Judge and Kammeyer-Mueller 2012, p. 347). This suggests that it includes both cognition (contentment) and affect (positive feelings), and that overall job satisfaction is the result of a process of evaluation of individual job facets or characteristics. Evidence suggests that high levels of job satisfaction relate to job performance (Judge et al. 2001), and psychological and physical health (Faragher et al. 2005). Affective organizational commitment is an organization member’s emotional attachment to, identification with and involvement in the organization (Meyer and Allen 1984; Allen and Meyer 1990). Employees with high levels of affective commitment have been found to have higher job performance and organizational citizenship behaviors, and lower absenteeism and intentions to quit (Meyer et al. 2002).

By presenting work happiness as a higher-order construct that comprises the unique and shared variance of these three factors, Fisher suggests that workplace leaders can move beyond boosting each of the variables individually and capitalize on the synergistic effects that occur when the three variables interact. This also allows for more sustainable ways to promote work happiness because if an employee is low on one aspect of work happiness (e.g., engagement) but has high levels of the other elements (e.g., satisfaction and commitment) they can still achieve happiness at work.

To date, Fisher’s higher-order conceptualization of work happiness has not been tested empirically; thus one purpose of this study is to provide an initial test of the model. This is needed because Fisher’s model has practical implications for how leaders increase the work happiness of their staff. The traditional approach to increasing happiness has been for researchers and leaders to create change in a raft of the antecedents that have been previously shown to influence engagement, satisfaction and commitment respectively. For example, evidence suggests that numerous factors relate to greater work engagement, such as relationships with colleagues, performance feedback, skill variety, autonomy, learning opportunities, resilience, personal attachment, and supervisor and co-worker support (e.g., Albrecht 2010; Armutlulu and Noyan 2011; Bakker and Demerouti 2008; Hackman and Oldham 1976; Hobfoll et al. 2003; Judge et al. 2004; Morrow 2011). Such research has provided leaders with a large ‘shopping list’, and it is not surprising that leaders may feel confused by what to do or feel that their approaches are overly complex. For example, how do leaders decide whether to change job characteristics or improve employee attachment or be more considerate themselves as leaders? Instead, by using a higher-order approach to work happiness, leaders can adopt a more parsimonious approach to creating the conditions for employee work happiness.

In this study, we propose that Sloan’s (1987) dual-intervention approach can be used to foster work happiness. Sloan (1987) suggests that organizational-level factors such as culture may influence participation in and outcomes of workplace health promotion programs and also proposes that individual-level interventions are required. That is, both top-down, organizational factors and bottom-up individual-level factors matter. The current study examines the naturally occurring relationships between the top-down variable of employee perception of organizational virtue and the bottom-up variable of employee psychological capital on work happiness over time. See Fig. 1.

PsyCap has been empirically linked to a number of desirable employee outcomes including: improved performance in the workplace (Luthans et al. 2005, 2007), lower employee absenteeism (Avey et al. 2006), higher job satisfaction, (Luthans et al. 2007), organizational commitment (Luthans and Jensen 2005) and psychological wellbeing (Avey et al. 2010). However, the relationship between PsyCap and Fisher’s (2010) work happiness has not been tested.

In addition to this individual-level factor, Sloan (1987) advocates that leaders must look at organizational-level factors that may influence workplace health. The current study thus examines the influence of work environment; specifically the presence of virtues, on employee happiness at work. Virtues are positive traits representing the best of the human condition such as hope, optimism, kindness and curiosity, which have been shown to be valued across time and culture (Peterson and Seligman 2004). Park and Peterson (2003) suggest that counterparts are present at the organizational-level that embody the moral characteristics of the organization and are an enduring part of its culture.

Within the field of positive organizational scholarship, Cameron et al. (2003) proposes that virtuousness in an organization is operationalized via the behaviors’ of individuals and through workplace processes and practices. Research by Cameron et al. (2004) suggested that organizational virtuousness (OV) is a higher-order construct that comprises five virtues: (a) organizational forgiveness, through which mistakes are quickly forgiven and used as opportunities for learning; (b) organizational trust, in the courtesy, consideration and respect enacted in the organization and the mutual trust between peers and leaders; (c) organizational integrity, demonstrated by the honesty, trustworthiness and honor that pervade the organization; (d) organizational optimism, in the belief of organizational members that they will succeed in doing well even in the face of challenges; and (e) organizational compassion, through the common acts of compassion and concern that show that people care about each other. Thus, a workplace that embodies OV demonstrates values such as forgiveness, trust, integrity, optimism and compassion both in the behavior of individual employees and through the processes and practices in the workplace. Research across multiple industries has found that the presence of organizational virtuousness correlates with greater improvement in indicators such as profitability, quality, productivity, customer satisfaction and employee retention (Cameron et al. 2004). However, the relationship between organizational virtuousness (OV) and Fisher’s (2010) higher order factor of work happiness has not been tested.

The current research examines relationships between employee PsyCap, perception of OV and work happiness in school staff. There has been growing interest in the study of wellbeing in schools in recent years as interventions from positive psychology have been applied and tested in school environments in what has become known as Positive Education (e.g. Seligman et al. 2009; Norrish et al. 2013; Waters 2011; Kern et al. 2014a). The focus of this work however, has mainly been on improving student wellbeing and associated outcomes. Yet the staff are equally important to creating wellbeing in a school environment. Indeed, Rowe (2003) proposes that teachers are the most valuable resource available to a school. Barber and Mourshed (2007) argue that, “the quality of a school system rests on the quality of its teachers” (p. 14). A significant body of research indicates that other than the student themselves, teachers are the most important influence on student learning (Hattie 2003; Rowe 2003). Beyond the value of teaching staff, others at the school in non-teaching roles can also be beneficial role models for students and help to create and support a positive school environment (Kern et al. 2014b).

Bringing together the top-down perspective of positive organizational scholarship with the bottom-up approaches of positive organizational behavior, this study examined the combined effect of employee PsyCap and perception of virtue in the organization (OV) on work happiness. The examinations were performed cross-sectionally and prospectively across a 15 month period. Taken together, the regression analysis, path analysis models, and work happiness mean score comparisons suggest that work happiness can be predicted directly and separately by PsyCap and OV (within and across time). Further, a synergistic effect between the constructs may exist, although this effect is seemingly limited by a ceiling effect with the measures used in this study.

Within and across time, PsyCap and OV were positively associated with one another. It may be that increased PsyCap enables employees to see virtues in their work environment more explicitly. For example, an optimistic employee believes that good things will happen to them (Carver and Scheier 2002). This may influence their motivational state and lead to evaluative processes that allow them to more clearly see the presence of the virtue of optimism in their organization. For example, if a leader introduces a new virtues-based practice at work, employees with high optimism may have a positive predisposition to see the virtue in that new initiative. The underlying explanation for this rests on the idea of attitudes. Attitudes have been found to help categorize objects (Smith et al. 1996), assist decision-making ease (Blascovich et al. 1993) and decision-making quality (Fazio et al. 1992). Thus employees with optimistic attitudes could be more likely to evaluate virtuous practices and policies within the organization through a lens of optimism.

Both PsyCap and OV were also correlated with greater reported work happiness, cross-sectionally and over time. Employees with high PsyCap are hopeful and have positive expectations about future outcomes and they have greater confidence in their ability to deal with challenges and higher levels of resilience. This may provide them with the resources to perform well in their job, thus enabling and supporting their work happiness.

Past research has considered individual-level aspects of organizational climate (e.g., gratitude or trust or compassion) and how these influence worker wellbeing/happiness. Waters (2012) found a significant association between gratitude as a cultural variable at work and levels of job satisfaction in employees. Further, there is evidence that experiencing compassion at work increases member experience of positive emotions (Lilius et al. 2012). Finally, organizational trust has been shown to have a positive relationship with employee satisfaction (Dirks and Ferrin 2001; Rich 1997) and their levels of organizational commitment (Brockner et al. 1997; Dirks and Ferrin 2001).

Past research as also shown that workplace culture influences employee levels of emotional wellbeing (Hartel and Ashkanasy 2011). The current study found that perception of a virtuous culture was related to the work happiness of employees. Organizational virtuousness can be considered as a virtues-based culture that manifests through observable artefacts, espoused values, shared beliefs and collective behaviors. For example, virtues-based practices such as gratitude boards (to support compassion and optimism) or leaders beginning meetings with ‘what went well’ exercise (to support optimism and trust) provide observable artifacts of the virtuous culture and opportunities to foster virtues through espoused values. Moving deeper than the use of practices, other elements of culture, such as shared beliefs and collective behaviors may be influenced by embedding virtues in organizational behaviors, leadership (Cameron et al. 2011), engaging in strengths-based performance conversations (Bouskila-Yam and Kluger 2011) and infusing virtues into training, development and coaching. Together, these virtue-infused elements of culture may provide organizational resources that influence the quality of relationship between the organization and employee such that their happiness at work increases. For example, a workplace culture in which leaders are optimistic about the future, compassionate in their communication and forgiving when needed, may help develop supportive leader-worker relations and a supportive work community; relationships and community are social resources that may help to develop employee happiness at work (Fisher 2010).

Haidt’s (2000) elevation hypothesis can also be used to explain the study results. Employees who perceive more virtuousness in the behavior of colleagues and see more virtue in organizational practices, may be motivated to behave more virtuously themselves. This virtuous behavior can lead to positive core self-evaluation and resilience. Given the link between virtuous behavior and wellbeing that has been established in past research (Proudfoot et al. 2009) this may explain why the current sample of employees reported a relationship between their perception of OV and happiness at work.

When turning to the longitudinal data, the associations between PsyCap, OV, and work happiness were not as strong over time as those within the same time-points. These results provide a temporal understanding of the associations between the variables, which has practical implications for organizations.

Both independently and together, PsyCap and OV had a stronger association with work happiness over time than either variable alone. This suggests that top-down influences on employee work happiness (e.g. the use of positive practices, Cameron et al. 2011) and bottom-up influences on work happiness (such as developing employee PsyCap) have independent and synergistic associations. Therefore, organizations need to focus efforts on developing both individual-level resources (PsyCap) and organizational-level resources (virtues present in the organization, OV) to support employee wellbeing.

The current research has a number of limitations. The correlational design of the study limits our ability to draw conclusions about causality of the associations between PsyCap, OV, and work happiness. For example, within-time results showed significant associations between the three variables, however because of the correlational study design, we cannot draw conclusions about whether higher PsyCap causes employees to have higher levels of work happiness; whether higher levels of work happiness causes people to have higher PsyCap or whether there is a third unidentified variable that underlies the associations. It may be, for example, that employee attitudes are an underlying mechanism that if tested would provide a better understanding of how employee PsyCap and OV influence work happiness over time. Future research should investigate attitudes as a possible underlying mechanism in order to more fully understand the complexity of these relationships. Measures were also self-reported, and method variance could influence correlations. The use of objective measures of organizational virtues or workplace happiness will be valuable in the future.

The main outcome variable, work happiness, is built upon Fisher’s (2010) model. To date, there is not a single measure that assesses the three inter-related domains proposed by the model. The current study therefore combined three psychometrically validated measures to approximate such a measure. Although the items provided some support for Fisher’s model, model fit could be considerably improved, to the extent that the very strong correlations amongst study variables could reflect inadequate measurement of the underlying constructs. Further testing of Fisher’s model, with a related valid measure, is needed.

The study was conducted with employees who work in a school following the growing interest in positive education to study staff wellbeing in addition to the current major focus of positive education on student wellbeing (Kern et al. 2014a; Kristjánsson 2012; Waters and Stokes 2015). While the use of this sample adds to the file of positive education it may not be generalizable to workers from other sectors.

Despite these limitations, the study has a number of strengths. The study provides a first empirical test of Fisher’s (2010) theory of employee work happiness. It includes both top-down organization aspects and bottom-up employee aspects thus responding to Sloan’s (1987) idea of dual-intervention. The longitudinal nature of the study provides a valuable temporal understanding to the patterns of the associations between PsyCap, OV, and work happiness. The quantitative analysis is appropriate to examine associations between PsyCap, OV, and work happiness to see what naturally occurs without intervention efforts (Creswell 2003).

Over recent years there has been increasing evidence that links employee happiness to a broad range of positive individual-level and organizational-level outcomes (Fisher 2010). This has led organizations to value the importance of employee happiness and to want to know how it is that employee happiness can be increased (Fisher 2010). The current research adopted Sloan’s (1987) dual-intervention approach and examined the interrelationships between employee happiness with a bottom-up, individual-level variable (psychological capital) and with a top-down, organizational-level variable (organizational virtue) within and between three time-points. Rather than study a multitude of individual-level variables and how they relate to individual-level aspects of happiness at work, the current study examined three higher order constructs that have recently been proposed in the fields of POS and POB. The higher order approach allows for shared variance between individual constructs and, ultimately provides a more parsimonious way for approach for studying associations amongst these constructs.

By investigating these interrelationships between work happiness, PsyCap and organizational virtues with a sample of school employees, the study integrates aspects of the fields of positive organizational scholarship, positive organizational behavior and positive education. In an applied setting, the results can be used to help schools and other organizations understand the importance of developing the personal resources of employees (PsyCap) and the culture of the organization to enhance employee work happiness. We hope this study inspires further research into the factors that influence employee happiness at work.