Personal Resources Training: A New Approach for Building Sustainable Competitive Advantage

Personal Resources Training: A New Approach for Building Sustainable Competitive Advantage

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Abstract

June, 2012 by Renetta McCann (MSLOC 2011)

 Psychological Capital (also known as personal resources) describes the within-person capacities of self-efficacy, hope, optimism and resilience. Collectively, they are a unique and valuable, yet underutilized, source of competitive advantage for organizations. Targeted towards training & development professionals, this paper presents the findings of a study designed to identify an influential indicator in the selection of preferred training methods across those four areas. Ninety-six respondents completed an online survey that incorporated three statistically reliable constructs (one established, two newly created). While no single influencing factor was found, the study revealed strong interest across the four capacities and strong preferences for training methods requiring human interaction. This paper also proposes a flexible framework for analyzing effective training methods that will increase employee capabilities across these areas while also building organizational knowledge and assets.

Introducing Personal Resources

Today’s business environment is increasingly complex and challenging, calling for greater profit delivery, continuous innovation, faster speed-to-market and greater employee productivity and more – all at the same time and with extraordinary constraints on resources. This environment exists across all for-profit firms regardless of size, industry, market share or financial performance. In response to these demands and expectations, management or leadership teams endeavor to use all of their organizational resources (financial, structural, legal, intellectual, human, etc.) to their fullest potential, for the longest period possible. In essence, they focus on building sustainable competitive advantage - …”creating safe-havens from cut-throat competition by continuously creating gaps through unique resources that cannot be easily bridged by the competitors” (Chaharbaghi & Nugent, 1996). The quest for such an advantage raises several questions:

  • What if unique resources were already present within a firm yet simply overlooked and underutilized?
  • What if those resources resided within every employee?
  • What training methods are preferred for building those resource levels?

This article provides a perspective on these three questions.

An Emerging and Unique Set of Resources

“In sum, PsyCap is presented here as an emerging higher order, core construct that organizations can invest in and develop in their workforce to achieve veritable, sustained growth and performance” (Luthans, Norman, Avolio, & Avey, 2008, p. 77).

The construct (also referred to as personal resources) is well suited for addressing the business environment described earlier. First discovered in the late 1990’s / early 2000’s, psychological capital is defined as “…an individual’s positive psychological state of development“ in the following four areas: “1. Self-efficacy - having the confidence to take on and put in the necessary effort to succeed at challenging tasks; 2. Optimism - making a positive attribution about succeeding now and in the future; 3. Hope - persevering toward goals and, when necessary, redirecting paths to goals in order to succeed; and 4. Resilience - when beset by problems and adversity, sustaining and bouncing back and even beyond to attain success” (Luthans, Youssef, & Avolio, 2007, p. 3) PsyCap derives its uniqueness from at least three factors:

  1. The construct recognizes the role of emotions, especially positive ones, in the workplace. In a phenomenon they call the ‘inner work life’, Amabile and Kramer (2007, p. 77) assert that “people perform better when their workday experiences include more positive emotions, stronger intrinsic motivation (passion for the work), and more favorable perceptions of their work, their team, their leaders and their organization.”
  2. The four areas have been classified as “state-like” (meaning “…malleable and thus open to change and development”) rather than as traits (i.e. hardwired and stable characteristics such as personality or intelligence) making them easier to develop and measure (Luthans & Youssef, 2007).
  3. The employee controls and produces PsyCap resources. The benefits of developing these resources, though, accrue to both the organization and its employees, creating the possibility for win-win outcomes for both parties.

Valuable and Sustainable Benefits

Increasing employee’s personal resource levels yields numerous benefits for organizations and their employees (Avey, Luthans, & Youssef, 2010; Avey, Wernsing, & Luthans, 2008; Luthans, Norman, et al., 2008). Benefits include, but are not limited to:

  • Greater employee openness to organizational change
  • Higher employee engagement; reduced turnover
  • Improved organizational climate
  • Improved work performance, satisfaction and commitment
  • Leader development and influence on follower performance

The majority of these benefits support growth and innovation, and possibly, financial benefits – through revenue generation or improved profit delivery. At the same time, the PsyCap clearly has a greater potential for delivering a sustainable competitive advantage for organizations. As shown in Figure 1 below, PsyCap capacities possess all five of the key characteristics for generating competitive advantage and perform better than five of eight other sources of capital (Luthans & Youssef, 2004, p. 145).

Figure 1

Having established the benefits of PsyCap, I now focus on the question of how to practically implement personal resources construct in organizations. Leaders, managers and employees must believe that theory can become reality before they fully embrace it.

Validating the Elements

My research focused on determining if there were any specific indicators for selecting the most effective training methods for developing personal resources. I chose to study two: learning style as measured by the Kolb Learning Styles Instrument or subject matter – meaning the four capacities themselves. I wanted to know which mattered more. I believed that training and development professionals could use the answer to generate insights about various employee segments, customize the organization’s training efforts as well as build organizational capability.

Methods & Measures

A US-based firm operating in the services sector and employing training and development initiatives to grow its talent base supplied the respondent pool for this study. All of its employees received a company-initiated email inviting them to participate in the survey. If interested, employees were directed to a secure, third-party research hosting service where they completed a two-section, 24 question self-administered online survey (Fink, 2009). The survey’s questions addressed four major variables in addition to relevant demographic information.

  1. Interest in Personal Resource Training: A custom-designed question measured the individual’s interest in receiving personal resources training (one of two independent variables that might be able to explain training method selections).
  2. Training Preferences: Respondents were asked to rank at least three of ten training methods based on their perceived efficacy. Three of those methods were researched in prior studies which reported that face-to-face training, computer based interventions and online / web-based training methods were effective under certain conditions (Luthans, Avey, & Patera, 2008; Luthans, Norman, et al., 2008; Luthans, et al., 2007). Those studies, though, contained little exploration of how to choose between different training methods.
  3. Learning Style: The study used two sets of different questions to assess the respondent’s learning style. The first was the Kolb Learning Style Inventory a validated survey instrument that employs a battery of 12 questions. (See Appendix chart C for a pictorial description.) I measured Learning Style to explore another possible explanation for training methods preferences. This same line of investigation was adopted in a 2002 empirical study where researchers found that in addition to content as a determinant of appropriate training methods, “…learning style may be an additional consideration to be taken into account” (Buch & Bartley, 2002, p. 9). The second instrument was a single question, designed by the researcher, which solicited information about respondent’s learning styles based on their preferences for various types of training experiences. Those training experiences were correlated to the Kolb learning styles (Little, 2004).
  4. Feedback: Three different questions probed respondents about their prior training experiences; the helpfulness of that training; and whether they had any general comments regarding the concepts covered in the survey.

All questions associated with the three major variables (interest profile, training preferences and assessment benchmark) were found to be reliable measures in this study (See Appendix tables 1, 2, and 3 for details.) Basic cross tabulations pairing the major elements with age and gender also performed reliably at the 95% confidence level (O'Leary, 2004). (See Appendix tables 6 and 7 for details.)

The Respondents

The email solicitation generated 96 usable respondents out of 157 who consented to take the survey. (61 respondents were eliminated based on low survey completion rates.) The respondents were primarily female (64) and 25 – 44 in age (57%). There is no data to explain this demographic skew. Nor is there any information available that allows comparisons between this group and any other population within the host organization.

Summary of Results

While the results were inconclusive regarding whether learning style or subject matter was more influential in selecting effective methods for personal resources training, the study did provide valuable learning, which is briefly described below.

1. Interest in Personal Resource Training: Respondents are interested in personal resources training with 46% interested in the area of Optimism, 49% interested in the area of Hope and nearly equal interest in the capacities of Resilience (57%) and Self-efficacy (58%).

Figure 2

There are noticeable skews by age and gender indicating that demographics could play a role in determining interest levels across the four areas. Women, especially younger ones, drive the interest in Self-efficacy and Resilience. Males and older respondents show a slightly greater interest in the areas of Optimism and Resilience. As a result, this organization might want to tailor its content/ training modules as well as manage the selection of participants with those interests and demographics in mind.

Figure 3Figure 4

2. Training Preferences: Of the ten training methods included in the survey, the ones requiring some form of human interaction were most preferred by respondents. Of the ten methods, working with a personal coach or mentor ranked the highest (76% of respondents ranked it as most effective), followed by participation in small group discussions (71%), lectures and presentations (66%), case studies and what-if analysis (63%) and structured role play exercises (62%). The sixth ranked method, a blend of classroom and eLearning activities, was the first to include computer or web-based techniques. There were no meaningful differences in ranking by specific resource, age or gender.

Figure 5

3. Learning Style: Whether based on perceptions or scored responses, more respondents (56% based on perceived style, 33% based on Kolb LSI measurement) were categorized as the Accommodator Learning Style. The skew toward this style was seen across all age and gender segments. Interestingly, the Accommodator Learning Style prefers training methods featuring hands-on or experiential learning (Little, 2004) rather than lectures, small group discussions or personal coaching – the highest ranked methods. The data did not reveal any explanation for the skew to one particular style or variance between that style and the training method selected.

Figure 6 

4. Feedback: Six characteristics define training effectiveness . Respondents clearly favored training efforts that were relevant to their jobs / roles and to them personally (see Appendix tables 4 and 5 for an analysis of feedback responses).

Study Constraints

Limitations exist in two areas:

Sample Size & Composition:

  • While the study’s sample size, 96, is sufficient for the type of analysis conducted (reliability testing and basic cross tabulations), a larger sample is needed to support the more rigorous types of analyses required to establish statistically reliable relationships or correlations between the major elements.
  • The demographic composition of the respondents was skewed toward women and mid-career, highly skilled employees. Therefore, the possible implications listed above should only be used with great caution and consideration when considering the broader population.
  • With a larger, more representative sample, normative benchmarking could have been conducted for the Kolb Learning Styles instrument.

Tools & Questions:

  • The quality of the survey questions could be improved through further vetting to ensure a lack of bias and to increase clarity – of instructions and terminology.
  • With a larger pool of respondents, each Kolb learning style could have been appropriately populated and analyzed.
  • Several tools (the Kolb LSI and the three researcher designed questions) employ a self-rating system - which is considered less reliable or less easily replicated than behavior or standards-based systems (Kelly, 1997). Additionally, the Kolb instrument has been challenged for its reliance on forced-choice questions which support intra-persons rather than inter-persons analyses.

A Proposed Framework

Combining this study with prior research about the implementation of PsyCap in organizations, I designed a PsyCap implementation framework (see Figure 2) that could be used by training and development leaders to help employees develop personal resources. If validated, this framework could offer a flexible structure and process for identifying, embedding, measuring and tracking this resource within their organizations. It also would allow training managers to generate insights and customize training efforts in a manner that is unique to the organization while helping insulate newly gained advantages from competitive activity. Employee interests, preferences, styles / behavior and input are inventoried and assessed using a variety of tools - from basic to advanced (based on the organization’s current strategies and practices). The basic tools / approach generate a broad set of indicators, in essence a snapshot, of employee interest and preferences. The more advanced tool set allows for a longitudinal inventory and assessment along with a deeper understanding of employee positions.

Figure 7

In addition, charts A and B located in the Appendix demonstrate the potential applications for insights gleaned within each element as well as the likely benefits delivered from creating a personal resources knowledge management system. Beyond addressing the listed study limitations, the proposed Employee Inventory and Assessment Framework could be strengthened through testing across a broader range of industries e.g. financial services, manufacturing, technology, etc.), incorporating more advanced tools and extending the understanding across different demographics including age, gender, tenure and employment status. Consistent with the building of a personal resources knowledge repository, future exploration could focus on the creation of metrics along with a model for correlating personal resource levels and company performance – financial, innovation, customer service, or R&D to name a few.

Conclusion

…strategic advantage moves the organization to consider new competitive challenges and new or changing markets. It challenges organizations to direct the attention towards the substantive changes necessary for their future viability and to build these by developing new strengths” (Chaharbaghi & Lynch, 1999).

Increasing employee personal resource levels can deliver a unique source of competitive advantage for organizations – one that is sustainable and renewable. It is an advantage capable of delivering a win-win outcome with benefits for employees and the organization. As proposed, the Employee Inventory and Assessment Framework provides training and development professionals with a flexible means (from basic to advanced and in-between) to leverage this resource into a well informed and well constructed sustainable advantage - one with numerous applications and the ability to deepen organizational knowledge.

Article and Author Information

Renetta McCann wrote this article in December 2010 for the Capstone 3 Research Analysis and Interpretation course. This executive summary assignment is the culmination of a nine-month capstone research project. Renetta graduated from the MSLOC program in 2011 and is now a leadership and innovation coach.

Across a thirty year career, McCann was consistently recognized as one of the leading innovators and most influential executives in the advertising, marketing and media industries, with a global reputation for not only building brands but also the organizations and leadership to sustain them. Among her many accolades, she placed #27 on the 2006 Forbes list of “l00 Most Powerful Women.” The previous year she’d been named by The Wall Street Journal as one of the “Top 50 Women to Watch” in corporate America and identified by Fortune as one of “5 Women to Watch” in its “Most Powerful Women” issue.

Twitter: @RenettaMcCann

Personal Resources Training: Appendix

Appendix1

Appendix2

Appendix3


References

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