Journal of Occupational Health Psychology © 2010 American Psychological Association

2010, Vol. 15, No. 4, 421– 433 1076-8998/10/$12.00 DOI: 10.1037/a0020720

Feeling Good and Doing Great: The Relationship Between

Psychological Capital and Well-Being
Satoris S. Culbertson and Maura J. Mills
Clive J. Fullagar Hofstra University
Kansas State University

This study seeks to determine the relationship between psychological capital and an employee’s
eudaimonic and hedonic well-being. Panel data were collected from 102 extension agents over a
2-week interval. In addition, daily surveys were collected from 67 of the participants. Results
from the panel data indicated that the relation between psychological capital and hedonic
well-being, measured two weeks later, is mediated by eudaimonic well-being. Results from the
daily surveys found that daily eudaimonic work well-being was significantly associated with both
daily positive mood and daily life satisfaction and that variance in eudaimonic work well-being
was predicted by one’s psychological capital.

Keywords: psychological capital, positive psychology, hedonic well-being, eudaimonic well-being

In recent years, there has been a growing interest in
adopting a positive approach when examining orga-
nizations and organizational behavior (e.g., Luthans,
2002a). Rather than focus on ways to predict negative
outcomes for individuals and organizations (e.g.,
turnover, burnout), researchers have begun to exam-
ine ways in which positive outcomes can be realized
and to identify factors that facilitate individual flour-
ishing and wellness. More specifically, positive or-
ganizational behavior (POB) has been defined as “the
study and application of positively oriented human
resource strengths and psychological capacities”
(Luthans, 2002b, p. 59).
An important construct that has emerged from the
POB movement is psychological capital (PsyCap), a
higher-order constellation of positive psychological
components that consists of efficacy, optimism, hope,
and resilience (Luthans, Avolio, Avey, & Norman,
2007). As described by Luthans, Youssef, and Avolio
(2007), PsyCap is “characterized by (a) having con-
fidence (self-efficacy) to take on and put in the nec-
Satoris S. Culbertson and Clive J. Fullagar, Depart-
ment of Psychology, Kansas State University; and Maura J.
Mills, Department of Psychology, Hofstra University.
A version of this paper was presented at the 24th Annual
Conference of the Society for Industrial and Organizational
Psychology, New Orleans, LA in April 2009. This research
was funded in part by the Center for Engagement and
Community Development, Kansas State University.
Correspondence concerning this article should be ad-
dressed to Satoris S. Culbertson, Kansas State University,
Department of Psychology, 492 Bluemont Hall, 1100 Mid-
Campus Drive, Manhattan, KS 66506-5302. E-mail:
satoris@ksu.edu
essary effort to succeed at challenging tasks; (b)
making a positive attribution (optimism) about suc-
ceeding now and in the future; (c) persevering toward
goals and, when necessary, redirecting paths to goals
(hope) in order to succeed; and (d) when beset by
problems and adversity, sustaining and bouncing
back and even beyond (resilience) to attain success”
(pp. 3). Despite the main impetus behind POB being
to understand those factors that enable individuals to
thrive, little research has investigated the relation
between PsyCap and well-being. Studies that have
examined this relation (e.g., Avey, Luthans, Smith, &
Palmer, 2010) have used a limited conceptualization
of well-being.
Well-being has been defined as “optimal psycho-
logical functioning and experience” (Ryan & Deci,
2001, p. 142) and can be differentiated into hedonic
well-being and eudaimonic well-being (Ryff &
Keyes, 1995; Ryan & Deci, 2001). Hedonic well-
being is the more typical operationalization of well-
being, consisting of subjective happiness and the
experience of pleasure (Ryan & Deci, 2001). It is
typically assessed using subjective measures consist-
ing of life satisfaction, the presence of positive mood,
and the absence of negative mood (Waterman, 2008).
Together, these components are often summarized as
happiness (Diener, 1984). Thus, in the interest of
parsimony, we refer to hedonic well-being as happi-
ness throughout this article.
More recently, there has been a move to broaden
the notion of well-being to include motivational and
behavioral components (Ryff, 1989; Ryff & Keyes,
1995). From a motivational perspective, eudaimonic

421
422 CULBERTSON, FULLAGAR, AND MILLS
well-being focuses on striving for self-realization
(Waterman, 2008). Behaviorally, it includes optimal
positive functioning and the act of striving (Ryff,
1989; Ryff & Singer, 1998). Thus, eudaimonic well-
being involves a sense of fulfillment of one’s poten-
tial, aspects not subsumed in the conceptualization of
happiness. Additionally, eudaimonic well-being is
more cognition-based: An individual is arguably mo-
tivated to take actions because of an underlying cog-
nition regarding what would be of greatest benefit to
the individual and his or her overall positive feelings
and thoughts regarding him or herself.
Building on positive psychological theories of
Erickson (1959) and Maslow (1954); Ryff (1989)
developed a multidimensional conceptualization of
eudaimonic well-being that includes (a) self-
acceptance, understanding and accepting one’s
strengths and weaknesses; (b) purpose in life, having
objectives that give life meaning and direction; (c)
personal growth, a belief that one’s skills and poten-
tial are being realized and enhanced; (d) positive
relations with others, having close and valued inter-
actions with others; (e) environmental mastery, feel-
ing in control of life and able to manage its demands;
and (f) autonomy, being self-determined and owning
one’s actions. Confirmatory factor analysis has em-
pirically confirmed this model and its indication of
the higher order construct of eudaimonic well-being
(Ryff & Keyes, 1995).
It is important to distinguish between PsyCap and
eudaimonic well-being. Despite some overlap (e.g.,
PsyCap efficacy is similar to Ryff’s environmental
mastery), these two constructs are theoretically dis-
tinct. PsyCap can be conceptualized as personal psy-
chological capacities and resources. As such, PsyCap
may serve to support or guide individuals in how they
conceptualize life experiences. Conversely, eudai-
monic well-being is best thought of as optimal pos-
itive functioning—an outcome we hypothesize is in-
fluenced by psychological resources (i.e., PsyCap).
Although Ryff’s (1989) model of eudaimonic
well-being was developed to be context free, Van
Horn, Taris, Schaufeli, and Schreurs (2004) have
drawn extensively on Ryff’s research to create a
comprehensive model of well-being specific to work.
These authors note that Ryff’s approach is more
detailed and inclusive than other approaches to work
well-being in that it incorporates a behavioral com-
ponent in addition to affective and motivational as-
pects. As such, we felt justified in adapting Ryff’s
operationalization to the work context. In the contin-
ued interest of parsimony and given its focus on
optimal positive striving and functioning, we refer to
eudaimonic well-being as positive functioning for the
remainder of this article.
Research has demonstrated that the various con-
stituent elements of PsyCap are related to well-being.
This research supports the contention that positive
cognitive resources inherent in the PsyCap dimen-
sions are associated with the positive affective expe-
rience of well-being. However, such research has
focused on hedonic, at the expense of eudaimonic,
well-being. For example, Luthans, Avolio, et al.
(2007) found that a composite operationalization of
PsyCap was positively related to job satisfaction.
However, the conceptualization of job satisfaction as
indicative of well-being is limited, and a more com-
prehensive assessment is necessary.
POB researchers have developed a set of criteria
for including constructs (Luthans 2002a, 2002b;
Luthans, Avolio, et al., 2007). One of these is that
constructs should be predominantly state-like versus
trait-like. State-like constructs vary situationally and
are open to development. To understand these con-
structs, it is insufficient to rely on between-
individual, cross-sectional designs. Within-individual
variation can only be captured longitudinally. For
example, multilevel modeling (e.g., hierarchical lin-
ear modeling, or HLM) allows researchers to distin-
guish between-individual and within-individual com-
ponents of variance and to ascertain whether
variables are behaving more like states or traits. In
addition, multilevel modeling allows for the study of
the impact of higher-level, individual dispositions on
lower-level, day-to-day well-being.
In terms of well-being, there is evidence that hap-
piness and positive functioning have state-like and
trait-like properties. Research suggests individuals
have an affective “set point” (Heady & Wearing,
1992) or a dispositional mood or attitude level around
which reactions occur. Thus, although daily fluctua-
tions in well-being are likely, there may also be
convergence toward a more stable level. Individuals
also likely vary in their optimal functioning. Ilies,
Morgeson, and Nahrgang (2005) have likened posi-
tive functioning to Csikszentmihalyi’s (1990) con-
cept of flow—the feeling of complete involvement in
an activity such that individuals seemingly forget
everything but the activity itself—which recent re-
search has shown to have daily fluctuations (Fullagar
& Kelloway, 2009). Whether positive functioning
has a similar set-point as happiness remains unclear.
The current research sought to answer three pri-
mary research questions. First, we addressed the
question: To what extent does PsyCap contribute to
an employee’s positive functioning and happiness at
 PSYCHOLOGICAL CAPITAL AND WELL-BEING
a later time? In line with other researchers (e.g., Ryff
& Singer, 1998) who have proposed that affect can be
considered an outcome of positive functioning, we
proposed that positive functioning contributes to hap-
piness and that the relation between PsyCap and
happiness is mediated through positive functioning.
Second, we wanted to determine the extent to which
daily positive functioning and happiness varied to-
gether. Third, we sought to ascertain the relation
between PsyCap and daily positive functioning. We
proposed that positive functioning is related to daily
mood and life satisfaction (measures of happiness),
both across and within individuals. Additionally, we
posited that individual variance in positive function-
ing is associated with one’s PsyCap.
Psychological Capital
According to Hobfoll’s (1989) Conservation of
Resource (COR) theory, individuals seek to acquire
and maintain resources. When these resources are
gained, the result is an increase in well-being. Ac-
cording to Hobfoll, there are four kinds of resources
that can lead to greater well-being, including physical
objects (e.g., one’s home), personal characteristics
(e.g., self-esteem), conditions (e.g., marital status), or
energies (e.g., time, knowledge). We propose that
PsyCap serves as a personal characteristic resource
resulting in increased well-being when at high levels.
PsyCap is comprised of four constituent elements:
efficacy, optimism, hope, and resiliency. Together,
these elements serve as an overarching personal char-
acteristic that positively influences well-being. For
example, PsyCap efficacy is based on Bandura’s
(1997) work concerning beliefs about one’s abilities
to successfully perform a given task. In terms of COR
theory, efficacy can serve as a cognitive resource. For
example, highly efficacious individuals are less im-
pacted by self-doubt, negative feedback, setbacks,
and criticism (Bandura & Locke, 2003). From this
perspective, individuals with a high level of efficacy
would more likely report greater happiness as well as
greater positive functioning.
The second PsyCap dimension is optimism, which
is based on Seligman’s (1998) work and involves an
individual’s positive attributional style about success.
According to Seligman, optimists tend to take credit
for positive occurrences in their lives while providing
external, temporary, situation-specific explanations
to negative occurrences. PsyCap optimism differs
from traditional optimism, however, in that it has the
caveats of being both realistic and flexible. In this
manner, it remains a resource that is not likely to
423
suffer deleterious effects of having “too much of a
good thing.”
According to COR theory (Hobfoll, 1989), PsyCap
optimism would serve as a resource positively im-
pacting happiness and positive functioning. For ex-
ample, in terms of happiness, research on optimism
has demonstrated a positive relation with mental
well-being (Scheier & Carver, 1992) as well as life
satisfaction (Seligman, 2002). Regarding positive
functioning, optimism is linked to behaviors like
coping (Scheier & Carver, 1985). Research has dem-
onstrated that people with superior coping styles are
better able to handle adversity, benefit from chal-
lenge, and flourish (Park, 1998). Thus, such behav-
iors can be deemed optimal functioning behaviors,
likened to positive functioning. Thus, individuals
with high levels of PsyCap optimism are likely to
report greater happiness and positive functioning.
The third PsyCap dimension is hope. Based on
Snyder’s (2000) work, hope involves persevering and
redirecting paths toward goals. Similar to optimism,
hope is likely a resource that influences happiness,
with research demonstrating a link between hope and
subjective well-being (Kato & Snyder, 2005). Addi-
tionally, hope is related to such optimal functioning
behaviors as coping (Chang & DeSimone, 2001) and,
as such, is likely related to positive functioning.
The final PsyCap dimension is resiliency, defined
as “the capacity to rebound or bounce back from
adversity, conflict, failure, or even positive events,
progress, and increased responsibility” (Luthans,
2002a, p. 702). There is evidence that resilience is
related to positive effects on well-being at work. For
example, Maddi (1987) reported a positive relation
between resilience and happiness among employees
undergoing downsizing. Additionally, researchers
have demonstrated a link between PsyCap resiliency
and job satisfaction (Larson & Luthans, 2006) as well
as happiness (Youssef & Luthans, 2007). Thus, we
would expect a high level of PsyCap resiliency is
related to increased happiness as well as greater
positive functioning.
Hypotheses
A primary purpose of our study was to ascertain
the relation between PsyCap and a more compre-
hensive assessment of well-being (see Figure 1).
Avey et al. (2010) recently demonstrated that Psy-
Cap was related to well-being at a later time. Their
focus, however, was exclusively on psychological
well-being (i.e., affective or emotional well-being,
akin to hedonic well-being). Previous researchers
424 CULBERTSON, FULLAGAR, AND MILLS

e11
Res 2

Hedonic .96
e1 Efficacy Well-being Positive
R2=.61 Affectivity
.75

e2 Hope
.77
Psychological .78
Capital
.83
Resiliency .75
e3
.70 Res 1

e4 Optimism Eudaimonic
Well-being
R2=.56
.81
.74 .57
.50 .55 .67

Autonomy Environmental Personal Work Purpose Self

Mastery Growth Relations In Work Acceptance

e5 e6 e7 e8 e9 e10

Figure 1. Standardized estimates for the structural model.

(e.g., Ryff & Singer, 1998) have noted that affect
can be considered an outcome of positive function-
ing, suggesting that positive functioning may be an
intermediate variable between PsyCap and positive
affectivity. Thus, we build on Avey et al.’s finding
that PsyCap is related to happiness, and posit that
the relation can be explained by positive function-
ing.
Hypothesis 1a: PsyCap is positively related to
positive functioning at a later time.
Hypothesis 1b: Positive functioning mediates
the relation between PsyCap and happiness.
A second purpose of our study was to examine
fluctuations in daily positive functioning and hap-
piness and PsyCap’s influence on these daily fluc-
tuations. As described earlier, although there is
evidence that individuals have an affective “set
point” (Heady & Wearing, 1992), individuals are
likely to experience daily fluctuations in their hap-
piness. Indeed, the emotional components of well-
being have been argued to be “quite volatile and
responsive to environmental conditions” (Csik-
szentmihalyi & Hunter, 2003, p. 186). Further-
more, positive functioning conceptually overlaps
with the construct of flow; both tap engagement in
work, a sense of control and purpose, and mastery
over the work environment. Flow has been found
to have daily fluctuations and to be predominantly
state-like (Fullagar & Kelloway, 2009). Conse-
quently we expect positive functioning to also fluc-
tuate daily. Thus, we expected considerable with-
in-individual variance in both daily positive
functioning and happiness.
Hypothesis 2a: Daily positive functioning ex-
hibits both within-individual variance and be-
tween-individual variance with the former ac-
counting for a substantial proportion of the
variance in ratings and indicating state-like
properties.
Hypothesis 2b: Daily happiness exhibits both
within-individual variance and between-individ-
ual variance with the former accounting for a
 PSYCHOLOGICAL CAPITAL AND WELL-BEING
substantial proportion of the variance in ratings
and indicating state-like properties.
We also predicted that daily positive functioning
would relate to daily measures of happiness, both
across and within individuals. Both happiness and
positive functioning are concerned with optimal ex-
periences (Ryan & Deci, 2001). We propose that
daily positive functioning will predict happiness.
That is, if an individual is functioning optimally, he
or she is also likely to experience higher levels of
satisfaction and overall happiness. Of course, the
reverse may also be true, that happy individuals func-
tion at a higher level at work.
Hypothesis 3: Daily positive functioning is pos-
itively associated with daily happiness both
across and within individuals.
Our final hypothesis was based on the rationale
regarding the link between PsyCap, a state-like trait
(Luthans, Avolio, et al., 2007), and positive function-
ing, a momentary state. Specifically, based on Hob-
foll’s (1989) COR theory, PsyCap serves as a per-
sonal characteristic resource that, when at higher
levels, would be expected to lead to greater levels of
well-being. Building on our first hypothesis that Psy-
Cap is a direct predictor of positive functioning,
which in turn predicted happiness, we predicted that
PsyCap at the individual level would explain a sig-
nificant proportion of within-individual variance in
daily positive functioning.
Hypothesis 4: PsyCap is positively related to
daily positive functioning.
Methods
Participants and Procedure
The sample consisted of county extension agents
from a Midwestern state in the United States. Exten-
sion agents work in service to their communities and
in event planning. Areas of service include Family
and Consumer Sciences, Agriculture and Natural Re-
sources, and 4H/Youth Development, and include
such activities as teaching healthy eating habits, ed-
ucating about conservation, and teaching young peo-
ple leadership, citizenship, and life skills. All 245
county extension agents in the state received an ini-
tial e-mail describing the research. Agents opting to
participate were then sent an email with a link to an
online survey. In order to reduce common method
425
bias, we administered two surveys at two different
points in time (Podsakoff, MacKenzie, Lee, & Pod-
sakoff, 2003). The first survey assessed PsyCap and
demographic variables. The second survey was ad-
ministered two weeks later and assessed positive
functioning and current positive affectivity. The tim-
ing of the surveys also set up a temporal logic that
PsyCap would predict later positive functioning,
which in turn would be associated with present pos-
itive emotions.
In addition to the Time 1 and Time 2 surveys,
participants had the option of participating in a daily
survey study over the two weeks. Two weeks was
selected as the data collection time period primarily
for practical reasons. First, Reis and Wheeler (1991)
argued that “the 2-week record-keeping period is
assumed to represent a stable and generalizable esti-
mate of social life” (p. 287). Second, we believed that
a longer time period may be too demanding for
participants and result in either lower response rate or
increased participant attrition.
As an incentive to complete the daily surveys,
volunteers received a $20 gift card conditional upon
completion of at least five daily surveys. Two days
after completing the Time 1 survey, agents who had
agreed to participate in the daily survey (N ⫽ 84)
were sent two daily e-mails including links to the
online home and work surveys for a period of 10
working days. Respondents were asked to complete
the work survey immediately after finishing work and
to complete the home survey just prior to retiring for
the day. The average time to respond was 5:51 p.m.
(SD ⫽ 43 minutes) for the work survey and 8:33 p.m.
(SD ⫽ 72 minutes) for the home survey. The average
response frequency was 8.84 daily work and home
surveys.
A total of 102 agents returned completed the Time
1 and Time 2 surveys, yielding a response rate of
42%. Of these participants, 34% were male and the
average age was 41.06 years (SD ⫽ 12.18). Partici-
pants reported working an average of 48.81 hours per
week (SD ⫽ 5.13). The average tenure in their cur-
rent position was 11.06 years (SD ⫽ 9.64). Data from
these 102 participants were used to Test Hypotheses
1a and 1b.
The remaining hypotheses were tested using only
participants who completed both work and home
surveys on at least five days. A total of 67 (79.67%)
individuals (68.7% female) met these criteria. The
average age of this subsample was 41.67 years (SD ⫽
12.50), with an average tenure of 10.21 years (SD ⫽
9.70). Their average work week was 48.98 hours
(SD ⫽ 5.41).
426 CULBERTSON, FULLAGAR, AND MILLS
Measures
Time 1 survey. Apart from collecting demo-
graphic information (e.g., age, gender, tenure, mar-
ital status) the main purpose of the Time 1 survey
was to assess PsyCap. We measured PsyCap using
Luthans, Youssef, and Avolio’s (2007) 24-item
measure. Six items each assessed the four facets:
efficacy (e.g., “I feel confident analyzing a long-term
problem to find a solution”), optimism (e.g., “I al-
ways look on the bright side of things regarding my
job”), hope (e.g., “There are lots of ways around any
problem”), and resiliency (e.g., “I feel I can handle
many things at a time at this job”). Response choices
ranged from 1 (strongly disagree) to 6 (strongly
agree). We used the four facets as indicators of a
second order latent construct labeled “PsyCap” (see
Figure 1). Confirmatory factor analysis on data from
the full sample of 102 participants indicated that each
of the four facets had high loadings on the latent
PsyCap construct (Optimism ⫽ .74; Resiliency ⫽
.77; Hope ⫽ .83; Efficacy ⫽ .79). Goodness-of-fit
indices were well within Hu and Bentler’s (1999)
recommended values: ␹2(2) ⫽ 6.10, comparative fit
index (CFI) ⫽ .98, root mean square error of approx-
imation (RMSEA) ⫽ .02, root mean residual
(RMR) ⫽ .01. The reliabilities for the subscales were
satisfactory for both the full sample (N ⫽ 102; Effi-
cacy, ␣ ⫽ .86; Optimism, ␣ ⫽ .86; Hope, ␣ ⫽ .79;
Resiliency, ␣ ⫽ .63) as well as the subsample (N ⫽
67; Efficacy, ␣ ⫽ .88; Optimism, ␣ ⫽ .86; Hope, ␣ ⫽
.79; Resiliency, ␣ ⫽ .67).
Time 2 survey. Positive functioning and happi-
ness were measured at Time 2 (two weeks after Time
1). Positive functioning was measured with Ryff’s
(1989) Psychological Well-Being Scale, which con-
sists of 42 items divided evenly into six dimensions.
Items were reworded for the work context. Sample
items include self-acceptance (“In general, I feel con-
fident and positive about myself;” ␣ ⫽ .73), purpose
in work/life (“I am an active person in carrying out
the plans I set for myself at work;” ␣ ⫽ .65), personal
growth (“I have the sense that I have developed a lot
as a person through my work;” ␣ ⫽ .76), positive
work relations with others (“I enjoy personal and
mutual conversations with the people I work with;”
␣ ⫽ .74), environmental mastery (“I am quite good at
managing the many responsibilities of my daily work
life;” ␣ ⫽ .68), autonomy (“My work decisions are
not usually influenced by what everyone else at work
is doing;” ␣ ⫽ .70). Participants responded from 1
(strongly disagree) to 4 (strongly agree). Again, pos-
itive functioning was included in the model as a
second-order, latent construct indicated by the six
facets of well-being. Goodness-of-fit indices for this
second-order measurement model were acceptable:
␹ 2 (9) ⫽ 16.54, CFI ⫽ .96, RMSEA ⫽ .08,
RMR ⫽ .01.
Happiness was also assessed at Time 2, using the
positive affectivity subscale from Watson, Clark, and
Tellegen’s (1988) Positive and Negative Affect
Schedule (PANAS). The PANAS includes 10 de-
scriptors of positive affect (interested, excited,
strong, proud, alert, enthusiastic, active, attentive,
determined, and inspired). For each item, participants
were asked to describe the extent to which they
generally feel that way. Response choices ranged
from 1 (very slightly/not at all) to 5 (extremely).
Coefficient alpha for this scale was .93.
Daily work survey. The daily work survey as-
sessed positive functioning at the end of workday. It
consisted of six items adapted from Ryff’s (1989)
Psychological Well-Being Scale. The six items were
chosen because they had consistently high loadings
on the psychological well-being dimensions in pre-
vious factor analytic studies (e.g., Ryff & Keyes,
1995; Springer & Hauser, 2005) and had high face
validity to the world of work. Each item reflected one
of the facets of Ryff’s concept of well-being applied
to the work setting (e.g., Self-Acceptance, “I feel
positive about myself and the events that happened at
work today”; Positive Relations, “I had positive and
satisfying relations with those at work today”; Au-
tonomy, “Social pressures and the expectations of
others made me act and think in certain ways at work
today” (reverse coded); Environmental Mastery, “I
had difficulty managing my daily affairs and control-
ling events at work today” (reverse coded); Purpose
in Work, “I did not have a sense of purpose and
meaning in my work today” (reverse coded); Per-
sonal Growth, “My work today challenged me and
made me grow as a person.”). Response options
ranged from 1 (strongly disagree) to 4 (strongly
agree). A total score was computed by summing the
scores on these six items. Coefficient alpha of the
positive functioning scale (computed on within-
individual mean item ratings) was .82.
Daily home survey. The daily home survey was
completed at the end of the day and assessed two
aspects of happiness; daily mood and life satisfaction.
Mood was measured with 10 positive emotions (alert,
happy, cheerful, strong, active, sociable, involved,
excited, clear, relaxed) and 10 negative emotions
(drowsy, sad, irritable, weak, passive, lonely, de-
tached, bored, confused, tense) arranged as bipolar
items (e.g., alert— drowsy). These emotions have
 PSYCHOLOGICAL CAPITAL AND WELL-BEING
been used to assess happiness in previous research
(e.g., Diener, Smith, & Fujita, 1995). Participants
indicated on a 7-point scale their mood “at this mo-
ment” for each bipolar pair. Higher scores indicated
greater positive mood. Coefficient alpha for this scale
was .93. To assess life satisfaction, we used a single
item measure (“All things considered, I am satisfied
with my life at this moment”). Participants responded
on a scale from 1 (strongly disagree) to 7 (strongly
agree). Our decision to use a single-item measure
was based on the desire for the daily survey to not be
overly cumbersome for participants. This decision,
however, should not have resulted in sacrificed mea-
surement quality. That is, single-item measures of
happiness have been shown to have good convergent
and divergent validity as well as high correlations
with multiple item scales of overall happiness and
facet satisfaction (Abdel-Khalek, 2006; Nagy, 2002).
Results
To Test Hypotheses 1a and 1b, following Ander-
son and Gerbing (1988), a two-step structural equa-
tion modeling approach was used. In the first step, a
confirmatory second-order factor analysis was under-
taken to determine the goodness-of-fit of the mea-
surement model. As noted, PsyCap was indicated by
its four constituent factors. Positive functioning was
indicated by the six factors outlined by Ryff (1989).
Happiness was indicated by a single observed vari-
able, positive affectivity. In order to avoid the as-
sumption that happiness was measured without error,
we estimated the error variance based on the reliabil-
ity of positive affectivity (␣ ⫽ .93).1 In the second
step, the structural model (see Figure 1) was assessed
by comparing the goodness-of-fit of the hypothesized
model with an independence/null model.
Descriptive statistics for the full sample of 102
participants are shown in Table 1. The data were
screened to check for multivariate outliers and any
violations of normality. No outliers were detected
and no violations were revealed.
The Measurement Model
We used AMOS 16 to calculate goodness-of-fit
indices and estimate coefficients in both the measure-
ment and structural models. The proposed measure-
ment model was compared to a single-factor model
where all observed variables loaded on a single latent
construct. This single-factor model (often referred to
as Harman’s single factor test; Podsakoff et al., 2003)
is an estimate of common method variance. This
427
single factor model did not fit the data well: ␹2(45,
N ⫽ 102) ⫽ 202.41, p ⫽ .000; goodness-of-fit index
(GFI) ⫽ .69; CFI ⫽ .67; normed fit index (NFI) ⫽
.62; RMSEA ⫽ .18. These results suggest mono-
method bias may not be of great concern and is likely
to have minimal impact on interpretation of the re-
sults. The proposed measurement model indicated
satisfactory goodness-of-fit and the respecified model
was less parsimonious than the original measurement
model (see Table 2). Consequently the unrevised
measurement model was used in subsequent analy-
ses.
The Structural Model
The indices of fit for the proposed recursive model
are shown in Table 2. All fit indices indicated a
satisfactory fit. The estimated standardized coeffi-
cients for PsyCap à positive functioning (␤ ⫽ .75,
p ⬍ .001) and positive functioning à happiness (␤ ⫽
.78, p ⬍ .001) were significant (see Figure 1). These
relationships accounted for 56% of the variance in
positive functioning and 61% of the variance in hap-
piness. The proposed model provided a significantly
better fit than the null/independence model that spec-
ified no correlations between the latent constructs,
⌬␹2(13) ⫽ 466.70, p ⬍ .001. We also assessed the
goodness-of-fit for a direct effects model where
PsyCap and positive functioning were correlated and
had a direct effect on happiness. This model indicated
a weak improvement in fit, ⌬␹2(1) ⫽ 4.39, .01 ⬍ p ⬍
.05. It also indicated that the standardized coefficient
for the direct path between PsyCap and happiness
was significant (␤ ⫽ .28, p ⫽ .03) but weak. This
suggests that the impact of PsyCap on happiness is
primarily mediated by positive functioning, thus par-
tially supporting Hypotheses 1a and 1b.
For the remaining hypotheses in which we inves-
tigate the relationships between PsyCap, positive
functioning, and happiness, we used HLM (Bryk &
Raudenbush, 1992). HLM is an extension of multiple
regression that enables the analysis of relationships
between variables manifested at two levels of analy-
sis. In this study, we took a series of repeated daily
measures of positive functioning, mood, and life sat-
isfaction for each participant. These constituted the
lowest level (Level 1) of data. The individual level
data (PsyCap) assessed in the Time 1 survey were the
second level data (Level 2). Although HLM is a
correlative analysis, and thus cannot impute causal-
1
Estimated error variance ⫽ (1 – ␣)(Variance).
428 CULBERTSON, FULLAGAR, AND MILLS

Table 1
Descriptive Statistics: Means, Standard Deviations, Reliabilities, and Correlationsⴱ for Study Variables
Variable M SD 1 2 3 4 5 6 7 8 9 10 11
Psychological capital
1. Efficacy 4.86 .59 (.86)
2. Hope 4.71 .55 .64 (.79)
3. Resiliency 4.66 .46 .49 .63 (.63)
4. Optimism 4.45 .68 .52 .58 .63 (.86)
Eudaimonic well-being
5. Autonomy 2.83 .42 .38 .45 .43 .27 (.70)
6. Environmental mastery 3.04 .32 .17 .39 .38 .40 .34 (.68)
7. Personal growth 3.12 .39 .28 .37 .39 .24 .28 .33 (.76)
8. Work relations 3.03 .40 .16 .27 .32 .30 .34 .52 .14 (.74)
9. Purpose in work 3.09 .31 .32 .45 .37 .35 .40 .53 .49 .40 (.65)
10. Self acceptance 3.07 .37 .42 .47 .40 .49 .50 .56 .45 .39 .57 (.73)
Hedonic well-being
11. Positive affectivity 3.70 .64 .41 .39 .53 .49 .56 .36 .46 .43 .29 .56 (.63)
Note. Coefficient alphas are along the diagonal.
ⴱ
Critical values of Pearson r (df ⫽ N-2 ⫽ 102), r ⬎ .20, p ⬍ .05, r ⬎ .25, p ⬍ .01.

ity, the temporal logic of the study strengthened
causal inferences.
To study relationships between positive function-
ing, mood and life satisfaction, mood and life satis-
faction were independently regressed onto positive
functioning for each of the 67 participants who com-
pleted both daily surveys on at least five days. At the
second level, the parameters estimated at Level 1
(intercepts and slopes) for positive functioning were
regressed on the Level 2 variable, PsyCap. HLM 5
was used (Bryk, Raudenbush, & Congdon, 2000) to
test the hierarchical models.
One design issue in HLM is having a sufficiently
large sample size. Maas and Hox (2005) demon-
strated that when Level 2 sample sizes are larger than
50, the estimation of regression coefficients, variance
components, and standard errors are accurate and
relatively unbiased. In the current research, we stud-
ied 67 individuals who had an average of 8.84 ob-
servations each. Thus, there was sufficient power to
detect effects.
Between- and Within-Individual Variation
Means, standard deviations, and intercorrelations
across the 67 participants for all study variables are
presented in Table 3. Before proceeding, systematic
within- and between-individual variance in the rat-
ings of positive functioning, mood, and life satis-
faction were investigated. These statistical as-
sumptions were tested using three null models
(oneway analysis of variance, or ANOVA, models)
for each variable. Since there are no Level 1 or
Level 2 predictors in these null models, the total
within-individual and between-individual variance
can be calculated.

Table 2
Summary of Fit Indices for the Measurement and Structural Models (N ⫽ 102)
Model ␹2 df GFI NFI CFI PGFI RMSEA
Measurement models
Single-factor model 202.41 45 .69 .62 .67 .47 .18
Measurement model 64.98 42 .90 .88 .95 .57 .07
Structural models
Null/Independence model 531.68 55 .35 .00 .00 .29 .29
Hypothesized model 69.37 43 .90 .87 .95 .58 .07
Direct effects model 64.98 42 .90 .88 .95 .57 .07
Note. GFI ⫽ goodness-of-fit index; NFI ⫽ normed fit index; CFI ⫽ comparative fit index; PGFI ⫽ parsimony
goodness-of-fit index; RMSEA ⫽ root mean square error of approximation.
 PSYCHOLOGICAL CAPITAL AND WELL-BEING
Table 3
Means (M), Standard Deviations (SD), and Intercorrelations Across Individuals for All Study Variables
(N ⫽ 67)
M SD
1. Life satisfaction 4.88
2. Positive mood 4.29
3. Eudaimonic work well-being 3.03
4. Psychological capital 4.70
ⴱ ⴱⴱ
Correlation is significant at the .05 significance level (one-tailed).
(one-tailed).
Results revealed substantial within-individual vari-
ance (␴2) and between-individual variance (␶00) for
all three variables (Positive Functioning: ␴2 ⫽ 0.09,
␶00 ⫽ 0.04; Positive Mood: ␴2 ⫽ 0.50, ␶00 ⫽ 0.27;
Life Satisfaction: ␴2 ⫽ 0.25, ␶00 ⫽ 0.35). Chi-square
tests indicated that the between-individual variance
was significant in all three cases (Positive Function-
ing: ␶00 ⫽ 0.04, ␹2(66) ⫽ 346.10, p ⬍ .01; Positive
Mood: ␶00 ⫽ 0.27, ␹2(66) ⫽ 374.57, p ⬍ .01; Life
Satisfaction: ␶00 ⫽ 0.35, ␹2(66) ⫽ 934.81, p ⬍ .01).
Intraclass correlations2 indicated that between-
individual variance accounted for 31%, 35%, and
59% of the total variance in positive functioning,
positive mood, and life satisfaction, respectively.
This suggests that most of the variance in positive
functioning (69%) and positive mood (65%) was
attributable to within-individual variation, indicating
they vary considerably on a daily basis and are asso-
ciated with state or situational factors. The variation
in life satisfaction, however, was predominantly be-
tween-individual rather than within-individual. Thus,
Hypothesis 2a was supported whereas Hypothesis 2b
was partially supported.
Eudaimonic and Hedonic Well-Being
We hypothesized that daily positive functioning
relates to daily mood and life satisfaction, both
across and within individuals. Positive functioning
represents the deviation of the individual’s score
from the grand mean of the sample. Given this, the
variance in the intercept term equals the between-
individual variance in either positive mood or life
satisfaction after controlling for positive function-
ing, or the adjusted between group variance. The
results of two random coefficients regression mod-
els revealed that, for positive mood, the pooled
slope parameter was significantly different from
zero, ␥10 ⫽ 1.15, t(66) ⫽ 15.43, p ⬍ .01; see Table
4. The direction of the pooled slope of the regres-
429
1 2 3
0.59
0.58 0.30ⴱⴱ
0.24 0.16 0.39ⴱⴱ
0.51 0.17 0.19 0.26
Correlation is significant at the .01 significance level
sion of positive functioning onto mood (␥10) indi-
cates that higher levels of positive functioning are
associated with more positive mood. The magni-
tude of this relation was calculated by comparing
within-individual variance in mood from the first
null model with within-individual variance after
controlling for positive functioning. 3 Positive
functioning accounted for 22% of within-individ-
ual variance in mood. Similarly, comparing Level
2 variance components of random regression
model and the null model indicated that positive
functioning explained 26% of between-individual
variance in mood.4 Thus, results suggest that daily
positive functioning is associated with daily posi-
tive mood.
The positive functioning—life satisfaction rela-
tion was also significant, ␥10 ⫽ 0.19, t(66) ⫽ 2.37,
p ⬍ .05; see Table 4. However, the effect was
weak and mainly attributable to positive function-
ing explaining 5% of the between-individual vari-
ance in life satisfaction. Positive functioning
explained zero percent of the variance in within-
individual life satisfaction. The within-individual
variance in life satisfaction, however, was re-
stricted (M ⫽ 4.85, SD ⫽ 0.77). Our data suggest
that overall life satisfaction does not vary much
within individuals on a day-to-day basis. Life sat-
isfaction seems to vary more considerably between
individuals. Thus Hypothesis 3 was partially sup-
ported in that positive functioning was associated
with individual level life satisfaction but was not
predictive of daily life satisfaction.
2
ICC ⫽ (␶00/(␴2 ⫹ ␶00).
3
R2 for level-1 model ⫽ (␴2(oneway ANOVA model) ⫺
␴ 2 (random regression model))/␴ 2 (Oneway ANOVA
model).
4
R 2 for level-2 model ⫽ (␶ 00 (oneway ANOVA
model) ⫺ ␶00(random regression model))/␶00(oneway
ANOVA model).
430 CULBERTSON, FULLAGAR, AND MILLS
Table 4
Parameter Estimates and Variance Components of the HLM Models Testing the Relationship Between
Work Well-Being, Psychological Capital, Positive Mood, Life Satisfaction, and Psychological Capital
(N ⫽ 592)
Model equations
a
Level 1: Random coefficient regression models
Moodij ⫽ ␤0j ⫹ ␤1j (Eudaimonic work well-beingij) ⫹ rij
Life satisfactionij ⫽ ␤0j ⫹ ␤1j (Eudaimonic work well-beingij) ⫹ rij
Level 1: Oneway analysis of variance model
Eudaimonic work well-beingij ⫽ ␤0j ⫹ rij
Intercepts-as-outcomes model
L1: Eudaimonic work well-beingij ⫽ ␤0j ⫹ rij
L2: ␤1j ⫽ ␥10 ⫹ ␥01(Psychological capitalj) ⫹ U1j
a
For each model the Level 2 equations are: ␤0j ⫽ ␥00 ⫹ U0j and ␤1j ⫽ ␥10 ⫹ U1j where ␥00 is the mean of the intercepts
across groups; ␥10 is the mean of the slopes across groups; ␴2 (rij) is the level 1 residual variance; ␶00 (U0j) is the variance
in intercepts; and ␶11 (U1j) is the variance in slopes.
ⴱ
p ⬍ .05. ⴱⴱ p ⬍ .01.
Psychological Capital and
Positive Functioning
We hypothesized that individual variance in posi-
tive functioning was associated with PsyCap. To test
this, two models were calculated: a oneway ANOVA
or null model and an intercepts-as-outcomes model
(see Table 4). Tests were undertaken to ascertain the
proportion of variance in the intercept terms ex-
plained by PsyCap at Level 2. The t tests for the fixed
effects in the intercepts-as-outcomes model assessed
the significance of the relationship between PsyCap
and daily positive functioning. These tests indicated
PsyCap, ␥11 ⫽ 0.12, t(65) ⫽ 2.16, p ⬍ .05, was a
significant predictor of between-groups variance in
positive functioning.
To determine the magnitude of the PsyCap— daily
positive functioning relationship, we looked at resid-
ual variance in the intercepts and found PsyCap ac-
counted for 17% of between-individual variance in
positive functioning (␶00 ⫽ 0.04, ␹2(65) ⫽ 320.79,
p ⬍ .01).5 Hypothesis 4 was supported.
Discussion
PsyCap has been identified as an important under-
lying construct in the field of positive organizational
behavior (Luthans, Avey, & Patera, 2008; Luthans,
Avolio, et al., 2007). Despite the fact that the over-
arching aim of positive psychological approaches to
organizational behavior is an understanding of opti-
mal human flourishing, no research has investigated
the association between PsyCap and individual well-
being. The current research aimed to redress this by
␥00 ␥10 ␥01 ␴2 ␶00
4.27 1.15ⴱⴱ — 0.39 0.20
4.87 0.19ⴱ — 0.24 0.33
3.01 — — 0.09 0.04
2.44 — 0.12ⴱ 0.09 0.04
investigating the relation between PsyCap and two
different operationalizations of well-being (hedonic
and eudaimonic).
Our results indicated that PsyCap was related to
both types of well-being both across two weeks and
on a daily basis. Furthermore, individuals doing work
that was eudaimonic (i.e., reflective of one’s abilities
and strengths) were more likely to experience posi-
tive affectivity and high life satisfaction. This finding
supports research that suggests positive functioning
is a better predictor of life satisfaction than pleasure
alone (Peterson, Park, & Seligman, 2005).
Organizational researchers often operationalize oc-
cupational well-being as job satisfaction. Although
PsyCap is associated with job satisfaction (e.g.,
Luthans, Avolio, et al., 2007), our results suggest it is
also reliably related to a much broader definition of
well-being that is more indicative of human happi-
ness, flourishing, and thriving. This is an important
association if researchers are to establish PsyCap as a
core construct in the application of positive psychol-
ogy to organizational behavior. Research has indi-
cated a significant link between psychological well-
being and job performance ratings (e.g., Cropanzano
& Wright, 2001), suggesting organizations can im-
prove their effectiveness by increasing employee
well-being. However, relatively little guidance exists
as to how to achieve this. Our findings suggest that
one way to do this would be to improve employees’
PsyCap.
5 2
R ⫽ (␶00(oneway analysis of variance) ⫺ ␶00(inter-
cepts-as-outcomes))/␶00(oneway analysis of variance).
 PSYCHOLOGICAL CAPITAL AND WELL-BEING
The PsyCap constituent elements are considered to
be “state-like” in that they can change and be devel-
oped (Luthans, Avolio, et al., 2007). As such, orga-
nizations interested in developing their employees’
well-being are encouraged to direct effort toward
enhancing employee hope, resiliency, efficacy, and
optimism. Recent research has shown that interven-
tions can improve PsyCap (e.g., Luthans, Avey,
Avolio, Norman, & Combs, 2006; Luthans et al.,
2008). Using a 1-hr microintervention Luthans et al.
(2006) were able to improve PsyCap among both
management students and practicing managers from
a variety of organizations. Luthans et al. (2008)
found similarly encouraging results with their Inter-
net-based intervention. Such programs would be
more time- and cost-effective in improving well-
being than more traditional interventions, such as job
redesign and organizational behavior modification.
Findings from the current study also provide sup-
port for the notion that one’s work life can spillover
into one’s personal life. Specifically, we found that
positive functioning was related to mood and life
satisfaction at home. Given the temporal logic of the
current study, it is safe to say that it was positive
functioning influencing mood and life satisfaction at
home, rather than the other way around. That said, it
would be interesting to examine the influence of
flourishing and optimal functioning at home on mood
and satisfaction levels at work.
Such spillover from one’s work life to one’s per-
sonal life is supported by Fredrickson’s (2001)
broaden-and-build theory of positive emotions,
which posits that positive thoughts and well-being
create a positive spiral generating further positive
experiences, thoughts, and feelings, which is benefi-
cial to optimal functioning. This theory lends support
to the implementation of interventions to improve
PsyCap and, ultimately, well-being. The findings of
our research would empirically support the notion
that enabling individuals to experience positive func-
tioning at work leads to positive emotional states.
Future research needs to identify further antecedent
conditions that elicit happiness, particularly as posi-
tive emotional well-being is an important mediating
variable to optimal individual and organizational
functioning.
Strengths, Limitations, and Directions for
Future Research
Our research contributes to the growing literature
on positive organizational scholarship in several
431
ways. First, we presented an examination of a rela-
tively new construct—PsyCap—and its role as a pre-
dictor of well-being. While this literature is still in its
infancy, any research that helps to broaden the no-
mological network of PsyCap is beneficial and
timely. Second, we expanded the work on well-being
within the workplace to include positive functioning.
Although eudaimonia dates back to the time of
Aristotle (Ryan & Deci, 2001), it has been relatively
unexplored in the workplace literature (see Ilies et al.,
2005 for an exception). Thus, whereas much research
exists on happiness at work, our research provides
one of the few examinations of positive functioning
at work.
Another strength of our research is the methodology.
Our longitudinal approach and use of experiential sam-
pling allowed us to establish that positive functioning
and happiness fluctuate daily. These findings suggest
that exploring well-being using a cross-sectional design
may be insufficient and potentially misleading, de-
pending on the research question. Additionally, by
assessing individuals over time, at different points in
the day, we provided a temporal logic that allowed us
to make some inferences regarding the likely causal
order of events.
Although our longitudinal approach and use of
experiential sampling are strengths of our research,
we limited our focus to a 2-week time period for
practical reasons. Although this time frame was con-
sistent with other longitudinal research examining
daily within-individual variation in work-related
variables (e.g., Judge, Ilies, & Scott, 2006; Sonnentag
& Zijlstra, 2006), it may have been too short to allow
for an adequate sampling of workplace experiences.
Nevertheless, even within the limited time frame, we
found clear variation in employee positive function-
ing and happiness. Despite this, sampling from a
longer time period would help better understand the
experiences of individuals over time, as well as pro-
vide greater understanding into the predictive poten-
tial of PsyCap over greater time spans.
Related to this, we limited our assessment of
PsyCap to Time 1, using it to predict later positive
functioning and happiness. In doing so, we treated
PsyCap as more dispositional than it has been pro-
posed to be. Luthans, Avolio, et al. (2007) have
described PsyCap as being “state-like,” which sug-
gests that it, too, may yield daily fluctuations. The
extent to which this is the case, however, remains
unknown. Furthermore, both positive functioning and
happiness were measured simultaneously at Time 2
raising the question of whether one could cause or
432 CULBERTSON, FULLAGAR, AND MILLS
mediate the other. Future research is needed to con-
firm our causal ordering.
In our test of Hypothesis 1b, we used the PANAS
as our measure of happiness, which may not be ideal
given its focus on activation-based (vs. pleasantness-
based) descriptors of emotions (vs. moods). Never-
theless, although the PANAS has activation-based
descriptors, they are valenced descriptors, in a sense
making them pleasantness-based and activation-
based. In addition, the PANAS is measuring an
emotional state, thus falling under the umbrella of
hedonic well-being. That is, moods are simply less-
specific and more enduring emotional states. Thus,
the PANAS, which measures emotional states, does
indeed measure at least a part of hedonic well-being,
albeit potentially a less-stable indicator. Neverthe-
less, we recognize that more emotionally laden de-
scriptors may be more accurately indicative of hedo-
nic well-being, and thus, we would suggest that
future researchers designing similar studies consider
using a measure of mood (e.g., Diener et al., 1995) as
perhaps a more precise measure of hedonic well-
being.
Another concern is that four of our 11 measures
had reliability coefficients less than .70. Such low
alphas are indicative of high measurement error. Al-
though HLM makes adjustments for measurement
error, such low internal consistencies suggests future
researchers find more reliable assessments of resil-
iency and certain components of positive function-
ing.
Another limitation concerns our focus on employ-
ees from a single organization. Although this focus
helps rule out alternative explanations for findings
related to contextual differences across organiza-
tions, the experiences of agents may be unique com-
pared to experiences of individuals in other occupa-
tions. Nevertheless, the process-related nature of the
questions we examined may remain relatively con-
sistent across occupations and organizations. Regard-
less, further research on this topic using diverse oc-
cupations and organizations is needed.
Finally, a potential limitation of the present study
involves the single-source nature of our data. How-
ever, many of our variables were collected at differ-
ent times, reducing the potential bias of self-report
data. Additionally, results from Harman’s single-
factor test suggested common method bias was not a
concern. Finally, Spector (2006) has provided empir-
ical evidence suggesting common method variance
does not significantly inflate correlations.
In conclusion, our results demonstrated that the
relation between PsyCap and happiness, measured
two weeks later, was mediated by positive function-
ing. Additionally, results showed that daily positive
functioning was significantly associated with both
daily positive mood and daily life satisfaction and
that PsyCap predicted between-groups variance in
positive functioning. These findings suggest that or-
ganizations interested in enhancing employee well-
being would be well-advised to target employee
PsyCap.
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Received May 4, 2009
Revision received March 24, 2010
Accepted June 7, 2010 y