Optimism and Employee Performance in the Banking Industry
Jensen, Susan M
This paper explores the linkage between bank employee levels of optimism and performance outcomes. To date, there has been little empirical evidence assessing the impact that positive psychological capacities, such as the optimism of bank employees, may have on performance. This study was designed to help begin to fill this void. The study sample consisted of 90 bank employees from all areas of a metropolitan bank in the Midwest. Participants completed surveys to determine their current state of optimism. Supervisory performance appraisal data were gathered in order to measure performance outcomes. Results indicated a significant positive relationship between the midlevel managers’ measured state of optimism and their supervisors’ ratings of their overall work performance. Findings also indicated a positive correlation between self-rated optimism, job satisfaction, and self-rated performance for both midlevel managers and tellers. Suggestions for effectively developing and managing bank employees’ optimism to positively impact their performance are provided.
The competitive paradigm facing the retail banking industry has shifted. The proliferation of retail branches, coupled with changes which have allowed banks to expand their product lines, has resulted in a dynamic environment in which banks are seeking to differentiate themselves in order to create a source of sustained competitive advantage. Technological developments and organizational redesign have also changed the type of work being performed by bank employees. As noted by Bartel (2004), bank tellers have traditionally served more of a clerical role by simply processing customers’ transactions. In today’s competitive landscape, the job of a bank teller has been enlarged. Beyond the normal expectation of providing excellent customer service, tellers are also evaluated on their ability to sell various financial products or make referrals to the proper sales personnel. Due to these industry dynamics, banks can no longer rely on traditional sources of competitive advantage such as technology or superior efficiency based upon economies of scale to be successful. Instead, these changes have forced many retail banking operations to fundamentally reformulate how they attain a competitive advantage on a level playing field.
A Resource-Based Perspective
According to the resource-based theory of the firm, organizations can develop sustained competitive advantage only by developing value creating resources and capabilities which are rare and difficult for competitors to imitate (Barney, 1995). Although traditional sources of competitive advantage such as technological supremacy, patent protections, economies of scale and scope, and favorable government regulations create value, the resource-based view would argue that these sources are increasingly easy to replicate. Therefore, these traditional forms of competitive advantage can no longer be leveraged for long-term success. Instead, firms must now consider developing other forms of intangible and more difficult to imitate strategic resources in order to sustain their advantage over time.
The High Performance Work System
Many have argued that the implementation of a progressive set of human resource management policies and practices collectively known as a high-performance work system can lead to the development of a sustained competitive advantage. Consistent with a resource-based view, a conceptual argument can be made that the development of “human capital” within an organization creates value and is an “invisible asset” which might be especially difficult for competitors to replicate. For example, Becker and Gerhart (1996) have argued that human resource (HR) systems consist of policies and practices which have been implemented over time and cannot simply be purchased by industry competitors.
Beyond the conceptual argument, a large amount of empirical evidence would also suggest a strong linkage between high-performance work systems and firm performance. Probably one of the most visible works connecting human resource management and bottom-line results was Huselid’s (1995) research related to the positive impact of “High Performance Work Practices (HPWP)” on organizational performance. Specifically, Huselid (1995) found that one standard deviation increase in the proportion of employees involved in high performance work practices (e.g., comprehensive recruitment and selection procedures, job design, training and participation programs) reduced turnover by 7 percent and increased sales per employee by more than $27,000 per year. In addition, the study revealed that the impact of a one standard deviation increase in the use of High Performance Work Practices enhanced profitability by more than $4,000 per employee and increased the firm’s market value by more than $18,000 per employee.
There is also research to suggest a strong linkage between high-performance work systems and firm performance in the banking industry. For example, Delery and Doty (1996) sampled 1,050 banks in order to examine the relationship between HR practices and two key measures of financial performance including return on average assets (ROA) and return on equity (ROE). Controlling for the size, age, and for the Federal Reserve district in which the bank was located, the authors found a significant relationship between a system of HR practices and financial performance. In particular, the results of the study indicated the HR practices were able to explain an additional 12.55 percent variance (p
An Emerging Positive Psychological Capital
Conceptually, the link between the development of human capital and firm performance has considerable face validity. However, the time has now come to consider an expanded framework. Luthans and colleagues have recently called for looking beyond economic capital (“what you have”), human capital (“what you know”), and social capital (“who you know”) in order to create value and maintain their success over time (Luthans, Luthans, & Luthans, 2004; Luthans & Youssef, 2004; Luthans, Youssef, & Avolio, 2007). They have argued that sustainable competitive advantage can best be accomplished through context-specific, cumulative, renewable, and thus hard to imitate factors. Specifically, such an advantage can be gained through embracing, developing, and leveraging the positive psychological resources and capabilities, i.e., “who you are” and “what you can become,” in human resource management development. Luthans et al. (2007) have noted that integrating human, social, and now psychological capital can have a greater impact on firm performance than any of the previously listed resources can have independently. Consistent with the resource-based view of the firm, the effective development and integration of positive psychological capital with other assets can provide an organization with an intangible resource that is valuable, rare, and difficult to imitate – and therefore a source of sustained competitive advantage.
Drawing from positive psychology and positive organizational behavior and in particular the notion of psychological capital, we suggest that identifying and developing the positive psychological capacities of individuals may lead to desirable performance outcomes. We also argue that these positive psychological strengths might be especially relevant for organizations competing in the dynamic and increasingly competitive banking industry. In particular, we propose that the positive psychological capacity of optimism might be especially relevant to the human resources of today’s retail banks. Prior research has shown a significant correlation between optimism and workplace performance in a variety of contexts and industries (Luthans, Avolio, Walumbwa, & Li, 2005; Luthans, Lebsack, & Lebsack, 2004; Seligman, 1998). To begin this journey of taking a new positive approach toward performance improvement and competitive advantage, the purpose of this study is to explore the specific relationship between bank employees’ optimism and various measures of their performance.
First we will review the background and meaning of optimism as a positive psychological capacity and review prior research demonstrating a clear linkage between optimism and workplace outcomes. Then the study methodology and results are presented. In particular, the relationship between bank employees’ optimism and their supervisory performance appraisal, along with other measures, are reported. The paper concludes with a summary of the implications of the findings with particular attention given to specific practical guidelines for the development of optimism in bank employees.
The Meaning and Application of Optimism
The growing positive psychology movement can be credited with placing an increasing awareness on the relative importance that positive strengths and capacities such as optimism can have on human functioning. Seligman and Csikszentmihalyi (2000) describe the positive psychology movement as a deliberate attempt to focus on building positive qualities and traits within individuals and institutions as opposed to focusing on just trying to fix what might be wrong with them. They have also outlined the need for more research involving positive psychological capacities such as optimism, hope, perseverance, wisdom, and resiliency. Building upon this positive psychology movement, Luthans (2002a, 2002b) has described the need for a positive organizational behavior. The main thrust of this approach has been a call for research which demonstrates the effectiveness and applicability of positive psychological strengths in the workplace. Luthans (2002b:59) has defined positive organizational behavior as “the study and application of positively oriented human resource strengths and psychological capacities that can be measured, developed, and effectively managed for performance improvement in today’s workplace.” Since this initial call for positivity in the workplace, a growing number of studies have shown a significant relationship between psychological capabilities and desirable outcomes (e.g., Jensen & Luthans, 2006; Luthans & Jensen, 2005; Luthans, Avolio, Walumbwa, & Li, 2005). This is believed to be the first study to examine the relationship of a positive psychological capacity and performance in the banking industry.
To date, the capacities associated with positive organizational behavior include resiliency, confidence (self-efficacy), hope, and optimism (Luthans, 2002a; Luthans et al. 2007). When combined together, these positive organizational behavior states form the higher order core factor for “positive psychological capital” (Luthans et al., 2007). To be included as a positive organizational behavior capacity, Luthans (2002a; 2002b) noted that the following criteria must be met:
1. Theory and Research-Based. The theory and research foundation separates positive organizational behavior states from the popular self-help literature. Positive organizational behavior is committed to a scientific approach for accumulating a meaningful body of knowledge for human resources development and performance improvement.
2. Valid Measurement. Positive organizational behavior requires that for a construct to be included, there must be valid and reliable measures. For example, Scheier and Carver (1985) developed the Life Orientation Test (LOT) to measure the construct of optimism. The LOT scale was later modified by Shifren and Hooker (1995) to reflect a more current state of optimism. The modified LOT has also demonstrated good reliability (Cronbach’s alpha = .75) in previous research. Scheier and Carver (1985) have also compared their LOT scale with others measuring self-esteem, internal-external control, and powerlessness to check the convergent and discriminant validity of the LOT scale.
3. State-Like. As opposed to being only fixed and trait-like, the positive psychological capacities of resiliency, confidence, hope, and optimism have also been demonstrated in the past to be more state-like and are therefore open to development. For example, Luthans, Avey, Avolio, Norman, and Combs (2006) have shown the ability to enhance an individual’s positive psychological capital through a highly focused, relatively short “micro-intervention” training program.
4. Performance Impact. An important final criterion for application to the workplace relates to performance improvement. Given their state-like nature, the criteria-meeting positive organizational behavior states can be learned and developed through training and managed to have performance impact.
Using this very brief overview of positive psychology, positive organizational behavior, and positive psychological capital as a point of departure, this study focuses on the positive capacity of optimism. Although all the criteria-meeting positive organizational behavior constructs might be relevant independently or when examined in combination, we suggest that for today’s bank employees’ optimism might be especially related to their performance improvement in the new competitive landscape facing this industry. The next section outlines the meaning of optimism and reviews why optimism in particular might be related to desirable employee performance outcomes in the banking sector.
The Meaning of Optimism
The quest for a deeper understanding of optimism is not new. Great historical figures from Buddha to Sophocles to Nietzsche have contemplated the nature of optimism. America’s founders proclaimed the importance of the “pursuit of happiness” in the Declaration of Independence. In 1952, New York minister Norman Vincent Peale published the famous “Power of Positive Thinking,” a mass-market book that proved inspirational to millions of readers. As applied to this study, optimism is drawn from positive psychology and positive organizational behavior. In staying consistent with the previously outlined positive organizational behavior criteria described by Luthans (2002a, 2002b), the type of optimism described here is both realistic and flexible (e.g., see Peterson, 2006) and is committed to a scientific approach for accumulating a sustainable, impactful body of knowledge for leadership and human resource development and performance impact.
Tiger (1979) has offered the following widely recognized definition of optimism: “a mood or attitude associated with an expectation about the social or material future, one which the evaluator regards as socially desirable, to his or her advantage, or for his or her pleasure.” This definition implies evaluation depending on cognition and emotions. Going further, optimism can be differentiated between “little” and “big” optimism (Peterson, 2000, 2006). Little optimism refers to specific expectations about positive outcomes (e.g., I will find a convenient parking space this evening”). Big optimism refers to larger and less-specific expectations (e.g., “Our country is on the verge of something great.”).
As opposed to Scheirer and Carver (1985) who view optimism as a positive future expectancy, the well-known “learned optimism” of Seligman (1998) views it in terms of explanatory style with roots in attribution theory. According to Seligman, for bad events optimists make external (not their fault), unstable (temporary setback), and specific (a problem only in this context) attributions. Conversely, pessimists interpret bad events in terms of internal (their own fault), stable (will last a long time), and global (will undermine everything they do) attributions. Based upon this attributional framework, optimists take credit for positive occurrences in their lives. They view the causes of these positive outcomes as being within their power and control. Optimists would expect these causes to continue into the future (i.e., complementary to the Scheirer and Carver perspective of future expectancy) and to apply to other aspects of their life. When faced with a negative situation, because optimists attribute the causes to be external, temporary, and specific to the situation, they continue to remain positive about future events.
A pessimist would tend to adapt an opposite explanatory style. Typically, they would not give themselves credit for the positive situations that occur in their lives. In addition, the attributional causes that pessimists utilize tend to be temporary and situation-specific. They believe that positive events hold little chance of happening again in the future. Finally, pessimists tend to internalize the negative aspects of their lives. They assume that bad things will continue to happen into the future and threaten their long-term success at work and other parts of their life. Seligman (1998) and Peterson (2006) have also emphasized that optimism can be developed (i.e., “state-like”) and have documented the positive impact it can have in a variety of life domains including the workplace.
Seligman (1998) and others (e.g., Peterson, 2000, 2006) have also described the importance of “flexible optimism,” which is the ability to use both optimistic and pessimistic explanatory styles and the adaptive capacity that allows for the use of alternative explanatory styles depending on the situation. In other words, “flexible optimism” faces reality with a positive outlook without dwelling unduly on the negatives. Similarly, Seligman (1998) and others (e.g., Schneider, 2001) have also highlighted the importance of “realistic optimism,” which does not take an extreme in internalizing good events and externalizing negative ones. Importantly, this approach has recognized the importance of understanding that there can be a downside to too much and/or false optimism. Schneider (2001) has outlined three forms of “realistic optimism” which include the following:
1. Leniency for the past, or the benefit of the doubt principle (accepting what cannot now be changed, not second guessing yourself, and preventing the debilitating effects of perfectionism);
2. Appreciation for the present, or the “appreciate the moment” principle (staying alert to the positive aspects of the current situation); and
3. Opportunity-seeking for the future, or the windows of opportunity principle (an assignment or project is viewed as a challenge, not a problem).
Finally, there is considerable evidence that optimism is related to many desirable outcomes (Seligman, 1998). In total, Peterson (2006: 114) has recently summarized that optimism has been linked to “positive mood and good morale; to perseverance and effective problem solving; to academic, athletic, military, occupational, and political success; to popularity; to good health; and even to long life and freedom from trauma.” Scheirer and Graver (1985) have described optimism as related to the human performance processes of goal attainment and self-regulation. Specifically, optimists plan ahead for handling obstacles that might thwart their goals. They also exhibit confidence, that in spite of difficult obstacles, they will still persist in achieving their goals.
Optimism and Workplace Performance
Previous research has shown that optimists are more likely to formulate a plan of action for difficult situations (Strack et al. 1987), are less likely to give up (Seligman, 1998), and have a more positive outlook on stressful situations (Carver & Gaines, 1987). These findings lend strong support for the notion that optimism can be closely linked with workplace performance. There are also a few directly relevant studies that have demonstrated the relationship between optimism and sales personnel and their performance (Schulman, 1999) and even cross-culturally between the level of optimism of Chinese factory workers and their rated performance and merit salary increase (Luthans et al., 2005).
Perhaps the best known study to relate optimism with employee performance was Seligman’s (1998) work with the large Metropolitan Life Insurance sales staff. In this comprehensive study, Seligman found that high optimism sales agents sold 37 percent more insurance their first two years on the job and had less turnover than their less optimistic counterparts. Seligman also noted that the optimistic sales agents who had initially failed the traditional industry selection test were better performers than those pessimistic agents who had passed the traditional screening device. Based upon the results of this study, Seligman was able to conclude that optimism is important in insurance sales positions, maybe even beyond technical knowledge.
Other research has also demonstrated a positive relationship between optimism and performance in a variety of workplace settings. For example, Tuten and Neidermeyer (2004) have noted that life orientation (optimism) has a significant and inverse relationship with stress (r = -.45, p
Although the linkage between employees’ optimism levels and positive workplace outcomes has been promising, more research in other settings is needed. We propose that the banking industry is a good candidate to expand this research since the traditional sources of competitive advantage continue to be eroded in this industry. For the first time many banks are now searching for additional ways to enhance and leverage their existing resources for sustained performance. This study explores the possibility that identifying and enhancing the positive psychological capacity of optimism in a bank’s human resources might be a source of competitive advantage that is valuable, rare, and difficult to imitate. An expanded framework which goes beyond economic and human capital into psychological capital may be a way to differentiate an organization from industry competitors. Therefore, in order to take the initial step in meeting this challenge, the purpose of this study is to explore what relationship a bank employee’s level of optimism has with their performance. Specifically, the following hypothesis was investigated:
A bank employee’s optimism is positively related to the employee’s job performance and job satisfaction.
To test the hypothesis, a sample was drawn from bank employees working in a metropolitan bank in the Midwest. The ninety employees who volunteered to participate included both mid-level managers (N= 27) and tellers (N= 63). Participants were informed verbally and in writing that the survey they were taking would measure psychological variables. Performance appraisal data (completed by the participant’s direct supervisor and supplied by the bank’s Human Resource Management Department) was also obtained. Participants also self reported an assessment of their overall performance evaluation for the past year and their performance relative to others in similar positions, and provided demographic information. The study participants were reassured that the results of the survey and the job-performance data provided by the Human Resource Management Department would be kept strictly confidential and that the results would only be reported in the aggregate. The mean age of subjects was 37 years for both the manager and teller groups, mean service was 11 years for the manager group and 8 years for the teller group, and the majority of all respondents had completed at least two years of education beyond high school. The sample was predominantly Caucasian (82% of managers and 78% of tellers) and female (92% of managers and 78% of tellers).
Measures and Instruments
Participants were asked to rate themselves on several items of a scale that measured their state of optimism. Scheier and Carver (1985) developed the Life Orientation Test (LOT) to measure this construct. The LOT scale was later modified by Shifren and Hooker (1995) to reflect a more current state of optimism. In particular, the wording of the scale was changed from “In general” to “Right now” (e.g., “Right now I am optimistic about the future”). This modified state-like scale was utilized for the purpose of this study to meet the positive organizational behavior criterion of being open to development and performance management. The twelve-item scale contained four positive direction statements (“I always look on the bright side of things.”), four negative (reversed-scored) direction statements (“If something can go wrong for me, it will.”), and four filler items. The Cronbach’s Alpha for the original LOT scale was 0.76, which indicated good internal consistency of the items. Scheier and Carver (1985) also compared their scale with others measuring self-esteem, internal-external control, powerlessness, and other constructs to check the convergent and discriminant validity of the scale. The modified LOT scale developed by Shifren and Hooker (1995) has also demonstrated good reliability (Cronbach’s alpha = .75). In the present study, a strong internal reliability coefficient of .87 was found.
Supervisory appraisal data were utilized to measure the participants’ performance. The data were provided by the Human Resource Management Department, and include ratings along six dimensions: quality customer service (the degree of attention, recognition, friendliness, helpfulness, thoroughness and sincerity expressed when helping customers; awareness of customer service concepts); productivity/flexibility (the amount of work and efficiency with which it is produced; willingness to take on changing tasks and schedules); quality of work produced (the accuracy, neatness, and thoroughness with which jobs are performed); initiative (active pursuit of tasks); reliability (dependability in reporting for work and working established schedules); and communication skills and working relationships (effectiveness in communicating with customers and coworkers; maintaining positive interaction by conducting self in the cooperative spirit of a team player). Participants were evaluated by their supervisor along a 4 point scale for each of these dimensions (4 = exceeds expectations, 3 = meets expectations, 2 = almost meets expectations, and 1= substantially fails to meet expectations). An average of the ratings for each participant’s six performance dimensions was used in the calculation of that participant’s overall supervisor performance rating.
Participants were also asked to self-report their approximate overall performance during the last year (with 1= excellent, 2=good, 3=fair, and 4=poor) as well as rank their performance relative to others they know in similar positions, along a 10 point scale (with 1=best performer, and 10=worst performer).
Participants rated their job satisfaction using a three-item scale adapted from Hackman and Oldham’s (1980) work design measure. The coefficient alpha for this measure was .89 in this study.
Since the optimism scores are not normally distributed, a Spearman’s Rho correlation test was utilized to examine the relationship between the optimism scores and the performance and job satisfaction variables. Table 1 presents descriptive statistics (overall means and standard deviations) and the correlation matrix for the study variables of the mid-level manager group, and Table 2 presents a similar matrix and statistics for the teller group of participants. As hypothesized, a significant and positive relationship was noted between a manager’s optimism and his/her performance, as evaluated both by the manager’s supervisor (r = .46, p
Similarly, a significant and positive relationship (r =.42, p
Consistency between a participant’s self-reports of performance and his/her performance rating by a superior was also apparent. As shown in Table 1, a significant and positive correlation (r = .71, p
Review of the histogram for optimism scores suggested that these scores could be broken into three separate groups. One group represented scores of less than or equal to 24 (n = 13), while the second group was comprised of scores ranging from 25 to 34 (n=57), and the third group included scores of 35 and greater (n = 20). A Kruskal-Wallis one-way nonparametric ANOVA test confirmed these three separate groups. Using these categories, a one-way ANOVA was conducted for the supervisor performance rating and a statistically significant difference (p
Although exploratory rather than a causal experimental study, this research did find a relationship between a bank employee’s optimism and his/her performance rating (as measured by the employee’s supervisor) and job satisfaction. There are implications from these results that future, possibly experimental, studies can expand upon. Potential moderators also need to be examined in order to fully understand the relationship. For example, since most of the employees were female, there were not enough males to study separately. Researchers have argued that gender can be a critical factor in shaping the development of optimistic or pessimistic explanatory styles (e.g., Wise & Rosqvist, 2006) so results from a more diverse data set might reveal moderating gender effects. Also, other positive organizational behavior states besides optimism need to be examined to determine their strengths relative to optimism. Ideally, research would test developed optimism as an intervention in a pretest-posttest experimental design compared to a randomly assigned control group that did not receive the intervention. This would help determine if optimism causes performance improvement.
Another limitation of the study was the fact that the level of state optimism in the bank employees was only measured at a single point in time, and after the performance data had been gathered. According to Shifren and Hooker (1995, p.60), this might be problematic, “because simply taking measurements at one or two points in time does not allow for the manifestation of lability in psychological processes.” In other words, it’s probable that state optimism levels will vary and that it might be more accurate to measure state optimism at several points over time in order to better predict performance outcomes.
Yet given these limitations, the results from this initial exploratory investigation provide at least partial support for the idea that optimism relates to work performance in the banking industry. In particular, the findings also indicate the need to focus future attention on how optimism training may be a critical part of management development. In examining the correlation between components of the overall supervisor performance rating, it is interesting to note that the “customer service” dimension was most strongly linked to optimism (r = .47, p = .01) for the sample of midlevel managers. This dimension measured the manager’s awareness of customer service concepts and ability to provide attention, recognition, helpfulness, and sincere care to customers. As argued by Bartel (2004), the incredibly competitive landscape in the banking industry today demands a retail bank must offer increasingly higher levels of customer service. Results from this exploratory study suggest that an organization’s ability to provide top quality customer service may be impacted by the optimism level of that organization’s midlevel managers. Other work-related studies have found that optimistic leaders tend to have more optimistic followers (Wunderley, Reddy, & Dember, 1998) and optimistic managers and employees have greater retention and less stress than their more pessimistic counterparts (e.g., Schulman, 1999; Wanberg, 1997). While the potentially ‘contagious’ aspect of optimism and links to stress levels were not explored in this study, it is apparent that the optimism of midlevel managers in this bank study is related to their performance outcomes and job satisfaction. Optimism might be effectively used as a screening criterion for initial hiring or management development selection decisions. In addition, research has indicated optimism has a state-like quality and is therefore open to change and development (e.g., see Luthans, 2002b; Luthans and Youseff, 2004), suggesting good application for management training programs.
Various approaches to developing optimism exist, including the frameworks proposed by Schneider (2001) and Seligman (1998) for enhancing “realistic optimism”. These approaches essentially call for individuals to use their life experiences as the base for changing their beliefs and internal dialogue. To summarize, this approach to develop optimism suggests that first one needs to reflect, diagnose, and identify self-defeating beliefs when faced by adversity. Next, one needs to reflect and evaluate the accuracy of their beliefs. Finally, if one’s beliefs are discounted or questioned, they should be replaced with more realistic, constructive, and accurate beliefs. This systematic approach to developing and managing optimism could be implemented and facilitated within banks by use of mentoring and training programs that offer corrective feedback provided by a 360-degree feedback program. The highly focused micro-intervention approach (Luthans et al, 2006) which uses scenarios to help build proactive, realistic, and optimistic thought processes, also offers another viable option that banks could use to enhance and strengthen employee optimism. Recent experimental studies have demonstrated these web-based micro-training interventions to be effective in developing the optimism of employees from a wide array of industries (Luthans, Avey, & Patera, in press).
Conclusions and Recommendations
The results from this study indicate key links between self-reported optimism, performance outcomes, and job satisfaction. In combining the results from this exploratory study with previous empirical research which has shown a strong connection between optimism and work performance (e.g., see Seligman, 1998), the following supported guidelines can be offered for the effective management of human resources within the banking industry. The first would be for banks to consider proactively developing and managing for realistic and flexible optimism as a way to generate better performance results. The findings from this study suggest that including a focus on optimism might be particularly powerful and effective in management development and training efforts. Further, the link between optimism and job satisfaction suggests that fostering the optimism in employees might also aid in creating a workforce that is not only productive, but also loyal and committed in an incredibly dynamic industry. Another recommendation would involve the placement of individuals with high levels of optimism in areas of the banking organization that “fit” their psychological strengths. In his comprehensive review concerning the future of optimism, Peterson (2000) noted that people high in optimism tend to have better moods and are more likely to persevere and be successful. Results from the present study demonstrated a significant relationship between optimism and midlevel manager performance measures. Given these results, the ability to manage stress and to be persistent in completing difficult tasks would seem to be consistent with high performance in especially difficult and high stress jobs within the bank (e.g., branches with exceptionally high traffic volume, new branch locations not yet fully established, etc).
As the world of retail banking becomes ever more competitive, the challenges faced by bank employees will only continue to increase. Rapid changes in technology, seemingly constant organizational redesign, and an increasingly demanding public are just a few of the pressures faced by those working in the banking industry. In particular, the midlevel managers and tellers are clearly on the front level “firing line” and constantly impacted by pressures to increase efficiency and productivity. The results from this study suggest that value can be gained by recognizing the positive psychological resource of optimism. Research has shown the impact that high performance work systems can have on firm performance in the banking industry (Delery & Doty, 1996). Our findings suggest that further extending the focus on high performance work practices to include the positive psychological capacity of optimism could yield additional firm strength and competitiveness.
This study provides empirical (albeit exploratory) evidence of the link between optimism and performance in the increasingly competitive banking industry. In addition, the findings help to further advance an appreciation of how the emerging positive psychological capital approach might yield greater insight regarding how organizational success can be attained. Optimism has been identified as an important component in determining the work performance of employees in the areas of sales, customer service, manufacturing, (e.g., Seligman, 1998; Schulman, 1999; Luthans et al., 2005), and now, banking. These combined studies contribute to the advancement and appreciation of positive psychological capital and provide further evidence of the linkage between optimism and performance. We are “optimistic” that the results from this study can contribute in at least a small way, and for sure in a positive way, as one approach for meeting the complex challenges that lie ahead for bank employees, as well as for human resources in general.
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Susan M. Jensen, University of Nebraska at Kearney
Kyle W. Luthans, University of Nebraska at Kearney
Sandra A. Lebsack, University of Nebraska at Kearney
Richard R. Lebsack, University of Nebraska at Kearney
About the Authors
Susan M. Jensen is an Assistant Professor of Management at the University of Nebraska at Kearney, teaching courses in organizational behavior, entrepreneurship, and business strategy. Susan holds a bachelor’s degree in business administration from the University of Kansas, an MBA from Washington University in St. Louis, and a Ph.D. in organizational behavior from the University of Nebraska. She has great appreciation for the challenges faced by bank employees due to her prior experience as a National Bank Examiner. She has published and continues to do research focused on the link between positive organizational behavior, performance, and leadership.
Kyle W. Luthans is a Professor of Management at the University of Nebraska at Kearney, teaching classes in human resource management and business strategy. He holds a bachelor’s degree in business administration, M.A., and Ph.D. in the management area from the University of Nebraska-Lincoln. Kyle has published previous research which has outlined the linkage between human resource management high performance work practices and organizational performance. Kyle also has an active interest in researching the relationship between positive organizational behavior and employee performance in the service sector.
Sandra A. Lebsack, Associate Professor in the University of Nebraska at Kearney Management Department, teaches Business Statistics and Intermediate Statistics. She earned her bachelor’s degree from Fort Hays State University in Kansas and her Master of Arts from Mankato State University in Minnesota. Her PhD is in Applied Statistics from the University of Northern Colorado. She has published research focused on team teaching, positive organizational behavior and linear programming.
Richard R Lebsack is a Professor of Management at the University of Nebraska at Kearney. He is currently teaching management principles and organizational behavior classes. His bachelor’s and master’s degrees are from Fort Hays Kansas State University and he earned a Ph.D. from the University of Northern Colorado. His interest in banking is fueled by many of his former students who are employed in the banking industry, and his publication interests include team-teaching, linear programming, and positive organizational behavior.
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