Psychological Capital and Job Performance: The Mediating Role of Work

Attitudes
U.W.M.R.Sampath Kappagoda
Doctoral Student, School of Graduate Studies, Management and Science University, Malaysia
E-mail: [email protected]

Prof.Dr. Hohd.Zainul Fithri Othman

Management and Science University, Malaysia

Prof.Gamini De Alwis
University of Colombo, Sri Lanka

Abstract
The purpose of this study was to investigate the relationships among Psychological Capital (PsyCap), work
attitudes and job performance of the employees in the banking sector in Sri Lanka. The sample consisted of 176
managers and 357 non - managerial employees. A questionnaire was administered among the employees as the
measuring instrument. The collected data were analyzed using correlation coefficient and regression. The results
of the study indicated that there was a significant positive relationship between PsyCap and job performance,
PsyCap and work attitudes, work attitudes and job performance. Work attitudes were found to mediate the
relationship between PsyCap and job performance of the employees in the banking sector in Sri Lanka.

Keywords: Psychological Capital, Job performance, Work attitudes, Mediating Effect

1. Introduction
The banking sector is the dominant sub sector within the financial sector in Sri Lanka. Banks play a vital role in
shaping up the economy of any country. The failure of a single bank can lead to the failure of the entire
economy. The overall performance of the banking sector directly affects to the other industrial and service
sectors of the economy. The success of the banking sector as a service organization largely depends on the
customer satisfaction. The employees are the key factor in providing better service to their customers and
ultimately it helps to improve the overall performance of the banks. The bank employees play an important role
in delivering high quality services, promoting the corporate image and improving customer satisfaction
(Karatepe and Tekinkus, 2006). According to Gabbott and Hogg (1997) employees’ Job Performance (JP) is a
key individual outcome in the financial and banking sector. Thus, the enhancing the JP of the employees is a
high priority of any manager in the banking sector.

In reviewing the theoretical and empirical evidence, researchers have identified different factors that can be
affected for JP. Some researchers pointed out the importance of positive psychological capabilities of the people
as a new approach to enhance the JP of the employees after extended the concepts of positive psychology into
the work place. Among them a newly developed concept of PsyCap has given much attention in the recent past.
Luthans and colleagues define PsyCap as an individual‘s positive state of development characterized by hope,
confidence, optimism and resilience (Luthans, Luthans & Luthans, 2004). Most of the research in PsyCap has
been conducted by Luthans and his colleagues in the United State and China showed that the positive
relationship between PsyCap and JP. There have been relatively few empirical studies on PsyCap in Asia.
However in Sri Lankan context thus far this relationship has not been tested. In turn, the work attitudes of the
Sri Lankan people are different from other countries. Therefore, it is not reasonable to predict a similar
relationship between PsyCap and JP as it is in the other countries.

Work attitudes are an individual’s general attitude towards his or her job and the organization. The majority of
the researchers have found Job Satisfaction (JS) and Organizational Commitment (OC) as two important work
attitudes in the organization. JS is a subjective measure of worker attitudes, that is, an individual’s general
attitudes to his or her job (Robbins, 2003).OC is the psychological attachment or affective commitment formed
by an employee in relation to his/her identification and involvement with the respective organization (Porter et
al,. 1974). It is an individual‘s feelings of attachment and connection toward their organization. JS and
commitment are said to be antecedents for a wide range of desirable organisational outcomes such as JP and
absenteeism as well as turnover intentions (Chugtai & Zafar, 2006). Various studies have examined the
relationship between PsyCap and employee-related attitudes. A meta-analysis conducted by Avey et al. (2011)
has illustrated that PsyCap has been positively related to desirable employee attitudes and negatively related to
undesirable employee attitudes.

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In reviewing the literature, there exists a substantial amount of research on the relationship between PsyCap and
JP whereas some researchers have found direct relationships between PsyCap and work attitudes and work
attitudes and JP. Anyway, the mediating effect of work attitudes on the relationship between PsyCap and JP has
not been examined in previous researches. In the review of existing research literature in Sri Lanka, up to date,
any research has not been conducted in any context on the consequences of PsyCap or the mediating effect of
work attitudes on the relationship between PsyCap and JP.

1.1 Problem Statement

Some researchers have found direct relationship between PsyCap and JP. In turn, relationships between PsyCap
and work attitudes, work attitudes and JP have been empirically established. In reviewing the literature, there
were no researches on the direct impact of PsyCap on JP or the mediating effect of work attitudes on the
relationship between PsyCap and JP in Sri Lanka. Therefore, the problems addressed in this study are to
investigate:

1. How and in what ways does PsyCap influence on JP in the banking sector in Sri Lanka?
2. How and in what ways does work attitudes influence on JP in the banking sector in Sri Lanka?
3. How and in what ways does PsyCap influence on work attitudes in the banking sector in Sri Lanka?
4. Do work attitudes mediate the relationship between PsyCap and JP in the banking sector in Sri Lanka?

1.2 Objectives of the Study

1. To identify the relationship between PsyCap and JP of the employees in the banking sector
2. To investigate the impact of PsyCap and work attitudes of the employees in the banking sector
3. To identify the relationship between work attitudes and JP of the employees in the banking sector
4. To identify the mediating effect of work attitudes on the relationship between PsyCap and JP among
the employees in the banking sector

2. Literature Review
2.1 Psychological Capital
Luthans and colleagues developed the concept of Psychological Capital (PsyCap) (Luthans et al., 2007).They
define PsyCap as “an individual`s positive psychological state of development characterized by self-efficacy,
hope, optimism and resilience”. PsyCap is positively and uniquely related to the field of organizational behavior
because it is based on theory and research, measurable, state-like or open to development, and related to positive
work outcomes (Luthans, 2002a, b). PsyCap as well as each of its constituent resources have been considered as
state-like in the positive psychological literature (Bandura, 1997; Masten & Reed, 2002; Luthans, 2002a, b).
According to theoretical and empirical evidence, it can be concluded that PsyCap as a second order core
construct (Luthans et al., 2007). The first and most theoretically developed and researched dimension of Psyap
is self-efficacy. It has been received more research support. This dimension has been best matched with all the
POB criteria (Luthans, 2002a). Stajkovic and Luthans (1998) defined the concept of self-efficacy relevant to
work place as person’s confidence of his or her abilities to make ready for the motivation, cognitive resources
and a way of acting necessary to effectively perform a specific task within a certain context. According to
Snyder and colleagues (1991) hope is a “positive motivational state that is based on an interactively derived
sense of successful.” It is also included agency and pathway components. Agency is goal directed energy and
pathway means planning to achieve goals. Snyder (2000a, b) defined hope as “both the willpower (agency) and
way power (pathways) that you have for your goals”. It is the will for desired goal (Snyder, 2000; Snyder et al.,
1996). The pathways component of this definition involves the alternative ways and contingency plans to reach
those goals as they forecast obstacles to achieve the expected goals (Snyder, 1996, 2000). According to Snyder,
(2000a) agency and pathways thinking are interrelated and operate in a combined, iterative manner to generate
hope. In general, optimist is a person or positive thinker who expects good things to happen while a pessimist
expects worse (Carver et al., 2005). Anyway, in positive psychology based on empirical theory and research it
has a specific meaning. Tiger (1979) defined optimism as 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. Seligman’s explanatory style model and Carver and Scheirer’s self-regulatory model
are two theoretical models that have been used to define optimism (Peterson, 2000). According to Masten &
Reed (2002), lot of theory and research on resilience have been taken from clinical psychology based on the
studies of adolescent children who have bounced back from major difficulties. In general, it can be defined as an
adaptive system which enables an individual to rebound or bounce back quickly from a setback or failure. In
positive psychology, resilience is a positive adaptation process that can rebound in the context of significant
adversity or risk (Masten & Reed, 2002). As adapted to the work place, Luthans (2002b) defined resilience as
“the positive psychological capacity to rebound, to ‘bounce back’ from adversity, uncertainty, conflict, failure,

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or even positive change, progress, and increased responsibility.” Based on this definition, it can be concluded
that resilience is a positive strength that can be used to face adverse events as well as extreme positive events.

2.2 Job Performance

JP is the most extensively researched criterion variable in OB and the HRM literature (Borman et al., 1995). It is
an important construct in industrial and organizational psychology. According to Murphy (1989) performance
definitions should focus on behaviors rather than outcomes, because if the managers focus only the employees’
outcomes, employees will find the easiest way to achieve the outcomes without considering other important
behaviors. Campbell et al., (1993) explain that performance consists of the behaviors that employees actually
engage in which can be observed. According to Moorhead and Griffin (1999), JP is all of the total set of work
related behaviors that the organization expects from the individuals to display. Motowidlo, Borman and Schmit
(1997) defined JP as behaviors or activities that are oriented towards the organization’s goals and objectives.
Similarly, Campbell, McHenry, & Wise (1990) defined JP as the observable behaviors that people do in their
jobs that are relevant to the goals of the organization. Motowidlo, Borman, and Schmit (1997) pointed out
performance as behaviors with an evaluative aspect. It should be the behaviors relevant to the goals of the
organization (Campbell et al., 1993).
Traditionally, JP was evaluated in terms of the proficiency with which as individual carried out the tasks that
were specified in their job description. Borman & Motowidlo (1993) supported this idea and stated that
traditionally performance has been conceptualized in terms of the execution and completion of well-defined task
(Shaffer and Shaffer, 2005).However, the changing nature of work and organizations has challenged the
traditional view of JP. In review of the literature on JP, in mid-1990, Borman and Motowidlo (1993) have
identified two classifications that can be explored the JP. The central difference between these two
classifications is in role performance and extra role performance. In role performance is the behavior that is
directly correlated with the job tasks or requirements and extra role performance is the behavior that is not
directly correlated with job task or requirements, but correlated with organizational outcomes (Shaffer and
Shaffer, 2005). Borman and Motowidlo (1993) defined in role performance as task performance and extra role
performance as contextual performance.

2.3 Work Attitudes

Work attitudes are an individual’s general attitude towards his or her job and the organization. Work attitudes
can be defined as an employee‘s ―evaluation and opinions of their jobs and their commitment to the
organization (Verquer, Beehr, & Wagner, 2003 as cited in Aarons & Sawitzky, 2006). The majority of the
researchers have found JS and OC as two important work attitudes in the organization. Robbins (2003) defined
JS as a subjective measure of worker attitudes, that is, an individual’s general attitudes to his or her job. An
employee with high JS holds positive attitudes towards their job and an employee with high job dissatisfaction
holds negative attitudes towards his or her job. Ivancevich and Mattson (2005) explained JS as an attitude that
individuals have towards their jobs which stems from their perception of their jobs and the degree to which there
is a good fit between the individual and the organization. Robbins & Judge (2007) defined JS as a positive
feeling about one’s job resulting from an evaluation of its characteristics. They further explained that employees
that have high levels of JS hold positive feeling about their job, while dissatisfied employees hold negative
feeling about their job. George and Jones (1996) defined it as “the collection of feeling and beliefs that people
have about their current jobs. Spector (1997) define JS as how employees feel about their overall job and
various dimensions of their jobs. Work itself, pay, promotion, supervision, coworker, working condition are the
mostly accepted dimensions of JS. According to Poter et al., (1974) OC refers to the psychological attachment
or affective commitment formed by an employee in relation to his/her identification and involvement with the
respective organization. Moreover, they define it as “an attachment to the organization, characterized by
intention to remain in it, identification with the values and goals of the organization, and a willingness to exert
extra effort on its behalf.” It is considered to be the linkage between the individual employee and the
organization because of individuals consider the extent to which their own values and goals related to that of the
organization as part of OC.

2.4 Psychological Capital, Work Attitudes and Job Performance

Luthans (2002a) emphasized that if any concept to consider as a positive psychological construct, it should be
helped to improve the performance. Luthans and his colleagues stressed the ability of PsyCap to improve the
performance. Lots of researches have examined the contribution of each construct of PsyCap on employee
performance. Bandura (1997) named self-confidence employees as good performers. According to his
explanation, if the employees have high self-efficacy, they believe they can succeed. As a result they put more
effort on the given task. When employees try harder to succeed, they generally perform better. It means that
self-efficacy correlates with JP. According to Multiple meta-analyses self-efficacy has positively and strongly
correlated with JP (Stajkovic & Luthans, 1998a; Bandura, 2000; Bandura & Locke, 2003). Luthans, Avolio,

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Walumbwa, & Li, (2005) found that a relationship between Chinese factory workers’ hope and supervisory
rated performance. Similarly, hope has been found as a positive predictor of JP in different researches in
different context (Luthans et al., 2005; Luthans, et al., 2007; Peterson & Luthans,2003; Youssef & Luthans,
2007). Adams et al., (2002) found that hopeful employees are more effective than the low hopeful employees.
According to Bandura (1997) self-efficacious and hopeful employees perform better because these employees
accept challenges and put more efforts to achieve goals owing to their high efficacy. And also they identify sub
goals and strategies to achieve those goals. According to Corr & Gray (1996) optimism has positively correlated
with JP because when the employees believe that they can succeed, they are less likely to give up the task and
put forth more effort to accomplish the goal. Seligman (1998) found that positive relationship between optimism
and JP among the insurance sales agents. Luthans et al., (2005) found similar result in Chinese factory workers.
Youssef and Luthans (2007) reported positive relationship between optimism and employees performance.
Maddi (2005) stated that the important of this psychological capacity (resilience) in enhancing the performance
of the employees in the turbulent environment. According to Seligman (1998) optimism is positively and
significantly correlated with JP of insurance sales agents. Similar result was found by Youssef and Luthans
(2007). Luthan et al., (2005) found that significant relationship between resilience and rated performance of the
Chinese workers. The composite effect of PsyCap as a multi-dimensional construct may be significantly and
positively correlated on JP. Avey & Nimnicht (2009) found that PsyCap (self-efficacy, hope, optimism and
resilience) is positively correlated with managers’ evaluations of employee performance in the two field studies.
Some researchers have found similar results (Avey & Nimnicht, 2009; Luthans et al., 2007).Stajkovic (2006)
pointed out the importance of combined effect of four facets of PsyCap to improve performance. Fredrickson
(2001) suggests that “higher levels of positivity will contribute to maintaining higher levels of individual
motivation and performance.”
For the purpose of this study work attitudes defined as an individual’s general attitude towards his or her job and
the organization. JS and OC were considered as two dimensions of work attitudes. According to the empirical
evidence, PsyCap has positively correlated with JS and the correlation between PsyCap and JS is stronger than
correlation between the individual construct of PsyCap and JS. Appollis (2010) stressed that the relationship
between PsyCap and JS is strong and linear among the employees who worked in the tourism sector. Further,
this finding indicates highly self-confidence, hopeful, optimistic and resilient employees have high level of JS.
According to a research done by Larson & Luthans (2006) in production workers who worked in small
Midwestern factory, they found that hopeful production workers were more satisfied with their jobs. A similar
result was found by Youssef & Luthans in 2007. They found that employees’ level of hope was correlated with
JS. Peterson & Luthans (2003) have confirmed this relationship and stressed that hopeful managers who worked
in the fast food stores have showed more satisfaction. In general, the employees’ higher level of hope will lead
to the improvement of their JS because the hope level of employees enable them to self-motivate and plan their
activities so as to gain best of their situation (Youssef & Luthans, 2007). Anyway, researchers have pointed out
the higher level of JS can be found when the hope is accompanied by the level of self-efficacy and optimism of
the employees and the ability that they can respond favorably to setbacks. Youssef and Luthans (2007) and
Cetin (2011) found that hopeful, optimistic and resilience employees are more satisfied with their jobs. Larson
& Luthans (2006) with their exploratory study in small factory found that positive relationship between the level
of PsyCap of production worker and their JS. Luthans et al., (2007) did a research taking two samples of
management students, technicians and engineers. It revealed positive relationship between PsyCap and JS. The
relationship between PsyCap and JS was stronger than the relationship between each construct of PsyCap and
JS. Luthans et al., (2008) found similar result and stressed that there was a positive relationship between general
PsyCap and JS.
To date there are very few studies that have explored the relationship between PsyCap and OC. Among them,
Luthans, Avolio, Walumbwa, & Li, (2004) found that PsyCap is positively related to OC. Similar to this finding,
Youssef & Luthans (2007) found that the four construct of PsyCap (self-efficacy, hope, optimism and
resiliency) have correlated with OC. Again, Luthans with Bruce, Avolio & Avey, (2008) confirmed the ability
of PsyCap to influence the OC. Shahnawaz & Jafri (2009) have done a research using public and private
organizations in India and found that slight positive relationship between PsyCap and OC among the managers.
Sinha, Talwar, and Rajpal (2002) stated that there was a positive relationship between self-efficacy and OC in a
sample of 167 managers. Larson & Luthans (2006) with their exploratory study in small factory found that
positive relationship between the level of PsyCap of production worker and their OC. A similar result was found
by Youssef & Luthans, (2007). Cetin (2011) found a positive relationship between three construct of PsyCap
(hope, optimism and resilience) and OC.
Wei and Chu (2008) found that a work attitude has a positive relationship with JP with their survey conducted
on employees in the financial service industry. Kappagoda (2013) found similar results from Sri Lankan
banking sector. According to his research, he found a significant positive relationship between work attitudes
and JP. Work attitudes have significantly explained 35.9% of the variance in the JP of the non-managerial
employees in the banking sector. The relationship between JS and JP has received much attention from the

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Human Relations movement in 1930s. Overall JS and JP (Birnbaum and Somers, 1993; Dart, 1988; Igbaria,
1991; Meyer et al., 1989; Shore and Martin, 1989) as well as multi faced JS and JP have received significant
attention in the past research. Herzberg, Mausner, and Snyderman (1959) believed that productivity will be
increased with the improvement of the moral of the employees. However, Lawler & Porter (1967) explored that
the high performed employees were more satisfied employees because they received greater rewards. In the
1985s, this relationship was reversed and found that more satisfied employees are better performers. According
to ‘happy–productive worker hypothesis’ (Kluger & Tikochinsky, 2001; Staw & Barsade, 1993), people
believed that happy employees are more satisfy with their jobs and it will help to perform better on their jobs.
According to Iaffaldano & Muchinsky, (1985) research has reported a positive correlation between individuals’
JS and their performance. However they concluded that satisfaction and performance are slightly related. In this
connection, they used facet level of JS. JS of the employees may be a better predictor of JP (Judge, Thoresen,
Bono, & Patton, 2001). Once again, Judge, Thoresen, Bono, & Patton, (2001) found much stronger positive
correlation between JS and individual performance in the more recent meta-analysis. They used global level of
JS. Moshavi & Terborg (2002) revealed a positive relationship between JS and JP among the sample of
contingent and regular customer service representatives. Spector (1997) suggest a potential relationship between
satisfaction and performance.
Several researchers have focused their studies on the relationship between OC and JP (Mowday et al.,
1974).According to empirical evidence it has been given mixed results. The results have been mixed (Becker,
Billings, Eveleth, & Gilbert, 1996). OC has positively correlated with JP of the industrial salespeople (Meyer et
al., 1989 & 2002). Vinchur et al., (1998) explored similar result and said that OC is one of the variables that
influence on JP. In addition, Morrow (1993) pointed out that high committed employee as high performing
employees. Jaramillo et al., (2005) found a positive correlation between OC and JP with the result of meta-
analysis which was conducted using 51 empirical studies. Chen, Silverthrone and Hung (2006) found a positive
correlation between OC and JP among accounting professionals. Mathieu & Zajac (1990) found weak positive
relationship between OC and JP but they pointed out a tendency of high commitment of the employees to
perform well. Other researchers have identified insignificance or negative relationship between two variables
(Leong et al., 1994). This different result can be predicted owing to different conceptualization of commitment.
Rashid, Sambasvani and Joari (2003) examined 202 managers in Malaysian companies and they found that
corporate culture and OC are correlated on the performance. Lots of researches have typically focused on
affective commitment and JP relationship. Affective commitment was the most significant predictor of
individual performance (Brett et al., 1995). According to Meyer and Allen (1996) there was a positive
relationship between affective commitment and JP. Similar result was found by some other researchers (Luchak
& Gellatly, 2007; Meyer et al.1989; Meyer et. al 2002). Affectively committed employees performed better than
those who are not (Meyer et al., 1989; Mowday et al., 1974). Affective commitment has been positively
correlated with supervisor ratings of JP among laboratory technicians (Konovsky & Cropanzano, 1991).Similar
result was found among the first-level managers in food service (Meyer et al 1989), and employees from various
levels and positions (Mayer & Schoorman, 1992). In generally, it can be predicted a positive correlation
between OC and JP because committed employees are happy to be members of the organization. They have
positive attitude about the organization. Thus, they intend to give best for the organization so as to achieve the
goals of the organization. As a results JP can be increased. Based on these empirical evidences, the following
hypotheses are formulated.

H1: There is a positive relationship between PsyCap and job performance of the employees in the
banking sector in Sri Lanka.
H2: There is a positive relationship between PsyCap and work attitudes of the employees in the banking
sector in Sri Lanka.
H3: There is a positive relationship between work attitudes and job performance of the employees in the
banking sector in Sri Lanka.
H4: Work attitudes mediate the relationship between PsyCap and job performance of the employees in
the banking sector in Sri Lanka.

3. Research Methodology
3.1 The Research Design
The current study employed a correlational research design in order to explore the relationship between PsyCap
(independent variable) and JP (dependent variable).Work attitudes is the mediating variable. This field study is
conducted in natural environment in banking sector under non-contrived settings. The unit of study is individual.

3.2 Population and Sample

The population of this study was consisted of managers and non-managerial employees in the banking sector in
Sri Lanka. The sample for this study was initially derived by randomly selected 220 managers and 440 non -

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managerial employees who employed in banking sector in Sri Lanka throughout the seven provinces. The
response rate was 81%.

3.3 The Sampling Method

Firstly, The Systemically Important Banks (SIBs) and Systemically Important Specialized Banks (SISBs) were
selected because of their high performance and they posses large proportion of assets of the banking sector.
Then, 10% branches from SIBs and SISBs in seven provinces were selected using a convenient sampling
method. Finally, an assistant manager and two non-managerial employees were selected from each branch with
the consultation of the branch manager.

3.4 Measures
The managers and non-managerial employees’ JP was the dependent variable and PsyCap of the managers and
non-managerial employees was the independent variable of this research. The work attitudes are the mediating
variable. These variables were measured using standard instruments. The questionnaire was separated into four
sections for demographic data, PsyCap, JP and work attitudes. Seven questions were included to get the
demographic information. The employees’ PsyCap was measured by standard questionnaire which was
originally developed by Luthans and colleagues (2007).It was consisted of 24 questions and included 6 items for
each of the four components of hope, efficacy, resilience and optimism. JP intends to measure self-rated and
supervisor rated JP. Self-rated & supervisor JP was measured using two dimensions (task performance,
contextual performance) and 21 questions. Work attitudes were measured using two dimensions (JS and
affective commitment) and 19 questions.

3.5 Validity and Reliability

Luthans, et al (2007) have constructed PsyCap questionnaire including 24 questions. According to them, they
have appointed an expert panel to select items for each four construct of PsyCap (self-efficacy, hope, optimism
and resilience). The panel has selected six items for each of the four construct so as to secure the content and
face validity. They have adapted wordings to match with workplace. This questionnaire was validated by using
the confirmatory factor analysis across multiple samples (Luthans, Avolio, Avey, & Norman, 2007).However,
three items of this instruments were dropped owing to lack convergent validity.
Task performance and contextual performance were used to measure JP. Task performance instrument
developed by Borman, Ackerman and Kubisiak’s (1994) and contextual performance questionnaire developed
by Motowidlo and Van Scotter (1994) were used in this study. Task Performance was measured using three sub
dimensions (task proficiency, efficiency and problem solving). This instrument includes 08 questions.
Contextual performance was measured using five sub dimensions (volunteering to carry out task activities,
persisting with extra efforts, helping and cooperating with others, following organizational rules and procedures,
endorsing, supporting organizational procedures) and the instrument includes 13 items.

Work attitude was measured using JS and affective commitment. JS was measured using 6 sub dimensions
(work itself, pay, promotion, supervision, coworkers, working condition) and 12 questions. Affective
commitment was measured using 8 questions developed by Allen and Meyer in 1990.It has three dimensions
called emotional attachment, identification of the organizations, and involvement. Seven questions were
included in the final instrument.

The table 01 shows the Cronbach coefficient alpha for each instrument. According to the data, it can be
concluded that the instruments possesses high reliability owing to the data.

Table 01. Cronbach Coefficient Alpha Value for Internal Consistency

Variables Alpha value

PsyCap 0.921
Job performance 0.926
Work attitudes 0.900

3.6 Methods of Data Analysis

The data analysis included univariate, bivariate and multivariate analyses. Collected data were analyzed using
the SPSS data analysis package. For the purpose of investigating the mediating effect, the three steps which
were recommended by Baron and Kenny in 1986 were used. According to these authors, as the first, the

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mediator should be predicted by the independent variable. The dependent variable should be predicted by the
mediator and the independent variable as the second step. Finally, the dependent variable should be regressed on
the independent variable, controlling for the mediator.

4. Results
According to the data in table 02, the level of PsyCap, JP and work attitudes are in high level among the
employees.

Table 02. Means, Standard Deviation and correlations

Variables Mean Standard 1 2 3

Deviation
1. PsyCap 3.86 .391 -
2. Work attitudes 3.87 .457 0.514** -
**
3. Job Performance 3.95 .328 0.481 0.377** -

** p < .01

Table 03. Results of Simple Regression Analysis

β R Square F value P value
Predictors: (Constant), PsyCap Dependent 0.481 0.231 159.65 0.00
Variable: Job Performance
Predictors: (Constant), PsyCap Dependent 0.514 0.264 190.63 0.00
Variable: work attitudes
Predictors: (Constant), work attitudes 0.377 0.142 87.80 0.00
Dependent Variable: Job performance

The data of table 02 represented the correlation coefficient of each variable. A significant positive relationship
can be seen between PsyCap and work attitudes (r = 0.514). The same results have been reported between
PsyCap and job performance (r = 0.481) and work attitudes and job performance (r = 0.377).Table 03 showed
the results of the regression analysis. According to the data of tables, PsyCap and work attitudes have
significantly and positively correlated to JP whereas PsyCap has also significantly and positively correlated to
work attitudes. Based on the results on correlational coefficient and regression analysis, hypotheses one, two
and three can be accepted.

Table 04. Hierarchical Regression with Variables

Job Performance
Step 01 Step 02
PsyCap β 0.481** 0.390**
Work attitudes β - 0.176**
R 0.481 0.504
R2 0.231 0.254
F value 159.65 90.22
** p < .01

According to the results of table 04, the introduction of work attitudes in the analysis reduces the impact of
PsyCap. The β has dropped from 0.481 (P<0.01) in step 01 to 0.390 (P<0.01) in step 02.

5. Discussion
The main objectives of this study were to investigate the mediating effect of work attitudes on the relationship
between PsyCap and JP and to identify the relationships among PsyCap, work attitudes and JP of the employees
in the banking sector in Sri Lanka. For this purpose, four hypotheses were formulated.
The results of correlation coefficient and regression analysis indicated that PsyCap of employees has
significantly and positively correlated to their JP. Therefore, the hypothesis one can be accepted according to the
statistical evidence. The PsyCap has significantly explained 23.1% of variance in JP. All the dimensions of
PsyCap have significantly and positively correlated with JP. The researcher evaluated the employees’ JP using
self-rated performance and supervisory rated performance to get a better picture regarding the employees’ JP.
Ultimately, JP was evaluated using the average of self-rated and supervisory rated JP. Supervisory rated JP was
somewhat low comparing with self-rated JP. However PsyCap has positively correlated with both self-rated and
supervisory rated JP. The result of this study was generally consistent with previous studies. Luthans and his
colleagues (2002a) stressed the ability of PsyCap to improve the performance. The results of this research
confirmed the findings of Luthans. Some researchers (Stajkovic & Luthans, 1998a; Bandura, 2000; Bandura &

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Locke, 2003; Snyder, 2000; Luthans, Avolio, Walumbwa, & Li, 2005; Corr & Gray, 1996) have found positive
relationships between each construct of PsyCap and JP. The findings of this research also agreed on the previous
findings.
A positive relationship between PsyCap and work attitudes was predicted as the second hypothesis. The data
shows that the relationship between PsyCap and work attitudes of the employees in the banking sector has
significantly and positively correlated. The results indicate that the employees who have high PsyCap are likely
to be satisfied and committed to their jobs. PsyCap of employees has significantly explained 26.4% of variance
of their job work attitudes. There was a significant linear relationship between PsyCap and work attitudes
(F=190.63). The result of this research was consistent with the studies of Luthans et al., (2007); Larson and
Luthans (2006); Aarons & Sawitzky, (2006).
There is statistical evidence to accept the third hypothesis which was formulated in this study. The work
attitudes of the employees have significantly and positively correlated with JP. It means that the employees who
are highly satisfied and committed are high performers in the banking sector. It has significantly explained 14.2
% of the variance in JP.
Furthermore, the researcher formulated a hypothesis to investigate the mediating effect of work attitudes on the
relationship between PsyCap and JP. For this purpose, the three steps which were recommended by Baron and
Kenny in 1986 were used. The result of table 04 indicated the ability of PsyCap to predict the work attitudes.
The results in tables 03 showed that JP can be predicted by PsyCap and work attitudes. The data suggested that
there is an evidence to prove the first and second steps of Baron and Kenny’s procedure. According to the
results of table 04, the introduction of work attitudes in the analysis reduces the impact of PsyCap .The β has
dropped from 0.481 (P<0.01) in step 01 to 0.390 (P<0.01) in step 02. Both PsyCap (β =0.390, P<0.01) and work
attitudes (β =0.176, P<0.01) remains a significant predictors in the last analysis. Therefore, according to Baron
and Kenny (1986), it can be assumed that there is a partial mediation in this case. Thus, the final hypothesis can
be accepted.

6. Limitations and Directions for Future Research

The results must be considered with several limitations. The data collection was confined to systemically
important banks and systemically important specialized banks is the first limitation of this research study.
Second limitation was of relying on self-reported data. The PsyCap, work attitudes of the employees were
measured according to the respondents’ own attitudes.

The present study has been provided many potential paths for future researchers. In this study PsyCap, work
attitues and JP were the major variables of interest. The research study attempted to demonstrate the mediating
effect of work attitudes. The further researches would be advantages to explore potential mediators except work
attitudes and moderators for the relationship between PsyCap and JP. This research focused only the
systemically important banks and systemically important specialized banks but other researchers can expand the
sample to the other banks, service organizations or different organizations in Sri Lanka.

7. Conclusion
Based on the results of the study, it can be concluded that there is a partial mediating effect of work attitudes of
the employees on the relationship between PsyCap and JP of the employees. In addition to that, the correlation
between PsyCap and JP, PsyCap and work attitudes, work attitudes and JP are significant and positive.
Understanding these relationships will be helpful to the strategists in the banking sector when they are
formulating strategies regarding their human resources.

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