International Journal of Hospitality Management 50 (2015) 926

Contents lists available at ScienceDirect

International Journal of Hospitality Management

journal homepage: www.elsevier.com/locate/ijhosman

Why is hospitality employees psychological capital important? The

effects of psychological capital on work engagement and employee
morale
Soyon Paek a,1 , Markus Schuckert b,2 , Taegoo Terry Kim c, , Gyehee Lee c,3
a
Faculty of Hospitality and Tourism Management, Macau University of Science and Technology, Avendia Wai Long, Taipa, Macau
b
School of Hotel and Tourism Management, The Hong Kong Polytechnic University, 17 Science Museum Road, TST-East, Kowloon, Hong Kong SAR, China
c
Department of Tourism Management, College of Hotel and Tourism Management, Kyung Hee University, 26 Kyungheedae-ro, Dongdaemun-gu, Seoul
130-701, Republic of Korea

a r t i c l e i n f o a b s t r a c t

Article history: This study examines work engagement as a partial mediator of the effect of psychological capital (Psy-
Received 24 February 2014 Cap) on employee morale in a sample of hotel employees. A survey was carried out with 312 front-line
Received in revised form 29 April 2015 staff from 15 ve-star hotels in Seoul, Korea. A one-month time-lag design (Time 1: PsyCap and work
Accepted 6 July 2015
engagement; Time 2: employee morale) was used to reduce potential common method bias. The hypoth-
esized relationships in the model were tested using structural equation modeling. The results suggest
Keywords:
that work engagement partially mediates the effect of PsyCap on job satisfaction and affective organi-
Psychological capital
zational commitment. Specically, front-line employees with high PsyCap are more engaged with their
Personal resources
Work engagement
work and more likely to display job satisfaction and affective organizational commitment. The study
Employee morale concludes with a discussion of its empirical ndings, strengths, theoretical contributions, and practical
Conservation of resources theory implications. Limitations and their implications for future studies are also reviewed.
Job demands-resources model 2015 Elsevier Ltd. All rights reserved.

1. Introduction another critical aspect, namely the psychological and attitudinal

Why is psychological capital (PsyCap) relevant? As Maltz et al.,
2003 point out, measuring organizational success is a continuous
challenge, requiring the use of different assessment approaches
which take both monetary and nonmonetary criteria into account.
Measuring various types of capital is one such approach. In other
words, the concept of capital is no longer conned to the mone-
tary/nancial context (previously the dominant approach), but now
extends towards a more differentiated understanding (Anheier
et al., 1995). Based on this development, it has been argued that
in order to be successful and sustainable, an enterprise needs to
assess different forms of capital, such as human, cultural, social, or
reputational. However, according to scholars such as Luthans et al.
(2008) and Avey et al. (2009), these approaches fail to measure
Corresponding author. Fax: +82 2 964 2537.
E-mail addresses: spaek@must.edu.mo (S. Paek),
markus.schuckert@polyu.edu.hk (M. Schuckert), tgkim@khu.ac.kr (T.T. Kim),
ghlee@khu.ac.kr (G. Lee).
1
Fax: +853 2882 5990.
2
Fax: +852 2362 9362.
3
Fax: +82 2 964 2537.
strengths of individuals as identied through components such as
motivation, work engagement, job satisfaction, and affective orga-
nizational commitment. Since existing paradigms do not properly
incorporate these employee assets, Luthans and Youssef (2007) and
Nelson and Cooper (2007) have driven the development of PsyCap
as a construct. They come from the perspective of positive organiza-
tional behavior, which in turn is based on the positive psychology of
Peterson and Seligman (2004). In this context, the concept of Psy-
Cap designates and measures the different behavioral states that
are ultimately relevant to the performance of an employee within
an organization (Luthans et al., 2007b).
Excellent employee performance is important and desirable in
all industries and sectors, but in the labor-intensive service indus-
tries, employees are a particularly important part of the product and
form the core of the service experience (Sltten and Mehmetoglu,
2011). Hospitality staff can deliver competitive advantage in terms
of building and maintaining host-guest relationships (Onsyen
et al., 2009) and quality, and building guest loyalty (Chi and Gursoy,
2009). Highly motivated and engaged employees are critical to
the success of service organizations and enterprises (Bakker and
Demerouti, 2008; Sltten and Mehmetoglu, 2011).

http://dx.doi.org/10.1016/j.ijhm.2015.07.001
0278-4319/ 2015 Elsevier Ltd. All rights reserved.
10 S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926
Hypothesis 2 (+)
Self-efficacy
Optimism
PsyCap Hypothesis 1 (+)
Time 1
Hope
Resilience
Hypothesis 3 (+)
Fig. 1. Research model and hypotheses of work engagement as a partial mediator of the relationship between PsyCap and employee morale.
The virtuous circle of employee performance, perceived qual-
ity, prot, and management support is well characterized in the
service management literature (Grnroos, 2000). Based on this
chain of cause and effect, recent research in the hospitality context
places the employee and his/her settings, motivations, engage-
ment, and satisfaction with the work environment and conditions
at the center stage, not only conceptually but empirically (Sltten
and Mehmetoglu, 2011). In the hospitality industry in particular,
employees mental outlook, mood, and behavior are very important
as they exert a critical inuence on performance, outcomes, and
customer satisfaction. Such engagement affects the service climate
and employees achievements as well as customer loyalty (Salanova
et al., 2005). Among the several attitudinal and behavioral factors
relevant to this, the concept of work engagement is particularly
prominent, given its strong relationship with work performance
and competitive advantage (Baumruk, 2004).
Bakker and Demeroutis (2007, 2008) job demands-resources
(JD-R) model proposes that job resources such as personal psycho-
logical resources lead to improved employee engagement and in
turn positively affect job-related outcomes. Since then, in the man-
agement literature, meaningful initial academic attention has been
paid to the investigation of the relationships between personal psy-
chological factors, work engagement, and job-related outcomes.
In the hospitality domain, despite the theoretical and manage-
rial signicance of the link of personal psychological factors, work
engagement, and job-related outcomes, as employees competitive
advantage is pivotal in the success of hospitality rms, there is little
empirical evidence of the holistic relationships among these vari-
ables. Only a few recent studies in the hospitality literature have
examined a part of these relationships (e.g., Karatepe and Olugbade,
2009; Karatepe et al., 2006) or dealt with limited sub-constructs of
personal psychological factors, work engagement, and job-related
outcomes (e.g., Karatepe, 2014). These studies tested hope, trait
competitiveness, and/or self-efcacy. Therefore, the originality and
signicance of the present study lies in its holistic examination of
personality-related constructs, work engagement, and job-related
outcomes. It does this by aligning work engagement with PsyCap
as an antecedent and measuring as outcomes the effect on job sat-
isfaction and affective organizational commitment, as components
of employee morale.
Furthermore, as will be discussed below, the role of work
engagement as a determinant of job-related outcomes has still
not been fully researched or understood (Christian et al., 2011;
Karatepe et al., 2013). In the hospitality context, empirical evidence
of its antecedents and consequences is also lacking (Karatepe, 2011;
Sltten and Mehmetoglu, 2011). In addition, among personality-
related constructs, PsyCap has been considered separately from
Job Satisfaction
Time 2
Partial Mediator
Hypotheses 6 and 7
Hypothesis 4 (+)
Work Engagement
Time 1
Hypothesis 5 (+)
Affective Organizational
Commitment
Time 2
work engagement in most past empirical studies. While both are
considered highly relevant to, and important in, achieving posi-
tive work outcomes, such separation leads to the idea that they
are limited. Therefore, we propose that there is a full and signi-
cant link between PsyCap, work engagement, and outcomes such
as employee morale.
In extending the research base, this study therefore attempts to
close these gaps by investigating the partial mediating role of work
engagement in the relationship between PsyCap and employee
morale as represented by job satisfaction and affective organiza-
tional commitment in a hospitality environment, based on data
collected from front-line employees in top-tier hotels. It draws on
the conservation of resources (COR) theory (Hobfoll, 1989, 2001)
and the JD-R model of work engagement (Bakker and Demerouti,
2007, 2008) to examine the following research questions:
Research question 1: Does PsyCap directly and positively pre-
dict work engagement and employee morale?
Research question 2: Does work engagement, in turn, directly
and positively predict employee morale?
Research question 3: Does work engagement partially mediate
the effect of PsyCap on employee morale?
2. Theoretical foundation, research model, and hypotheses
Fig. 1 presents the research model setting out the hypothesized
relationships. It is proposed that employees PsyCap is positively
related to their work engagement (Hypothesis 1). Furthermore,
work engagement acts as a central switch and predictor of
employee morale (i.e., job satisfaction and affective organizational
commitment; Hypotheses 4 and 5), such that there will be a positive
relationship between PsyCap and employee morale as mediated by
work engagement (Hypotheses 6 and 7). However, the model also
proposes that work engagement is only a partial mediator, because
there is a direct relationship between PsyCap and the two com-
ponents of employee morale (Hypotheses 2 and 3). At a glance,
this proposed model is clearly innovative in terms of its analysis of
employee morale-related job outcomes based on PsyCap, partially
mediated through work engagement as a core concept of the JD-R
model.
2.1. The COR theory and the JD-R model as underlying
frameworks
In order to outline the proposed approach, we explain the role of
PsyCap as an antecedent of work engagement using the COR theory
 S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926 11

Innovative
Stress performance
symptoms, job
search behavior, (Abbas and Raja, Employee well-
and intentions 2011) being (Avey et
to quit
al., 2010)
(Avey et al.,
2009)
Job performance Job satisfaction
and quality of
and performance
work life
(Nguyen and (Luthans et al.,
Nguyen, 2012) 2007a)

Organizational
Innovative
trust
behavior (Jafri,
(Walumbwa et
2012)
al., 2011)

Trust in Commitment to
management organizational
and performance mission (Luthans
(Clapp-Smith et and Jensen,
al., 2009) 2005)
PsyCap

Job satisfaction
Burnout and and
emotional labor organizational
commitment
(Cheung et al., (Larson and
2011) Luthans, 2006)

Supportive
organizational
Perceived trust
climate for
(Norman et al.,
employees
(Luthans et al., 2010)
2008b)

Performance and Workplace

organizational
performance
citizenship
behaviors (Gooty Turnover and (Luthans et al.,
et al., 2009). absence Creativity 2008)

intentions (Rego et al.,

(Karatepe and 2012)
Karadas, 2014)

Fig. 2. PsyCap sun: previous empirical research related to PsyCap.

and the JD-R model as theoretical frameworks. The central tenet of
the COR theory is that individuals strive to obtain, maintain, and
preserve certain resources which they value (Hobfoll, 1989, 2001).
Such resources can be dened as those objects, personal character-
istics, conditions, or energies that are valued by the individuals or
that serve as a means for attainment of these objects, personal char-
acteristics, conditions, or energies (Hobfoll, 1989, p. 516). Just as
with material goods, individuals also seek to acquire, maintain, pre-
serve, and accumulate immaterial or intangible resources (Bakker
and Leiter, 2010; Salanova et al., 2005). Hobfoll (2001) explains that
the gain and loss of these resources is not symmetric, as a loss is
disproportionately more salient than resource gain (p. 343). These
resources can be depleted and they must be invested in to pro-
tect against or recover from a loss or to make a gain. Individuals
with more resources have less fear of loss and are more capable of
managing gain (Hobfoll, 2001).
Hobfoll (2001) also proposes that resources tend to generate
each other since one may possess one major type of resource that
is linked with, or can replace, others. For example, when a role is
demanding, job resources like social support are linked to, or may
even replace, personal resources such as self-efcacy or optimism.
Hobfoll calls this linkage and interplay resource caravans (2001,
p. 349). Acquiring increasing amounts thus creates such resource
caravans, leading to positive outcomes (Hobfoll, 2001). This notion
is connected to the JD-R model proposed by Bakker and Demerouti
(2007, 2008). This divides job characteristics into two general cate-
gories: job-related demands and resources (Bakker and Demerouti,
2007, 2008; Bakker and Leiter, 2010). Job-related demands are
the physical, psychological, social, or organizational aspects of a
job, which require sustained physical, cognitive, and emotional
effort or skills. They include work pressure and emotional, men-
tal, or physical demands. Job-related resources can be separated
into the physical, psychological, social, or organizational aspects of
job autonomy, performance feedback, or social support; and per-
sonal resources, which are a psychological state of development
related to optimism, hope, or resilience (Bakker and Demerouti,
2007, 2008). These personal resources are known as PsyCap.
The JD-R model suggests that job resources play a salient role
in initiating a motivational process that leads to employee work
engagement and in turn enhances job performance (Bakker and
Demerouti, 2007, 2008). Job resources can function as intrinsic
motivators and extrinsic motivators. Job resources as intrinsic
motivators, such as colleague or supervisor support, satisfy basic
human needs and foster employees growth and development. Job
resources as extrinsic motivators promote employees well-being
in order to boost their efforts to fulll their job requirements.
The model emphasizes the creation of resource caravans when
individuals with abundant job resources tend to have a more
positive psychology. Such individuals feel higher level of concor-
dance between their goals and themselves. Consequently, these
employees are intrinsically and/or extrinsically motivated to con-
centrate on their goals and drive themselves to engage with
12 S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926
their work to a higher level (Xanthopoulou et al., 2009). In turn,
higher work engagement generates positive organizational out-
comes. The motivational process of the JD-R model indicates the
role of work engagement as a mediator in the relationship between
job resources and organizational outcomes such as organizational
commitment (Llorens et al., 2007).
2.2. Relationship between PsyCap and work engagement
Sweetman and Luthans (2010) suggest that with the increase
in popularity of evidence-based management, understanding the
process of employee engagement has become critical for mod-
ern organizations. A number of researchers, primarily Luthans
and Youssef (2007), developed the construct of PsyCap as an out-
growth of positive organizational behavior and have shown that
the psychological capacities of human resources can be mea-
sured, developed, and efciently managed. This approach has its
roots in the theory of positive psychology proposed by Peterson
and Seligman (2004). PsyCap has been conceptually identied
by Luthans and colleagues (Luthans and Jensen, 2005; Luthans
et al., 2007a,b) as consisting of the four positive psychological
resources of self-efcacy, optimism, hope, and resilience. Luthans
et al. (2007b) proposed that the second-order factor of PsyCap may
represent the common source of variance (i.e., common mechanis-
tic processes) connecting the four constructs (i.e., hope, optimism,
resilience, and self-efcacy). The comprehensive denition of Psy-
Cap is an individuals positive psychological state of development
characterized by: (1) having condence (self-efcacy) to take on
and put in the necessary effort to succeed at challenging tasks; (2)
making a positive attribution (optimism) about succeeding now
and in the future; (3) persevering toward goals and, when neces-
sary, redirecting paths to goals (hope) in order to succeed; and (4)
when beset by problems and adversity, sustaining and bouncing
back and even beyond (resilience) to attain success (Luthans et al.,
2007b, p. 3).
Luthans et al. (2005, 2007b) have proved that PsyCap predicts
related outcomes more accurately than its stand-alone compo-
nents. This has been conrmed by several studies which have tested
various component-outcome combinations (Luthans et al., 2005,
2007a; Stajkovic and Luthans 1998). Since its introduction and con-
ceptual formulation, empirical studies have analyzed the role of
PsyCap as an important predictor or mediator of various work-
related outcomes. As summarized in Fig. 2, PsyCap is related to
behavioral and psychological factors as well as to entrepreneurial,
managerial, and economic outcomes. In all of these studies, PsyCap
has been shown either to have a signicant positive relationship to
outcomes or to reduce negative effects. In addition, our analysis of
the related literature shows that none of these empirical studies of
antecedents and outcomes has considered work engagement.
Work engagement was rst conceptualized by Kahn (1990) and
then operationalized by Maslach and Leiter (1997). Schaufeli et al.
(2002) and Schaufeli and Bakker (2004) then adjusted the concept,
which is now characterized as a positive, fullling, work-related
state of mind (Schaufeli and Bakker, 2004, p. 295). The engaged
person is enthusiastic, inspired, proud, and challenged at work, and
is willing to make an effort while maintaining concentration and
being deeply engrossed in the task. He or she is also persistent in
the face of difculties and distractions, such as time at work passing
quickly, and it can be difcult for him or her to detach him or herself
from a task (Schaufeli et al., 2002, pp. 7475). According to Kahn
(1990), work engagement shapes the process of how staff choose
to be present and absent during task performance.
Sweetman and Luthans (2010) present a conceptual model
which relates PsyCap to work engagement through positive emo-
tions, which are part of the JD-R model (Bakker and Demerouti,
2007; Schaufeli and Bakker, 2004). They argue that PsyCap could
have a direct and state-like relationship to work engagement, and
should not be considered as a uctuation or a eeting shift such
as a mood or emotion (e.g., anger or joy). Recent research in the
hospitality industry suggests that work engagement may have dif-
ferent antecedents (Table 1): for instance, Sltten and Mehmetoglu
(2011) use role benet, job autonomy, and strategic attention,
while Li et al. (2012) look at the exchange between managers and
staff and the consistency of human resource management. In addi-
tion, Karatepe links work engagement to high-performance work
practices (Karatepe, 2013a) or perceptions of organizational poli-
tics (Karatepe, 2013b). Motivated by this body of research on the
antecedents of work engagement in the hospitality industry, and
with the theoretical basis of the JD-R model, we propose that Psy-
Cap is an important driver of, and directly inuences, work-related
outcomes. Based on the view of PsyCap as a personal resource,
as identied by COR theory (Hobfoll, 1989, 2001; Karatepe and
Olugbade, 2009), we propose our rst hypothesis as follows:
Hypothesis 1. PsyCap has a positive inuence on work engage-
ment.
2.3. Direct effect of PsyCap on employee morale
As the impact of ethics has become critical in modern busi-
ness settings, researchers have undertaken a serious examination
of workers ethics and morale as outcome variables. Under this
umbrella, along with individual morale frameworks, individuals
attitudes and behaviors in terms of issues such as satisfaction and
commitment have been a central topic (Ambrose et al., 2008). Based
on this strand of research, by taking major constructs which cap-
ture employee morale and are researched in the area of employee
morale (i.e., job satisfaction and affective organizational commit-
ment) as outcome variables, we attempt here to investigate the
relationship between PsyCap and these two constructs, job satis-
faction and affective organizational commitment. Job satisfaction
is dened here as the positive emotional state resulting from the
appraisal of ones job or job experiences (Locke, 1976, p. 1300).
Affective organizational commitment is dened as an affective or
emotional attachment to the organization such that the strongly
committed individual identies with, is involved in, and enjoys
membership in, the organization (Allen and Meyer, 1990, p. 2).
Sweetman and Luthans (2010) identify PsyCap as a resource
which generates increasing awareness of, and sensitivity to,
employees own resources as well as organizational dimensions
and job-related outcomes. Several studies show that PsyCap has
a positive effect on employees work attitudes, including job sat-
isfaction (e.g., Larson and Luthans 2006; Luthans et al., 2007a)
and organizational commitment (e.g., Larson and Luthans 2006),
as well as organization-related dimensions like perceived trust
(e.g., Norman et al., 2010), organizational citizenship behavior (e.g.,
Gooty et al., 2009), and employee perceptions of the organiza-
tional climate as supportive (e.g., Luthans et al., 2008). At a glance,
therefore, the empirical evidence shows that PsyCap affects indi-
vidual satisfaction with work as well as ones commitment to it.
Yet, in a hospitality context, the relationship between PsyCap and
employee morale has to be researched specically. However, based
on the discussion presented above of the positive effect of PsyCap
on employee attitudes and behaviors in a mainstream management
context, we propose that:
Hypothesis 2. PsyCap has a positive inuence on job satisfaction.
Hypothesis 3. PsyCap has a positive inuence on affective orga-
nizational commitment.

Table 1
Previous empirical studies of the relationship structure of work engagement in the hospitality industry.
Author (year)
Salanova et al. (2005)
Pienaar and Willemse
(2008)
Burke et al. (2009)
Kim et al. (2009)
Karatepe (2011)
Sltten and Norway
Mehmetoglu (2011)
Karatepe and Ngeche
(2012)
Li et al. (2012)
Park and Gursoy (2012)
Karatepe et al. (2013)
Karatepe (2013a)
Karatepe (2013b)
Yeh (2013)
Chen et al. (2014)
S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926
Regional Sample
context
Spain Customer contact
employees from hotels
and restaurants
(n = 342)
South Waiters, waitresses,
Africa and bartenders from
restaurants and coffee
shops (n = 150)
China Hotel managers
(n = 309)
USA Managerial/supervisory
and nonsupervisory
employees from
quick-service
restaurants (n = 187)
Nigeria Front-line hotel
employees and
supervisors (n = 143)
Front-line hospitality A: Role benet, job autonomy, and
employees (n = 279)
Cameroon Front-line employees
from four- and ve-star M: Job embeddedness
hotels (n = 212)
China 298 employees and 54
supervisors from a
luxury hotel (n = 352)
USA and Customer contact
Canada employees from mid-
and upscale hotels
(n = 677)
Cyprus Front-line employees
from ve-star hotels M: Work engagement
(n = 185)
Romania Front-line hotel
employees and their
managers (n = 110)
Iran Front-line employees
and supervisors from
four- and ve-star M: Work engagement
hotels (n = 231)
Taiwan Front-line hotel
employees (n = 336)
Taiwan Front-line hotel
employees (n = 246)
13
Relationship structure of work Main results
engagement
A: Organizational resources and work Service climate fully mediates the effects of
engagement organizational resources and work
M: Service climate engagement on employee performance and
C: Employee performance and customer loyalty.
customer loyalty
A: Burnout, engagement, and coping General health of service staff can be predicted
C: General health by their feelings of personal accomplishment
and work engagement (dedication), having
avoidant coping strategies, and by favoring the
addressing of symptoms in coping.
A: Work engagement Work engagement (dedication) predicts work
C: Work and psychological well-being (such as job satisfaction and intention to quit)
outcomes and psychological well-being outcomes.
A: Big Five personality factors The most prominent traits predicting work
C: Work engagement and burnout engagement are conscientiousness and
neuroticism, and the most critical personality
trait affecting burnout is neuroticism.
A: Procedural justice Work engagement fully mediates the effects of
M: Work engagement procedural justice on affective organizational
C: Affective organizational commitment, job performance, and extra-role
commitment, job performance, and customer service.
extra-role customer service
Work engagement is closely and positively
strategic attention linked to employees innovative behavior. Role
M: Work engagement benet, job autonomy, and strategic attention
C: Innovative behavior are positively related to work engagement.
A: Work engagement Job embeddedness partially mediates the
impact of work engagement on turnover
C: Organizationally valued job intention and job performance.
outcomes (turnover intention and job
performance)
A: Leader-member exchange and Leader-member exchange is positively related
human resource management to employee job performance. Moreover, work
consistency engagement partially mediates this
M: Work engagement relationship. Human resource management
C: Employee job performance consistency strengthens the inuence of
leader-member exchange on work
engagement.
A: Work engagement Levels of work engagement differ depending
M: Generational differences (work on the generational membership of employees.
values and attitudes) The effect of work engagement on turnover
C: Turnover intention intention is moderated by generational
differences. Millennials are a more distinct
cohort from Gen X-ers and Baby Boomers in
terms of their level of work engagement as
well as the relationship between work
engagement and turnover intention.
A: Polychronicity The effect of polychronicity on job
performance and extra-role customer service
C: Job performance and extra-role is fully mediated by work engagement.
customer service
A: High-performance work practices Work engagement acts as a full mediator
(appraisal of training, empowerment, between high-performance work practices and
and rewards) both job performance and extra-role customer
M: Work engagement service.
C: Job performance and extra-role
customer service
A: Perceptions of organizational Work engagement acts as a full mediator of the
politics impact of perceptions of organizational politics
on affective organizational commitment,
C: Affective organizational extra-role performance, and turnover
commitment, extra-role performance, intention.
and turnover intention
A: Tourism involvement Tourism involvement is positively related to
M: Work engagement work engagement. Tourism involvement and
C: Job satisfaction work engagement are also positively related to
job satisfaction. Work engagement partially
mediates the relationship between tourism
involvement and job satisfaction.
A: Individual crafting and collaborative Both individual crafting and collaborative
crafting crafting are related to job engagement.
M: Person-job t Person-job t mediates the relationships.
C: Job engagement
14 S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926
Table 1 (Continued)
Author (year) Regional Sample
context
Karatepe et al. (2014) Cyprus Front-line hotel
employees (n = 195)
Karatepe and Demir Turkey Front-line hotel
(2014) employees (n = 211)
Note: A = antecedents; M = mediator; and C = consequences.
2.4. Relationship between work engagement and employee
morale
With a number of recent studies highlighting the importance
of work engagement in organizational performance (Leiter and
Bakker, 2010), the body of work on this topic (particularly with
an international focus) is growing. Recent research has been cross-
disciplinary in nature, encompassing the medical sector, hospitality
and tourism, nancial services, transportation, and retail (Leiter
and Bakker, 2010). The work carried out in a hospitality context,
in particular, highlights several important aspects of employee
morale. The evidence indicates that there is a relationship between
staff well-being and service outcomes (Karatepe and Ngeche, 2012;
Kim et al., 2009). In addition, hospitality staff are exposed to sub-
stantial stress and constant customer demands, which may affect
the quality of service delivery (Pienaar and Willemse, 2008). Low
employee morale leads to higher operational costs and poorer
service performance through lack of adherence to routine and uc-
tuations (Salanova et al., 2005). Finally, a positive staff attitude
is critical in facilitating or impeding the implementation of new
service initiatives (Karatepe, 2011, 2013a).
In empirical terms, a review of the literature on work engage-
ment in the hospitality setting shows that it has a positive
relationship to several outcomes, such as positive personal con-
dition (i.e., general health), and work attitudes, such as job
satisfaction (e.g., Burke et al., 2009; Pienaar and Willemse, 2008;
Yeh, 2013), as well as organizational achievements such as orga-
nizational commitment, job performance, innovative behavior,
and extra-role customer service (e.g., Karatepe and Ngeche, 2012;
Karatepe, 2013a,b; Karatepe et al., 2013; Li et al., 2012; Sltten
and Mehmetoglu, 2011). It also has a negative relationship to
turnover intention (Karatepe and Ngeche, 2012; Karatepe, 2013b;
Park and Gursoy, 2012). Therefore, given this body of evidence and
building on the previous discussion, we propose that work engage-
ment enhances hotel employees morale, leading to the following
hypotheses:
Hypothesis 4. Work engagement has a positive inuence on job
satisfaction.
Hypothesis 5. Work engagement has a positive inuence on affec-
tive organizational commitment.
2.5. Partial mediating role of work engagement
We argued above, based on the JD-R model (Bakker and
Demerouti, 2007, 2008; Bakker and Leiter, 2010), that PsyCap, as
an aspect of job-related personal resources, will positively affect
work engagement. Following the JD-R model, Bakker and Leiter
(2010) propose that work engagement has a mediating role on per-
formance factors such as in- or extra-role performance, creativity,
innovation, and nancial success. Based on the earlier discussion,
we assume that PsyCap will directly predict job satisfaction as well
Relationship structure of work Main results
engagement
A: Challenge stressors (work overload Work engagement fully mediates the effects of
and job responsibility) challenge stressors on affective organizational
M: Work engagement commitment and job performance.
C: Affective organizational
commitment and job performance
A: Core self-evaluations Work engagement fully mediates the effects of
M: Work engagement core self-evaluation on work-family
C: Work-family facilitation and facilitation and family-work facilitation.
family-work facilitation
as affective organizational commitment and work engagement. In
addition, given that PsyCap may predict work engagement, which
in turn may predict job satisfaction and affective organizational
commitment, it is logical to assume that work engagement will act
as a partial mediator of the relationship between PsyCap and each of
these outcomes. This is consistent with several studies in the elds
of management, hospitality, and tourism, in which work engage-
ment has been shown to partially mediate the relationship between
antecedent and consequent variables (Salanova et al., 2005; Yeh,
2013), although work engagement has been suggested as a full
mediator in most studies (Karatepe, 2013a,b, 2014; Karatepe et al.,
2013, 2014; Karatepe and Demir, 2014; Leung et al., 2011; Li et al.,
2012) or as a mediator in a reciprocal relationship with several
variables (Schaufeli and Bakker, 2004; Xanthopoulou et al., 2009).
Yeh (2013) examined work engagement as a partial mediator in
the relationship between tourism involvement and job satisfac-
tion using the data collected from front-line employees in the hotel
industry in Taiwan. Salanova and colleagues (2005) linked organi-
zational resources and service climate with work engagement as a
partial mediator using the data from contact employees in the hotel
and restaurant industries in Spain. On the basis of this discussion,
we propose the following:
Hypothesis 6. Work engagement partially mediates the effect of
PsyCap on job satisfaction.
Hypothesis 7. Work engagement partially mediates the effect of
PsyCap on affective organizational commitment.
3. Methodology
3.1. Common method bias
Common method bias (CMB) refers to the amount of spurious
covariance shared among variables due to the common method
used in data collection (Buckley et al., 1990). CMB arises from hav-
ing a common rater, a common measurement context, a common
item context, or from the characteristics of the items themselves
(Podsakoff et al., 2003). Therefore, because the data of this study
were collected via self-report (i.e., common rater) questionnaires,
we need to address certain concerns regarding CMB. If CMB is not
controlled in empirical studies, like this one, it is a potential threat
to the magnitudes of the hypothesized relationships among the
study variables. To minimize and check the potential inuence of
CMB, we thus used the following four different procedural meth-
ods in designing the questionnaires and two statistical remedies
in data analysis suggested by Podsakoff and colleagues (Podsakoff
and Organ 1986; Podsakoff et al., 2003).
First, we assured our study participants of the anonymity and
condentiality of their responses in order to reduce evaluation
apprehension and social desirability, which refers to the ten-
dency for participants to present a favorable image of themselves
(Johnson and Fendrich, 2005). Participants may believe the infor-
 S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926
mation they report, or may fake good to conform to socially
acceptable values, avoid criticism, or gain social approval (King
and Bruner, 2000). Therefore, to reduce evaluation apprehension
and social desirability, we instructed respondents to complete the
questionnaire individually and then return it to their managers in
a sealed envelope.
Second, we collected data from front-line hotel employees with
a time lag of one month (i.e., there were two waves of data col-
lection; Time 1: PsyCap, work engagement, and the demographic
prole of respondents; Time 2: job satisfaction and affective orga-
nizational commitment) consistent with several empirical studies
(e.g., Culbertson et al., 2010; Karatepe, 2011; Kim and Lee, 2013;
Leung et al., 2011) in order to control the risk of CMB.
Third, we constructed a psychological separation in the sur-
vey by separating PsyCap items from those of work engagement
(Time 1) and job satisfaction items from those of affective organi-
zational commitment (Time 2) to lower respondents perception of
any direct connection among the study variables. We also inserted
questions about the demographic prole of respondents between
PsyCap and work engagement measure sections (Time 1). These
ve sections of variable items and the questions about demo-
graphic prole of respondents, appearing on different pages of the
questionnaire, may yield a psychological separation effect on the
respondents (Podsakoff et al., 2003).
Lastly, after collecting the data, Harmans 1-factor (often
referred to as single-factor) test via an exploratory factor analysis
(EFA) and a conrmatory factor analysis (CFA) as a post hoc cor-
rective test were used to check the possibility of CMB through the
approach excellently outlined by Podsakoff and Organ (1986) and
Podsakoff et al. (2003). This approach is one of the most widely
used for checking CMB in the hospitality literature (e.g., Kim and
Lee, 2013; Mattila and Enz, 2002; Yang and Lau, 2015) as well as
other literatures (e.g., Aulakh and Gencturk, 2000; Culbertson et al.,
2010; Mossholder et al., 1998).
3.2. Measures
3.2.1. Time 1 survey
PsyCap and work engagement were assessed at Time 1. PsyCap
was measured using the 24-item instrument developed by Luthans
et al. (2007a). This measures PsyCap as a second-order factor com-
prised of the four rst-order factors: self-efcacy, optimism, hope,
and resilience. This instrument has been validated across multi-
ple samples and consistently demonstrates a strong psychometric
t to the data when modeled as a second-order factor in which
each item is tted to its latent construct and each of the four latent
constructs is tted to an overall PsyCap construct (e.g., Avey et al.,
2009; Luthans et al., 2007b). The instrument comprises six items for
measuring each of the four factors, with responses collected using
a 7-point Likert-type scale ranging from 1 (strongly disagree) to
7 (strongly agree). Sample items include I feel condent analyz-
ing a long-term problem to nd a solution (self-efcacy); When
things are uncertain for me at work I usually expect the best (opti-
mism); If I nd myself in a jam at work, I can think of many ways
to get out of it (hope); and When I have a setback at work, I have
trouble recovering from it and moving on (resilience).
The short form of the Utrecht Work Engagement Scale (UWES-
9) developed and validated by Schaufeli et al. (2006) was used to
assess work engagement. The UWES-9 consists of nine items rated
on a 7-point frequency rating scale ranging from 0 (never) to 6
(always). The UWES-9 that tapping vigor, dedication, and absorp-
tion has sound psychometric properties and an examination of the
current literature in hospitality as well as other sectors also pro-
vides support for the empirical use of the UWES-9 (e.g., Karatepe,
2011, 2014a,b; Karatepe and Demir, 2014; Sulea et al., 2012). Sam-
ple items include At my work, I feel like I am bursting with energy;
15
I am enthusiastic about my job; and I feel happy when I am
working intensely.
3.2.2. Time 2 survey
Job satisfaction and affective organizational commitment as
employee morale were measured at Time 2. Job satisfaction was
operationalized using eight items from Hartline and Ferrell, 1996,
with responses collected using a 7-point Likert-type scale ranging
from 1 (extremely dissatised) to 7 (extremely satised). A sample
item is The opportunities for advancement with this hotel.
Affective organizational commitment was operationalized
using Allen and Meyers (1990) 8-item scale, with responses col-
lected using a 7-point Likert-type scale ranging from 1 (strongly
disagree) to 7 (strongly agree). A sample item is I would be very
happy to spend the rest of my career with this organization.
3.3. Data collection and screening
Following the suggestions of Podsakoff and colleagues
(Podsakoff and Organ, 1986; Podsakoff et al., 2003), the data
in this study were collected from front-line hotel employees
through a two-wave data collection procedure in order to reduce
the risk of CMB. In the rst-wave survey (Time 1: February 2013),
employees self-reported their PsyCap and work engagement and
also provided general prole information such as gender, age,
education level, department, and job position. In the second-wave
survey (Time 2: March 2013), employees who had completed the
rst-wave questionnaires were surveyed again and asked to rate
their job satisfaction and affective organizational commitment.
On completion of a survey questionnaire, which took about ve
minutes at Time 1 and two at Time 2, the respondent received a
small gift.
Data were collected from a sample of front-line employees of
15 ve-star hotels in Seoul, South Korea. According to informa-
tion received from the Korean Hotel Association at the time the
eldwork was carried out, there were 44 such hotels in Seoul. The
researchers contacted the human resource managers of all 44 and
15 hotels allowed the team access to survey their employees. Partic-
ipation was voluntary and employees were given assurance of their
anonymity and the condentiality of their answers. Data were col-
lected via the following procedures. The human resource managers
distributed questionnaires to potential respondents in each depart-
ment of their hotel. Each survey packet included a cover letter
explaining the purpose of the study. The human resource man-
agers undertook to ensure the condentiality of the data collected.
Respondents put their completed surveys into sealed envelopes
and gave them to the department managers. The questionnaires
were then returned to the researchers. Respondents who had par-
ticipated in Time 1 were subsequently asked to take part in the Time
2 survey. Paying the utmost attention to the issue of condential-
ity, a master list containing the name of each employee and his/her
department in the hotel was prepared and controlled by corre-
sponding managers only. An identication number was assigned to
each employee in this list and was written on each questionnaire
instead of the employees name. The same procedure was used in
the second round of data collection, and the questionnaires at Time
1 and Time 2 were matched using the identication numbers.
At Time 1, 400 questionnaires were distributed in the participat-
ing hotels, of which 361 were returned, giving a response rate of
90.3%. Fifteen incomplete questionnaires were discarded, leaving
346 for use in the analysis, resulting in an effective response rate
of 86.5%. At this stage, we prepared the list of the 346 respondents
as described above, and coded the survey questionnaires for Time
2 before distribution. When the Time 2 survey was conducted, the
questionnaires were distributed to these 346 employees, and 340
were completed and returned.
16 S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926

Table 2 criteria of standard factor loading, composite reliability, and aver-

Prole of the respondents (n = 312).
age variance extracted (AVE) value were applied (Anderson and
Characteristics Frequency (n) Percentage (%) Gerbing, 1988; Fornell and Larcker, 1981; Hair et al., 2010). Dis-
Gender criminant validity is another important aspect of construct validity
Male 132 42.3 that examines the constructs of a model to see if they are distinct
Female 180 57.7 from one another (Campbell and Fiske, 1959; Churchill, 1979). This
Age (years) study applied the four criteria of pairwise correlation, correlation
Under 30 172 55.1 condence interval, 2 difference, and AVE test to assess discrim-
30-39 114 36.5 inant validity (Anderson and Gerbing, 1988; Fornell and Larcker,
40 or older 26 8.3
1981; Hair et al., 2010; Kline, 2010). The nal common criterion for
Education level construct validity is nomological validity, which refers to the extent
High school 14 4.5 to which the scale correlates in theoretically predicted ways with
Two-year college 175 56.1
measures of different but related constructs (Bagozzi, 1980). In this
University 101 32.4
Graduate school 22 7.1 study, the correlations among variables were estimated to establish
the nomological validity (Hair et al., 2010; Netemeyer et al., 1991).
Department
Room 139 44.6
CMB is a potentially serious threat, especially in a single-informant
Food and beverage 160 51.3 survey like this (Podsakoff et al., 2003). Therefore, during the full
Others 13 4.2 measurement model analysis, we statistically tested the data to
Job position check the potential inuence of CMB using Harmans 1-factor test
Rank and le level 134 63.2 via EFA and CFA (Podsakoff and Organ, 1986; Podsakoff et al., 2003).
Supervisor level 53 25 In the second step, the hypothesized relationships in the struc-
Assistant manager level 15 7.1 tural model were tested using SEM. We used the four facets
Manager level or above 10 4.7
(i.e., four rst-order factors: self-efcacy, optimism, hope, and
resilience) as indicators of the second-order latent construct
labeled PsyCap (e.g., Culbertson et al., 2010; Karatepe and Karadas,
The dataset was examined for missing data and outliers before 2014). In this study, domain-representative parceling (Bandalos
conducting the data analysis. It is important to identify outliers and Finney, 2001; Hall et al., 1999; Williams and OBoyle, 2008) was
because the outliers may bias the mean and inuence the normal used to create four parcels by computing the average item scores
distribution (Field and Hole, 2003). Among the 340 respondents, of self-efcacy, optimism, hope, and resilience as indicators of the
after the deletion of missing data and outliers via the Mahalanobis PsyCap construct. The use of item parceling (i.e., summated items
distance, which is a statistical measure of the extent to which cases produced by averaging item scores) helps considerably reduce the
are multivariate outliers (Byrne, 2001), 28 questionnaires were dis- number of free parameters, which makes the estimation reliable
carded, leaving 312 usable surveys for the Time 2 data analysis. without increasing the sample size (Bagozzi and Edwards, 1998).
Hence, the nal sample of this study consists of 312 front-line hotel To investigate the mediating role of work engagement, both the
employees. The effective response rate for the overall sample was Preacher and Hayes (2004) bias-corrected bootstrapping method
78%. Table 2 shows the demographic prole of the respondents. and the Aroian version of the Sobel test (Z-test)1 suggested by
Baron and Kenny (1986) were used. The bootstrapping method is
3.4. Data analytic strategy a more appropriate and more powerful test for the signicance of
a mediating or indirect effect than Baron and Kennys (1986) tradi-
Data collected from the sample were analyzed using SPSS 21.0 tional causal steps and product-of-coefcients such as the Sobel
and AMOS 18.0 software. SPSS was used to generate the descrip- test (Sobel, 1982) because it uses a resampling procedure (i.e.,
tive and inferential statistics. AMOS was used to conduct two-stage the bootstrapping method is a nonparametric approach based on
structural equation modeling (SEM) to test the hypothesized rela- resampling with replacement) to create a condence interval (CI)
tionships (Anderson and Gerbing, 1988). The measurement model for a mediating or indirect effect (MacKinnon et al., 2002; Preacher
was rst estimated via a conrmatory factory analysis (CFA), and and Hayes, 2004). This approach is therefore a more popular sta-
a structural model was then analyzed for model evaluation and tistical method for estimating the extent of a mediating or indirect
research hypotheses testing. The SEM technique is considered more effect than the above-mentioned traditional methods (Bollen and
rigorous than typical stepwise regression techniques as all medi- Stine, 1990; Shrout and Bolger, 2002). The combined approach of
ation paths are measured simultaneously rather than step by step applying the bootstrapping method and the Aroian version of the
(Clapp-Smith et al., 2009; Hair et al., 2010). Sobel test to mediation analysis is more appropriate than the tra-
In the rst step, we rst used a single CFA model to ditional single method (MacKinnon et al., 2002).
assess the higher-order (i.e., second-order) factor structure (with In the measurement (both the second-order factor structure of
the four rst-order factors of self-efcacy, optimism, hope, PsyCap and the full measurement models) and structural model
and resilience) of the PsyCap construct. Then, three rst-order estimation stages, the current study used t indices of the overall 2
factorswork engagement, job satisfaction, and affective organiza- measure, normed 2 , goodness of t index (GFI), root mean square
tional commitmentwere incorporated into the rst CFA model to
form a full measurement model (Cha et al., 2013; Hair et al., 2010).
In the full measurement model validation stage, the remaining 1
To investigate the mediating effect of work engagement in the relationship
measurement items after the second-order factor structure vali- between PsyCap and employee morale (job satisfaction and affective organizational
dation of the PsyCap construct were subjected to CFA to assess the commitment), the Aroianversion of the Sobel test (Baron and Kenny, 1986) was
measurement models in terms of reliability and construct valid- used: Z value = a b/ b2 SE2a + a2 SE2h + SE2a SE2h , where a is the unstan-
ity including convergent, discriminant, and nomological validity dardized path coefcient for the relationship between independent (i.e., PsyCap) and
(Anderson and Gerbing, 1988; Bagozzi and Yi, 1988; Fornell and mediator variables (i.e., work engagement); b is the unstandardized path coefcient
for the relationship between mediator and dependent variables (i.e., job satisfaction
Larcker, 1981; Hair et al., 2010). Convergent validity is agreement and affective organizational commitment); SEa is the standard error of the relation-
between measures of the same construct assessed by different ship between independent and mediator variables; and SEb is the standard error of
methods (Churchill, 1979). To assess convergent validity, the three the relationship between mediator and dependent variables.
 S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926
error of approximation (RMSEA) with 90% CI (HI and LO), normed
t index (NFI), comparative t index (CFI), incremental t index
(IFI), and Tucker-Lewis index (TLI) to assess model t (Bollen, 1989;
Byrne, 2001; Hair et al., 2010). In addition, the Akaike information
criterion (AIC) was used to assess model parsimony to compare
competing models (Akaike, 1987; Rust et al., 1995) in both PsyCap
factor structure and full measurement models.
4. Results
4.1. Measurement model estimation
4.1.1. Second-order factor structure validation: PsyCap
Prior to estimating the structural model, a CFA was conducted
to estimate the measurement model with the maximum likelihood
estimation method. Two steps were taken in the validation process
of the study variables. First, to conrm the expected second-order
factor structure of the PsyCap construct, we began the CFA by tting
this model with six items for each facet (i.e., self-efcacy, opti-
mism, hope, and resilience) and then t each of the four facets
to the second-order PsyCap (Table 3). A normed 2 lower than
3.0 (Hair et al., 2010), GFI, NFI, CFI, IFI, and TLI values higher
than .90 (Byrne, 2001; Hair et al., 2010), and RMSEA values lower
than .08 (Bollen, 1989) all indicate an acceptable model t. The
results of the preliminary CFA thus indicated that the second-
order factor structure of PsyCap did not t the data well with
2 = 934.949, df = 249; Normed 2 = 3.755, GFI = .814, RMSEA [90%
CI: LO; HI] = .094 [.088; .101], NFI = .842, CFI = .878, IFI = .879, and
TLI = .865. Inspection of the modication indices and correlation
measurement errors resulted in respecication of the second-order
factor structure of PsyCap. A careful examination of the results of
the second-order factor structure of PsyCap therefore suggested
deletion of one item each from the self-efcacy, optimism, hope,
and resilience measures due to correlation measurement errors. As
shown in Table 3, the results of the revised measurement model
of the second-order factor structure of PsyCap consisting of 20
items (out of 24), showed improved and good t with the data
(2 = 415.677, df = 166; Normed 2 = 2.504; GFI = .883; RMSEA [90%
CI: LO; HI] = .070 [.061; .078]; NFI = .908; CFI = .942; IFI = .943; and
TLI = .934), as the values of the t indices were above the model
adaptability standard suggested in the literature (Bollen, 1989;
Byrne, 2001; Hair et al., 2010).
As Table 3 shows, in addition to the hypothesized second-order
factor structure for the overall PsyCap measure, we conducted
competing model analysis to examine more directly the proposi-
tion that PsyCap may be an underlying construct described as a
second-order factor structure. The hypothesized second-order fac-
tor model described above and the competing 3-, 2-, and 1-factor
models were subjected to a signicance test of difference using
2 . Specically, we compared the hypothesized second-order fac-
tor model with each of the four facets (i.e., self-efcacy, optimism,
hope, and resilience) loading to the second-order factor against
11 competing models including multiple 3- and 2-factor models,
which combined various facets as well as a single-factor model in
which all items were loaded to one latent PsyCap factor. As shown
in Table 3, the hypothesized second-order factor model ts the data
better than the 3-, 2-, and 1-factor competing models. For example,
the second-order 4-factor model of PsyCap (2 = 415.677, df = 166;
Normed 2 = 2.504; GFI = .883; RMSEA [90% CI: LO; HI] = .070 [.061;
.078]; NFI = .908; CFI = .942; IFI = .943; TLI = .934; and AIC = 503.677)
showed further signicant improvement in t (2 [1] = 269.744,
p < .001), compared to the 3-factor model (i.e., the best tting of the
competing models; Model 5: three factors as indicators of PsyCap:
optimism and hope merged, self-efcacy, and resilience) of Psy-
Cap (2 = 685.421, df = 167; Normed 2 = 4.104; GFI = .787; RMSEA
17
[90% CI: LO; HI] = .100 [.092; .108]; NFI = .849; CFI = .880; IFI = .881;
TLI = .864; and AIC = 771.421). None of the competing models t
the data well. The results of these model comparisons therefore
strongly supported the proposed second-order factor structure of
PsyCap as supported in previous studies (e.g., Avey et al., 2009;
Luthans et al., 2007b).
4.1.2. Full measurement model validation
After conrming the second-order factor structure of PsyCap,
the full measurement model consisting of seven factors and 45
items (self-efcacy: 5; optimism: 5; hope: 5; resilience: 5; work
engagement: 9; job satisfaction: 8; and affective organizational
commitment: 8) was tested to identify issues of dimensionality,
convergent, discriminant, and nomological validity (Anderson and
Gerbing, 1988; Bagozzi and Yi, 1988; Fornell and Larcker, 1981;
Hair et al., 2010). As can be seen in Table 4, the t results of the
full initial measurement model suggested that the indices t the
data almost as poorly (2 = 2220.987, df = 882; Normed 2 = 2.518;
GFI = .737; RMSEA [90% CI: LO; HI] = .070 [.066; .073]; NFI = .800;
CFI = .868; IFI = .869; and TLI = .859). However, inspection of the
modication indices and correlation measurement errors resulted
in respecication of the full measurement model. Therefore, a care-
ful examination of the results of CFA suggested deletion of one item
from work engagement and three items each from job satisfaction
and affective organizational commitment measures, due to corre-
lation measurement errors. After seven items were deleted from
the full initial measurement model, the full revised measurement
model, which includes seven factors and 38 items (self-efcacy: 5;
optimism; 5 hope: 5; resilience: 5; work engagement: 8; job sat-
isfaction: 5; and affective organizational commitment: 5), showed
improved and acceptable t with the data (2 = 1375.475, df = 644;
Normed 2 = 2.136; GFI = .809; RMSEA [90% CI: LO; HI] = .060 [.056;
.066]; NFI = .849; CFI = .913; IFI = .914; and TLI = .905), as the values
of the t indices (with the exception of GFI and NFI) were within
the model adaptability standard suggested in the literature (Bollen,
1989; Byrne, 2001; Hair et al., 2010).
As shown in Table 4, all the coefcient alphas of the variables
exceeded .70, the threshold typically proposed in the literature
(self-efcacy: .903; optimism: .885; hope: .891; resilience: .909;
work engagement: .909; job satisfaction: .874; and affective orga-
nizational commitment: .875) (Hair et al., 2010; Nunnally, 1978),
which means that all of the items reected the variable well (Kline,
2010). All items were signicantly linked to their corresponding
latent factor (p < .001), with standardized factor loading from .579
to .867, which means that all items effectively measured their
corresponding construct (Anderson and Gerbing, 1988). All the
composite reliability estimates of the variables exceeded the mini-
mum threshold of .70 (self-efcacy: .898; optimism: .864; hope:
.865; resilience: .905; work engagement: .909; job satisfaction:
.866; and affective organizational commitment: .860) (Bagozzi and
Yi, 1988; Fornell and Larcker, 1981), indicating that the items of
each variables were internally consistent and reliable. The AVE val-
ues of self-efcacy, optimism, hope, resilience, work engagement,
job satisfaction; and affective organizational commitment were
.637, .562, .561, .655, .556, .568, and .554, respectively. These values
exceeded the cutoff value of .50 and indicated that at least 55.4%
of the variance observed in the items could be accounted for by
their hypothesized variables (Fornell and Larcker, 1981; Hair et al.,
2010). These ndings indicate that the items measuring all vari-
ables in the full measurement model were one-dimensional and
that within-method convergent validity had been achieved satis-
factorily (Anderson and Gerbing 1988; Bagozzi and Yi, 1988; Fornell
and Larcker 1981; Hair et al., 2010).
As can be seen in Table 5, we performed a CFA of the 6-
, 5-, 4-, 3-, 2-, and 1-factor measurement models to compare
with the hypothesized 7-factor measurement model. Based on
18 S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926

Table 3
Result of CFA model comparisons: PsyCap factor structure model.

Models Factors 2 df Normed 2 df GFI RMSEA NFI CFI IFI TLI AIC Model
2 [90% CI: comparison
LO; HI]

Model 1 4 factors as indicators 415.677 166 2.504 0.883 0.07 0.908 0.942 0.943 0.934 503.677
(Hypothesized) of PsyCap
Self-efcacy [.061;
.078]
Optimism
Hope
Resilience
Model 2 3 factors as indicators 898.436 167 5.38 482.759 1 0.698 0.119 0.801 0.831 0.832 0.808 984.436 1 and 2
of PsyCap
Self-efcacy and [.111;
optimism merged .126]
Hope
Resilience
Model 3 3 factors as indicators 797.091 167 4.773 381.414 1 0.735 0.11 824 0.855 0.855 0.835 883.091 1 and 3
of PsyCap
Self-efcacy and hope [.103;
merged .118]
Optimism
Resilience
Model 4 3 factors as indicators 998.43 167 5.973 582.753 1 0.664 0.127 0.779 0.808 0.809 0.782 1084.43 1 and 4
of PsyCap
Self-efcacy and [.119;
resilience merged .134]
Optimism
Hope
Model 5 3 factors as indicators 685.421 167 4.104 269.744 1 0.787 0.1 0.849 0.88 0.881 0.864 771.421 1 and 5
of PsyCap
Optimism and hope [.092;
merged .108]
Self-efcacy
Resilience
Model 6 3 factors as indicators 686.77 167 4.112 271.093 1 0.779 0.1 0.848 0.88 0.881 0.864 772.77 1 and 6
of PsyCap
Optimism and [.092;
resilience merged .108]
Self-efcacy
Hope
Model 7 3 factors as indicators 825.199 167 4.941 409.522 1 0.724 0.113 0.818 0.848 0.849 0.827 911.199 1 and 7
of PsyCap
Hope and resilience [.105;
merged .120]
Self-efcacy
Optimism
Model 8 2 factors as indicators 1006.743 169 5.957 591.066 3 0.695 0.126 0.778 0.807 0.808 0.783 1088.743 1 and 8
of PsyCap
Optimism, hope, and [.119;
resilience merged .134]
Self-efcacy
Model 9 2 factors as indicators 1271.344 169 7.523 855.667 3 0.62 0.145 0.719 0.746 0.747 0.714 1353.344 1 and 9
of PsyCap
Self-efcacy, hope, and [.137;
resilience merged .152]
Optimism
Model 10 2 factors as indicators 1222.478 169 7.234 806.801 3 0.635 0.142 0.73 0.757 0.758 0.727 1304.478 1 and
of PsyCap 10
Self-efcacy, optimism, [.134;
and resilience merged .149]
Hope
Model 11 2 factors as indicators 1116.479 169 6.606 700.793 3 0.666 0.134 0.753 0.781 0.783 0.754 1198.479 1 and
of PsyCap 11
Self-efcacy, optimism, [.127;
and hope merged .142]
Resilience
Model 12 1 factor as an indicator 1479.307 170 8.702 1063.63 4 0.592 0.157 0.673 0.698 0.699 0.663 1559.307 1 and
of PsyCap 12
All 20 indicators [.150,
.165]

Notes: One item each from the measures of self-efcacy (I feel condent presenting information to a group of colleagues), optimism (When things are uncertain for
me at work I usually expect the best), hope (Right now I see myself as being pretty successful at work), and resilience (I usually manage difculties one way or
another at work) was deleted due to correlation measurement errors in all models. All 2 difference scores among PsyCap factor structure models were signicant at
p < .001. PsyCap = psychological capital; GFI = goodness of t index; RMSEA = root mean square error of approximation; NFI = normed t index; CFI = comparative t index;
IFI = incremental t index; TLI = Tucker-Lewis index; AIC = Akaike information criterion; and CI = condence interval.
 S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926 19

Table 4
Results of reliability and convergent validity tests: full measurement model.

Variable and items Standardized t-Value Alpha CR AVE

loading

PsyCap: self-efcacy 0.903 0.898 0.637

SE1. I feel condent analyzing a long-term problem to nd a solution 0.863 18.681
SE2. I feel condent in presenting my work area in meetings with management 0.841
SE3. I feel condent contributing to discussions about my hotels strategy 0.778 15.973
SE4. I feel condent helping to set targets/goals in my work area 0.781 16.081
SE5. I feel condent contacting people outside my hotel (e.g., customers) to discuss problems 0.78 16.058

PsyCap: optimism 0.885 0.864 0.562

OP2. If something can go wrong for me work-wise, it will R 0.723 14.01
OP3. I always look on the bright side of things regarding my job 0.69 13.179
OP4. Im optimistic about what will happen to me in the future as it pertains to work 0.847 17.382
OP5. In my job, things never work out the way I want them to R 0.831 16.927
OP6. I approach my job as if every cloud has a silver lining 0.819

PsyCap: hope 0.891 0.865 0.561

HO1. If I nd myself in a jam at work, I can think of many ways to get out of it 0.797 16.102
HO2. At the present time, I am energetically pursuing my goals 0.828
HO3. There are lots of ways around any problem that I am facing now 0.739 14.503
HO5. I can think of many ways to reach my current goals 0.788 15.854
HO6. At this time, I am meeting the work goals I have set for myself 0.786 15.781

PsyCap: resilience 0.909 0.905 0.655

RE1. When I have a setback at work, I have trouble recovering from it and moving on R 0.751 15.883
RE3. I can be on my own, so to speak, at work if I have to 0.849 19.476
RE4. I usually take stressful things at work in my stride 0.828 18.631
RE5. I can get through difcult times at work because Ive experienced difculties before 0.867
RE6. I feel I can handle many things at a time at my job 0.808 17.895

Work engagement 0.909 0.909 0.556

WE1. At my work, I feel like I am bursting with energy 0.797 15.045
WE3. When I get up in the morning, I feel like going to work 0.765 14.31
WE4. I am enthusiastic about my job 0.753 14.042
WE5. My job inspires me 0.765 14.309
WE6. I am proud of the work I do 0.74 13.761
WE7. I feel happy when I am working intensely 0.773
WE8. I am immersed in my work 0.698 12.844
WE9. I get carried away when I am working 0.707 13.037

Job satisfaction 0.874 0.866 0.568

JS1. My overall job 0.789 15.581
JS2. My fellow workers 0.831 16.722
JS3. My supervisor 0.814 16.236
JS4. This hotels policies 0.817
JS5. The support provided by this hotel 0.579 10.566

Affective organizational commitment 0.875 0.86 0.554

AOC1. I would be very happy to spend the rest of my career with this hotel 0.624 11.775
AOC3. I really feel as if this hotels problems are my own 0.769 15.551
AOC4. I do not feel like part of the family at my hotel R 0.811 16.812
AOC5. I do not feel emotionally attached to this hotel R 0.792 16.231
AOC6. This hotel has a great deal of personal meaning for me 0.84

Model t
Initial model (45 items): 2 = 2220.987, df = 882; Normed 2 = 2.518; GFI = .737; RMSEA [90% CI: LO; HI] = .070 [.066; .073]; NFI = .800; CFI = .868; IFI = .869; and TLI = .859.
Revised model (38 items): 2 = 1375.475, df = 644; Normed 2 = 2.136; GFI = .809; RMSEA [90% CI: LO; HI] = .060 [.056; .066]; NFI = .849; CFI = .913; IFI = .914; and TLI = .905.
Notes: PsyCap was manifested by self-efcacy, optimism, hope, and resilience. One item each from self-efcacy (SE6: I feel condent presenting information to a group of
colleagues), optimism (OP1: When things are uncertain for me at work I usually expect the best), hope (HO4: Right now I see myself as being pretty successful at work),
and resilience (RE2: I usually manage difculties one way or another at work) was discarded during the second-order factor structure validation. One item from the work
engagement measure (WE2: At my job, I feel strong and vigorous) and three items each form job satisfaction (JS6: My salary; JS7: The opportunities for advancement
with this hotel; and JS8: This hotels customers), and affective organizational commitment measures (AOC2: I enjoy discussing my hotel with people outside it; AOC7:
I do not feel a strong sense of belonging to my hotel R; and AOC8. I think that I could easily become as attached to another hotel as I am to this one R) were discarded
during the convergent validity test. All standardized factor loadings are signicant at p < .001. R denotes reverse-scored items. PsyCap = psychological capital; CR = composite
reliability; AVE = average variance extracted; GFI = goodness of t index; RMSEA = root mean square error of approximation; NFI = normed t index; CFI = comparative t
index; IFI = incremental t index; and TLI = TuckerLewis index.

the t indices, as hypothesized, the 7-factor measurement model
t the data better than the six competing measurement mod-
els (Akaike, 1987; Hair et al., 2010; Rust et al., 1995), with t
indices demonstrating good discriminant validity of the study vari-
ables. For instance, the hypothesized 7-factor measurement model
(2 = 1375.475, df = 644; Normed 2 = 2.136; GFI = .809; RMSEA
[90% CI: LO; HI] = .060 [.056; .066]; NFI = .849; CFI = .913; IFI = .914;
TLI = .905, and AIC = 1569.475) showed that further signicant
improvement in t (2 [6] = 284.086, p < .001), compared to the
6-factor measurement model (i.e., the best t model among the
competing models); Model 2: job satisfaction and affective orga-
nizational commitment merged; self-efcacy; optimism; hope;
resilience; and work engagement (2 = 1659.561, df = 650; Normed
2 = 2.553; GFI = .764; RMSEA [90% CI: LO; HI] = .071 [.066; .075];
NFI = .818; CFI = .880; IFI = .881; TLI = .870; and AIC = 1841.561). All
competing full measurement models had poor t. The results from
these full measurement model comparisons therefore strongly sup-
ported the hypothesized 7-factor full measurement model.
In the current study, discriminant validity was assessed by four
criteria (Anderson and Gerbing, 1988; Fornell and Larcker 1981;
20 S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926

Table 5
Result of CFA model comparisons: full measurement model.

Models Factors 2 df Normed 2 df GFI RMSEA NFI CFI IFI TLI AIC Model
2 [90% CI: comparison
LO; HI]

Model 1 7 variables served as 1375.475 644 2.136 0.809 0.06 0.849 0.913 0.914 0.905 1569.475
(Hypothesized) factors
Self-efcacy [.056;
.066]
Optimism
Hope
Resilience
Work engagement
Job satisfaction
Affective
organizational
commitment

Model 2 6 variables served as 1659.561 650 2.553 284.086 6 0.764 0.071 0.818 0.88 0.881 0.87 1841.561 1 and 2
factors
Job satisfaction and [.066;
affective organizational .075]
commitment merged
Self-efcacy
Optimism
Hope
Resilience
Work engagement

Model 3 5 variables served as 1826.561 655 2.789 451.086 11 0.749 0.076 0.8 0.861 0.862 0.851 1998.561 1 and 3
factors
Work engagement, job [.072;
satisfaction, and .080]
affective organizational
commitment merged
Self-efcacy
Optimism
Hope
Resilience

Model 4 4 variables served as 2222.067 659 3.372 846.592 15 0.698 0.087 0.756 0.814 0.815 0.802 2386.067 1 and 4
factors
Resilience, work [.083;
engagement, job .091]
satisfaction, and
affective organizational
commitment merged
Self-efcacy
Optimism
Hope

Model 5 3 variables served as 2532.089 662 3.825 1156.614 18 0.663 0.095 0.723 0.778 0.779 0.764 2690.089 1 and 5
factors
Hope, resilience, work [.091;
engagement, job .099]
satisfaction, and
affective organizational
commitment merged
Self-efcacy
Optimism

Model 6 2 variables served as 2788.205 664 4.199 1412.73 20 0.633 0.101 0.694 0.748 0.749 0.733 2942.205 1 and 6
factors
Optimism, hope, [.098;
resilience, work .105]
engagement, job
satisfaction, and
affective organizational
commitment merged
Self-efcacy

Model 7 1 variable served as a 3298.247 665 4.96 1922.772 21 0.579 0.113 0.639 0.687 0.689 0.669 3450.247 1 and 7
factor
All seven study [.109;
variables merged .117]

Notes: All 2 difference scores among CFA models are signicant at p < .001. GFI = goodness of t index; RMSEA = root mean square error of approximation; NFI = normed t
index; CFI = comparative t index; IFI = incremental t index; TLI = TuckerLewis index; AIC = Akaike information criterion; and CI = condence interval.
 S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926 21

Table 6
Mean, standard deviation, and the results of nomological and discriminant validity tests.

Variables M SD 1 2 3 4 5 6 7

1. PsyCap: self-efcacy 5.167 .880 [.637] (42.861) (23.396) (37.701) (47.500) (41.350) (40.632)
.294 .347 .261 .278 .237 .275
2. PsyCap: optimism 4.924 .850 .542 [.562] (20.970) (19.454) (32.371) (38.605) (27.429)
[.658, .426] .416 .457 .426 .285 .371
3. PsyCap: hope 4.956 .947 .589 .645 [.561] (19.833) (22.237) (20.844) (16.559)
[.725, .453] [.785, .505] .340 .399 .349 .379
4. PsyCap: resilience 5.131 .894 .511 .676 .583 [.655] (23.730) (25.187) (21.177)
[.635, .387] [.812, .540] [.727, .439] .441 .356 .372
5. Work engagement 4.091 .794 .527 .653 .632 .664 [.556] (24.443) (21.583)
[.639, .415] [.775, .531] [.768, .496] [.796, .532] .482 .500
6. Job satisfaction 5.085 .863 .487 .534 .591 .597 .694 [.568] (25.193)
[.605, .369] [.654, .414] [.731, .451] [.731, .463] [.824, .564] .399
7. Affective 5.074 .882 .524 .609 .616 .610 .707 .632 [.554]
organizational [.644, .404] [.737, .481] [.762, .470] [.748, .472] [.841, .573] [.764, .500]
commitment

Notes: Composite scores for each measure were obtained by averaging scores across remaining items after reliability and convergent validity tests representing that measure.
PsyCap was manifested by self-efcacy, optimism, hope, and resilience. Correlations among all study variables are presented in the lower off diagonal; condence interval
of plus or minus two standard errors around the correlation among study variables are presented in parentheses in the lower off diagonal; calculated values of the shared
variance (i.e., squared correlations) among study variables are presented in the upper off diagonal; the 2 difference scores among study variables are presented in parentheses
in the upper off diagonal; and AVE values (boldface type) are presented in parentheses along the diagonal. All correlations among study variables are signicant at p < . 01.
All 2 difference scores among study variables (all tests = 1df): 2 > 10.830, p < .001. PsyCap = psychological capital; and AVE = average variance extracted.

Hair et al., 2010; Kline, 2010): pairwise correlation, correlation con-
dence interval, 2 difference, and AVE tests (Table 6). First, to
evaluate the distinctiveness of the variables measured by differ-
ent sets of items, pairwise correlations between latent variables
were checked. The highest pairwise correlation value was .707
(between work engagement and affective organizational commit-
ment), which does not exceed the maximum threshold of .850
suggested by Kline (2010), indicating that the different variables
were measured by different sets of items.
Second, we calculated the condence interval of plus or minus
two standard errors around the correlation between the variables
and determined whether this interval includes 1.0. If it does not
include 1.0, discriminant validity is demonstrated (Anderson and
Gerbing, 1988). As can be seen in Table 6, none of the 21 con-
dence intervals (e.g., between self-efcacy and optimism: .658;
.426) include 1.0 in this study.
Third, the measurement model was constrained by forcing a
correlation of 1.0 between a pair of two variables, the constrained
model was then estimated, and the results were compared to the
free model using a 2 difference test. Twenty-one such correlations
and estimates were executed. In all cases, the resulting 2 value
of the constrained model was greater than that of the free model,
and the 2 value was signicant at p < .001 (the lowest 2 differ-
ence score was achieved between hope and affective organizational
commitment; the constrained model: 2 = 123.087, df = 35; the
free model: 2 = 106.528, df = 34; 2 (1) = 16.559, p < .001), which
indicates evidence of the discriminant validity for study variables
(Anderson and Gerbing, 1988).
Lastly, we compared the AVEs for the two variables of interest
with the square of the correlation between them. This approach
is a more rigorous test than the above three approaches (Hair
et al., 2010). Discriminant validity is demonstrated if the AVEs are
greater than the corresponding squared correlation (Fornell and
Larcker 1981; Hair et al., 2010). All squared correlations among the
variables were smaller than the AVEs of the respective variables
(e.g., between self-efcacy and optimism: r2 = .294; AVE of self-
efcacy = .637, AVE of optimism = .562). As can be seen in Table 6,
the results using the four criteria therefore indicate strong evidence
of the discriminant validity of the study variables in this study
(Anderson and Gerbing, 1988; Fornell and Larcker 1981; Hair et al.,
2010; Kline, 2010).
The correlation estimates calculated from the validation sam-
ple are shown in Table 6. Because PsyCap variable is a second-order
construct, nomological validity would be established if the scores of
the measures of the four rst-order factors (i.e., self-efcacy, opti-
mism, hope, and resilience) of PsyCap positively and signicantly
correlated with work engagement, job satisfaction, and affective
organizational commitment, as hypothesized in Hypotheses 13. In
addition, nomological validity would be established if the scores of
the measures of work engagement positively and signicantly cor-
related job satisfaction and affective organizational commitment,
as hypothesized in Hypotheses 4 and 5. All correlations between
the four rst-order factors of PsyCap and work engagement
(e.g., self-efcacy and work engagement: r = .527)/job satisfaction
(e.g., self-efcacy and job satisfaction: r = .487)/affective organiza-
tional commitment (e.g., self-efcacy and affective organizational
commitment: r = .524), and between work engagement and job
satisfaction (r = .694)/affective organizational commitment were
signicant (r = .707) at p < .01, which indicates strong evidence of
the nomological validity of the study variables (Hair et al., 2010;
Netemeyer et al., 1991).
4.1.3. Common method bias checking
After the full measurement model validation, we performed an
EFA with unrotation solution on all the remaining 38 items to check
the possibility of common method problems. The CMB is present
when a single factor is yielded from the factor analysis or one gen-
eral factor accounts for more than 50% of the covariance among the
variables (Mattila and Enz, 2002; Podsakoff and Organ, 1986). The
results of factor analysis revealed a 7-factor structure (with eigen-
values greater than 1.0), with each factor accounting for less than
50% of the covariance among the variables. In addition, we applied
a CFA to compare a model with a single latent factor to our 7-factor
model. The basic assumption of this method is that if a substantial
amount of CMB is present, a single latent factor will t the data
well (Mossholder et al., 1998; Podsakoff et al., 2003). The 1-factor
model, in which all the remaining 38 items after the full measure-
ment model validation load on a single factor, has a relatively very
poor t to the data with 2 = 3298.247, df = 665; Normed 2 = 4.960;
GFI = .579; RMSEA [90% CI: LO; HI] = .113 [.109; .117]; NFI = .639;
CFI = .687; IFI = .689; and TLI = .669. A 2 difference test furthermore
indicated that the 7-factor model was superior to the single-factor
model, 2 (21) = 1922.772, p < .001. The results allow us to con-
clude that the common method problem is unlikely to be pervasive
in the current study (Podsakoff and Organ, 1986; Podsakoff et al.,
2003).
22 S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926

R2 = .631
Hypothesis 2:
(.398, 3.701)***
Job Satisfaction
Hypothesis 6: Partial mediating role of work engagement
Indirect effect: PsyCap work engagement job satisfaction Time 2
Self-efficacy Point estimate: .363**; bias-corrected bootstrap 90% CI: .194 (LL); .536 (UL)
The Aroian version of the Sobel test: Z = 3.823***
(.678, 12.346)***
R2= .715 Hypothesis 4:
Hypothesis 1:
Optimism (.845, 12.474)*** (.429, 4.026)***
[.459, .114]
(.813, 15.371)*** PsyCap [.941, .075] Work Engagement
(.789)*** Time 1
Time 1
Hypothesis 5:
Hope (.336, 3.306)***
[.347, .105]
(.794, 14.936)***
R2 = .701
Hypothesis 7: Partial mediating role of work engagement
Indirect effect: PsyCap work engagement affective organizational commitment
Resilience
Point estimate: .284*; bias-corrected bootstrap 90% CI: .077 (LL); .489 (UL) Affective Organizational
The Aroian version of the Sobel test: Z = 3.186*** Commitment

Time 2
Hypothesis 3:
(.534, 5.017)***
Model fit
2 = 438.134, df = 203; Normed 2 = 2.158; GFI = .890; RMSEA [90% CI: LO; HI] = .061 [.053; .069]; NFI = .905; CFI = .947; IFI = .947; and TLI = .939.

Fig. 3. Results of structural model estimation and hypotheses test for the effect of PsyCap on employee morale with the mediator of work engagement.

4.2. Structural model estimation and hypotheses testing
As the full measurement model was deemed to be valid and
acceptable as well as same source problem is unlikely to be a per-
vasive problem in the current study, the structural model was
estimated and the hypotheses were tested in the second step
(Fig. 3). The t indices from the SEM demonstrated that the t of the
proposed structural model was satisfactory (2 = 438.134, df = 203;
Normed 2 = 2.158; GFI = .890; RMSEA [90% CI: LO; HI] = .061 [.053;
.069]; NFI = .905; CFI = .947; IFI = .947; and TLI = .939).
4.2.1. Main effects and hypotheses testing
As can be seen in Fig. 3, a signicant and positive relation-
ship between PsyCap and work engagement was found ( = 0.845,
p < .001), supporting Hypothesis 1. PsyCap explained 71.5% of the
variance in work engagement. Consistent with Hypotheses 3 and
4, PsyCap ( = 0.398, p < .001) and work engagement ( = 0.429,
p < .001) both had a signicant and positive impact on job satis-
faction, jointly explaining 63.1% of the variance in this measure.
Finally, the results also provided empirical support for Hypotheses
3 and 5, because PsyCap ( = 0.534, p < .001) and work engagement
( = .336, p < .001) both had a signicant and positive impact on
affective organizational commitment, jointly explaining 70.1% of
the variance in this measure.
4.2.2. Mediating effects and hypotheses testing
As shown in Fig. 3, to investigate the mediating role of work
engagement, we utilized both the bias-corrected bootstrapping
method (Preacher and Hayes, 2004) and the Aroian version of
the Sobel test (Baron and Kenny, 1986). When using the boot-
strapped CI (lower limit of the CI [LL]; upper limit of the CI [UL])
procedure, mediation is indicated by the exclusion of zero from
the CI for the indirect effect. If the bootstrapped CI does not
include zero, it can be said with condence that the mediating
effect differs from zero. In the current study, 90% bias-corrected
CI was estimated using 5000 bootstrapped samples. The indi-
rect effects of PsyCap work engagement job satisfaction (point
estimate of indirect effect = .363, p < .01; CI [LL: .194; UL: .536])
and PsyCap work engagement affective organizational com-
mitment (point estimate of indirect effect = .284, p < .05; CI [LL:
.077; UL:.489]) were signicant and the 90% CI did not include zero.
Following the recommendation of Baron and Kenny (1986), we
also used the Aroian version of the Sobel test for the effect of Psy-
Cap on job satisfaction via work engagement (Z = 3.823, p < .001),
which showed that work engagement had a signicant mediating
effect on this relationship. Furthermore, the Z-score for the effect of
PsyCap on affective organizational commitment via work engage-
ment was also signicant (Z = 3.186, p < .001), indicating that work
engagement also had a mediating effect on this linkage.
To summarize, both the Aroian version of the Sobel test and the
bias-corrected bootstrapping method indicated that work engage-
ment signicantly mediates the effects of PsyCap on job satisfaction
and affective organizational commitment. Specically, because the
direct effects of PsyCap on both job satisfaction (Hypothesis 2) and
affective organizational commitment (Hypothesis 3) were positive
and signicant, these results demonstrated that work engagement
partially mediates the relationships between PsyCap and both job
satisfaction and affective organizational commitment. Therefore,
Hypotheses 6 and 7 were also supported.
5. Discussion and implications
5.1. Discussion
This study has investigated work engagement as a partial medi-
ator of the effect of PsyCap on two employee morale variablesjob
satisfaction and affective organizational commitmentin the con-
text of the hospitality industry. We set out to examine the structural
role of work engagement in the linkage between PsyCap and these
variables of employee morale. As hypothesized, work engage-
ment was shown to be a positive consequence of PsyCap and the
antecedent of the two variables of employee morale. At the same
time, since PsyCap has a direct impact on these variables, work
engagement also acted as a partial mediator of these relationships.
The role of work engagement in this linkage can be explained with
reference to COR theory (Hobfoll, 1989, 2001) and the JD-R model
 S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926
(Bakker and Demerouti, 2007, 2008; Bakker and Leiter, 2010). Based
on these theories, it can be argued that service employees who
demonstrate a high level of PsyCap will tend to show higher work
engagement as a consequence. Previously, the role of PsyCap as a
strong predictor of the work engagement level of an employee (i.e.,
one part of the structure of this study) had only been proposed
conceptually (Sweetman and Luthans, 2010). This has now been
empirically demonstrated.
In addition, this study illustrates the effect of PsyCap not only
on work engagement but also on the two employee morale vari-
ables. PsyCap acted as a predictor of the variables, with a stronger
direct effect on affective organizational commitment than job sat-
isfaction. However, PsyCap had a stronger indirect effect on job
satisfaction through work engagement than on affective organiza-
tional commitment. Therefore, the result of combining the direct
and indirect effects of PsyCap on the two employee morale vari-
ables indicate that PsyCap had a similarly positive effect on both,
given the partial mediation role of work engagement. These results
imply that affective organizational commitment relies more on
work engagement than job satisfaction, which has not been con-
sidered before. Therefore, this study offers new and interesting
ndings about the structural role of work engagement as it relates
to PsyCap and the two employee morale constructs.
Moreover, the results of this study demonstrate that PsyCap has
a very strong effect on work engagement ( = 0.845). However, the
effect of work engagement on the two employee morale variables
was smaller ( = 0.398 for job satisfaction and = 0.534 for affec-
tive organizational commitment). It might therefore be presumed
that work engagement is more closely related to PsyCap than the
employee morale variables. Sweetman and Luthans (2010) theorize
that the positive emotions created by the link between PsyCap and
work engagement are the foundation of their strong relationship.
This result is especially meaningful from the perspective of organi-
zational psychology, as well as in the service industry context, with
Sweetman and Luthans (2010) having identied PsyCap and work
engagement as psychological factors. However, employee morale
is rarely considered as a psychological factor. Although previous
work suggests that work engagement is promoted by various types
of resources which increase job outcome variables (e.g., Karatepe
et al., 2013; Kim et al., 2009), somewhat surprisingly, such work has
not considered the fact that work engagement, as one of the psy-
chological components in a work setting, would be more strongly
affected by other psychological factors, such as PsyCap, as shown
here.
5.2. Strengths and theoretical contributions
By taking these two critical emerging constructs, PsyCap and
work engagement, and linking them in a new way to employee
morale as denoted by job satisfaction and affective organizational
commitment, this study makes a number of signicant theoretical
contributions. First, the structural relationships between PsyCap,
work engagement, and employee morale as reported here not only
conrm the role of work engagement in PsyCap and employee
morale (which has not been shown before) but also identify the
pivotal role of work engagement as a mediator between PsyCap
and employee morale. This is signicant, because although PsyCap
or work engagement have been highlighted by a wide-ranging body
of organizational psychology research, critical questions remain
about how these important constructs should be linked with each
other and with other variables. Most research has tended to focus
on the effect of either PsyCap or work engagement on other con-
structs. Such studies have contributed to our understanding of
PsyCap (e.g., Avey et al., 2009; Luthans and Youssef, 2007; Nelson
and Cooper, 2007) or work engagement (e.g., Bakker and Leiter,
2010), and on dening the antecedents and/or consequences of
23
one of the two key constructs (e.g., Xanthopoulou et al., 2009;
Yalabik et al., 2013). However, only a few studies have explored
or conceptually proposed a relationship between PsyCap and work
engagement (e.g., Sweetman and Luthans, 2010). This study there-
fore breaks new ground by proposing a structural model and
giving meaningful consideration to a holistic view of the linkages
between PsyCap, work engagement, and other constructs, with a
particular focus on the aspects of organizational psychology and
behavior/attitude.
Second, this study proposes that work engagement is a par-
tial mediator of the relationship between PsyCap and the two
employee morale variables. Since work engagement has a vari-
ety of antecedents and consequent variables, it acts as a critical
mediator, and a number of studies have found that it has a full
effect (e.g., Karatepe et al., 2013; Karatepe, 2013a,b). However, by
proposing work engagement as a partial mediator, this study has
mapped out a research framework which suggests there are recip-
rocal and simultaneous relationships between a predictor (PsyCap),
work engagement, and consequent variables (the two employee
morale variables of job satisfaction and affective organizational
commitment). This is critical from an organizational psychology
perspective, because the partial mediating role of work engage-
ment shows the importance of a direct relationship between a
predictor of work engagement and the outcome variables, rather
than presenting it in a fully mediating role. This implies that the
relationships between the predictor, mediator, and outcome con-
structs in organizational psychology research could include more
complicated reciprocal or simultaneous mechanisms which cannot
be explained supercially. Since only a few studies have argued for
this conceptually, with most proposing only simple structures, the
empirical testing of the structural model presented here offers a
meaningful research direction for future work.
As mentioned in the discussion above, the effects of PsyCap on
the employee morale variables were much stronger than those
of work engagement. This provides a very important insight into
the role of PsyCap and work engagement as essential antecedents
of employee morale. Although work engagement has been high-
lighted before as a vital component of boosting employee morale
(e.g., Yeh, 2013), PsyCap has a more fundamental function as a
cause and antecedent of employee morale. Although both PsyCap
and work engagement are critical, as argued previously, our results
suggest that PsyCap has a stronger effect on employee morale,
implying that the individual capital (or personal resources) of an
employee has a more signicant role. Many studies have already
highlighted the importance of job resources, but these ndings
emphasize the fundamental signicance of personal rather than
generic work-related resources. Moreover, they also provide an alter-
native explanation for the strong effectiveness of the clustering
between PsyCap and work engagement, which might synergisti-
cally boost employee morale to a higher level.
Finally, this study has not only conrmed the critical roles of Psy-
Cap and work engagement in the service industry, but has added
employee morale as an important purposive construct. Generic out-
come variables related to job performance, which have been and
remain central to the purposes of many companies, have been stud-
ied extensively. However, by using the employee morale variables,
this study emphasizes a positive view of organizational behav-
iors/attitudes, which has been a recent focus of research and better
reects the needs of modern companies.
5.3. Practical implications
The ndings of this study also have practical implications for
hotel managers seeking to plan and introduce effective tools to help
employees develop positive organizational attitudes and behav-
iors by deploying their psychological resources; in other words, to
24 S. Paek et al. / International Journal of Hospitality Management 50 (2015) 926
improve hotel employees job satisfaction and affective organiza-
tional commitment. First, it is imperative that service organizations
should recognize the prime importance of PsyCap and develop
training programs to help service workers develop and maintain it
at high levels (i.e., by sustaining their self-efcacy, hope, optimism,
and resilience), including ways of protecting themselves from the
loss of such capital. Staff can protect, increase, or maintain their
PsyCap more effectively by learning how to enhance their self-
efcacy, hope, optimism, and resilience. As discussed by Avey et al.
(2009), short training interventions can enhance all these dimen-
sions, as well as PsyCap overall. Moreover, more comprehensive
development programs ranging from PsyCap and work engage-
ment to employee morale would be even more effective. Through
such programs, service workers can learn how to forecast obstacles;
prevent the loss and maintain good levels of PsyCap; experience
a high level of engagement with their job and workplace; feel a
sense of job satisfaction; and enjoy and feel emotionally attached
and more committed to their organization. Such experience and
recognition will lead them to set higher performance goals. More-
over, such development programs can be considered at a group
or organization level, since social capital such as supervisor sup-
port adds value and increases positive organizational behaviors
(Larson and Luthans, 2006). In addition, according to these ndings,
empowerment and rewards could be made available to enhance the
link between work engagement and employee morale. Empower-
ment and rewards are recognized as the most crucial indicators of
high-performance work practices and are strong inuencers to pro-
mote work engagement (Karatepe, 2013a). As such, overall human
resource management practices can help to create a better working
environment, which leads to improved job performance.
Second, management should consider the benecial impact
of PsyCap on employees positive organizational behaviors and
attitudes in the recruitment process. As shown here, an individ-
uals personal resources, such as psychological factors, are very
important to their level of satisfaction and performance. Service
organizations could gain an advantage by using a more thorough
selection process which aims to hire employees with high lev-
els of PsyCap (through means such as developing and using an
instrument which assess applicants PsyCap levels). Moreover, an
emphasis on PsyCap during the recruiting process would deliver
the very important message to potential employees that high Psy-
Cap is a critical characteristic for service workers, encouraging them
to make a continuous effort to maintain and increase their PsyCap
once they start work.
5.4. Limitations and future studies
Although this empirical study makes several important con-
tributions to the existing knowledge base, it does have certain
limitations which suggest viable prospects for future research. First,
a one-month time-lagged research design was used to collect the
data. Although such an approach can provide some evidence for
temporal causality, it is not enough to make rm causal inferences.
In order to be able to do so, future studies should collect data over a
longer period than was possible here (cf., Grandey and Cropanzano,
1999).
Second, replication studies using larger samples in different hos-
pitality settings in Korea and other countries are needed to obtain
ndings that can be generalized more widely and cross-validated.
Third, the results of this study suggest that work engagement
acts as a predictor of employee morale as represented by job
satisfaction and affective organizational commitment. Jobs in the
hospitality sector require employees with the creativity to generate
new ideas about work processes, methods, services, and products
(Hon, 2011). Individual innovative behaviors are thus important for
maintaining the competitive advantage and long-term success of
hospitality rms. Therefore, an investigation of PsyCap as a booster
of service innovation or creativity (cf., Jafri, 2012; Rego et al., 2012)
in hospitality employees may yield important insights for both aca-
demics and practitioners.
Fourth, this study has considered two variables of employee
morale as consequences of work engagement and job outcomes.
Although the ndings have conrmed the role of work engagement
as a precedent of the employee morale variables, other studies view
job satisfaction and affective organizational commitment as vari-
ables denoting employee attitudes and suggest instead that they are
outcome variables of work engagement (Yalabik et al., 2013). Other
work proposes a mutual relationship among the resources dimen-
sions and work engagement (Xanthopoulou et al., 2009), implying
that the relationships among these constructs are complicated.
Future empirical studies could investigate such a sub-mechanism,
not incorporated in the structural model of this study, in order to
examine other structural relationships among these constructs.
Fifth, this study has focused on the role of PsyCap as a predic-
tor of employee morale, without using a moderator. However, a
few studies have examined the moderating role of PsyCap on the
relationship between leader-member exchange and follower job
performance (e.g., Wang et al., 2012) and between perceptions of
organizational politics, turnover intention, job satisfaction, and job
performance (e.g., Abbas et al., 2014). Service recovery is a cru-
cial aspect of job-related performance in the hospitality context.
On the basis of this line of research, it would be useful to incor-
porate PsyCap into the extended model proposed as a form of
personal resource, in order to understand whether it can moderate
the impact of employee morale on service recovery performance.
Finally, another avenue for consideration may be business-
unit level relationships rather than those between individuals.
Harter et al. (2002) investigate the business-unit level relationship
between employee satisfaction, employee engagement, and busi-
ness outcomes. Collective measurement at this level would provide
interesting insights into how to manage the constructs considered
in this study more comprehensively across an organization.
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